As the senior housing industry becomes more competitive, access to capital more challenging and experienced staff recruitment more difficult, providers are joining forces to share their resources and strengthen their senior housing product lines.

While two or more senior housing companies sometimes merge, the most typical partnership seen today is a joint venture specific to a senior housing project. The project is usually set up as a limited liability corporation or other suitable corporate structure with an experienced operator. Each partner owns a percentage of the joint venture and will agree on how profits and losses will be distributed. The partner with the majority ownership de facto will exert the greater control over the development and operations of the project.

This is often an affiliation between a health system or hospital and a senior housing company. Frequently, the hospital or health system provides land and some capital as its portion of equity, while the senior housing company provides the remaining capital, as well as the development and management expertise.

But joint ventures don't necessarily include exchange of capital or facility ownership. For example, a hospital may agree to provide its partner's residents with access to health care services. In return, the senior housing company's project would be marketed by the hospital as an affiliated facility, so that the senior housing project is seen by the hospital's patients as a preferred option.

PUBLIC RELATIONS

If the health system is not-for-profit and the company is proprietary, marketing and public relations are especially important to the venture's success.

Understanding consumer perception, regardless of whether it is based on fact, is important when planning communication strategies and developing sound marketing plans for joint ventures. Traditionally, consumers perceive not-for-profit organizations positively. They expect that these entities, many of which are faith-based, have an inherent interest in serving the public good without self-gain. Conversely, consumers may believe that for-profit entities are focused primarily on meeting financial goals.

An initial step, then, is to determine how to use brand awareness for marketing and public relations. The partner with the most positive public imagenot necessarily the largest entityshould be the lead partner in joint marketing efforts. Conduct focus groups and market surveys to test brand awareness before deciding on which partner's name to highlight. Alternatively, the partners may develop a new name that reflects the name of the most recognizable partner. Avoid the pitfall of assuming that the largest entity has the highest brand awareness.

To announce the joint venture or merger, you should have specific communication strategies for your key audiences, including: employees, board members, donors, current clients and families, prospective clients and families, referral sources and vendors. Consider what each audience needs to hear and how to best present the information. Explain how the project will positively affect the audience, clearly define the products and services you will deliver, and give the audience an idea of when the project will be completed.

While you may assume that two organizations serving essentially the same population in the same markets would be an easy fit, in many cases, that couldn't be further from reality. Differences in management styles, service delivery systems and care philosophies can make for culture clashes. To minimize problems, assign top-level leaders to manage the transition, anticipate concerns and proactively communicate the organization's position without a defensive posture.

Joint ventures in senior housing are likely to continue to increase, especially between health systems and senior housing providers. The work of creating a successful partnership really begins after the two parties have signed the legal documents. Starting on the right foot with marketing and public relations is an important first step in assuring that the partnership flourishes. *

Moraine Byrne is senior vice president of marketing, Health Dimensions Group. Dr. Kathleen M. Griffin is national director, post-acute and senior services for Health Dimensions Group, and president/CEO of Valley Consultants Inc., Scottsdale, Ariz. She also serves on ADVANCE's editorial board.