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What difference does being not-for-profit make?

What difference does being not-for-profit make?

By Lisa Diehl

When shopping for a senior living community, it is common to consider the size and layout of the residence, the taste of the food, the friendliness of the staff, variety of amenities and the financial requirements.

You may be looking at whether the community offers continuing care should your needs change in the future. Do they offer memory care, short-term rehabilitation, assisted living or health care? Proximity to children and grandchildren also may be a factor.

What too many times gets overlooked is the operational structure of the organization. Is it a stand-alone community or part of a system? Is it a for-profit or a not-for-profit?

At first glance, it may be difficult to see differences. Both not-for-profit and for-profit communities can provide enriching programs, medical care, a variety of services and lovely residences and campuses. Both types of communities have their own pros and cons.

Whether a community is associated with a for-profit business model or a not-for-profit one can make a significant difference in the overall operational culture of that organization. Six major differences are worth exploring to contrast better.

1. Mission

The heart of the not-for-profit, charitable and tax-exempt senior living community is its mission. The not-for-profit mission often focuses on providing a high quality of life for seniors and treating residents with dignity, respect and compassion. While for-profit communities also may treat residents respectfully and provide them with a favorable quality of life, economic pressures often result in different organizational values that place a lower priority on care and more on making a profit for shareholders.

The mission is evident in every aspect of the senior living community, from how the employees are inspired and driven by the mission to provide person-centered care to residents to the benevolent care fund that provides residents security should they run out of financial resources through no fault of their own.

At PMMA, our mission is to provide quality senior services guided by Christian values. As an organization, we make decisions by wearing two lenses, one is quality and the other is Christian values informed by our roots in the Presbyterian Church. All decisions must measure up to those standards.

Our founding goes back to a meeting at the Presbyterian Church USA’s Synod of Kansas in June 1947, when the chairperson asked if anyone had input for the good of the order. One member replied, “There is a Mrs. Alice Kalb of El Dorado, Kansas, who wants us to build a home for the aged and take her in."

Through many meetings and discussions, the Synod members approved the purchase of property in Newton, Kansas, and the formation of the United Presbyterian Foundation of Kansas, Inc., now known as Presbyterian Manors, Inc. In 1949, our first community opened, providing a home for seven area seniors who could no longer live independently in their homes.

2. Continuous ownership

A popular avenue for for-profit organizations to gain revenue in senior living is through acquisition and resale. In fact, it is common to see ownership change every five years or so. This continuous cycle does not leave much room for building relationships between leadership and the greater community.

Not-for-profit senior living organizations are intentional in reaching out to the greater community to partner with churches, local schools, senior centers and community organizations.

At PMMA, we’re in it for the long haul, which gives us the freedom to really get to know our communities and our residents. We invest in the towns and cities in which our campuses are located.  People come to us because we are engaged in the communities in which we operate.  We strive to give every resident, in each one of our PMMA communities, the same individual attention, service and care upon which we were founded.

3. Stakeholders

Who is at the helm of an organization makes a difference. In for-profit senior living communities – as in any traditional for-profit business – the duty is to owners and shareholders. Like any traditional for profit business, owners and shareholders are invested in earning a profit.

Not-for-profit senior living communities do not have shareholders. A volunteer board of trustees holds the organization and its leadership accountable to the mission. Board members include a diverse array of individuals representing academia, religion, business and more. This group of highly qualified individuals serves in a volunteer capacity, which means they are making decisions with no ulterior motives, keeping residents the focus of decision-making.

At PMMA, we are proud of our history with the Presbyterian Church. But we also welcome people from all spiritual backgrounds. We firmly believe spiritual life is an integral part of the human experience, and we promote spiritual health regardless of your faith tradition.

Each location has a volunteer mission committee comprised of community leaders who provide insight and guidance for each PMMA community’s philanthropic efforts.

4. Net revenue is invested back into the community

Being not-for-profit doesn’t mean the organization never makes money. The real difference is in how that income is managed. In a not-for-profit, instead of paying profits out to shareholders, those funds are used to reinvest in the senior living community for the of benefit residents and improve quality of life. Not-for-profit finances are always open for public inspection.

PMMA re-invests profits into capital improvement projects to meet the ever-changing needs of residents at every level of living.

For PMMA communities, The Way You Want to Live is more than a tagline; it is a culture built on a method of delivering services and care to residents based on the residents’ personal choices and preferences. This social care model, sometimes called "person- or resident-centered care" creates a more welcoming and familiar environment for residents.

5. Charitable care

One of the greatest fears of American seniors is running out of money. In a not-for-profit community, there is often a benevolent care fund to assist residents whose financial situation deteriorates. Residents do not need to worry about being asked to leave should their financial resources run out through no fault of their own. In a for-profit community, an individual who runs out of money must find another place to live.

As a not-for-profit organization, PMMA stands in the financial gap for those residents who outlive their financial resources through no fault of their own. Each year, PMMA provides more than $5 million in charitable care to residents throughout the PMMA system through the Good Samaritan Program.  

The Good Samaritan Program makes it possible for our residents to continue living in the PMMA community of their choice, providing residents with a secure future.

6. Quality of care

Medical care is a complex topic, and the differences between for-profit and not-for-profit senior care providers is often misunderstood.

Research shows that not-for-profit senior living communities performed better on most quality measures and had lower hospitalization rates than for-profit communities. They also have on fewer problems noted by regulatory agencies and spend more money per day on nursing costs and food.

Not-for-profit communities more often rely on acuity-based staffing models, which tailor staffing to the intensity of care needed by residents rather than staffing for a total number of residents alone. Under acuity-based staffing, the number of nurses on a shift can change depending on current resident needs, which may range from a minimum level of care to a need for constant medical attention.

PMMA communities believe quality of care leads to quality of life. All of our communities strive to be 5-star rated by the Centers for Medicare and Medicaid Services (CMS).

The data used to determine ratings comes from annual health inspections, staffing data reported to CMS monthly and care quality measures.

The health inspection rating contains information from the last 3 years of onsite inspections, including both standard surveys and complaint surveys conducted by trained, objective inspectors who follow a process to determine the extent to which a health care center has met Medicaid and Medicare’s minimum quality requirements.

The staffing rating has information about the number of hours of care provided on average to each resident each day by nursing staff. Differences in care needs are considered in rating the community.

The quality measure rating has 17 different physical and clinical measures for health care residents. The quality measures offer information about how well communities are caring for residents’ physical and clinical needs.

What does all this mean?

While ownership and sponsorship may not be among the factors most people consider when evaluating senior living communities, they clearly are important. From the well-documented evidence that not-for-profit organizations have fewer deficiencies and lower hospitalization rates to the differences in mission, stakeholders and accountability, not-for-profit senior living communities offer significant advantages to residents, their loved ones, staff members and the community at large.

As you go through the process of choosing a senior living community, remember to ask these questions:

  • What is the mission of this organization?
  • How is it implemented each day?
  • Who owns this community and for how long?
  • Who is in charge? (Shareholders? Volunteer board?)
  • What happens to net revenues?
  • What would happen to me if I ran out of money?

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