Nursing Home Upgrade Model

Client: Nursing home corporation seeking to build new facility

A nursing home corporation was looking to re-develop their facility, through combined funding  from municipal and government sources. They hired BDO to build a financial model to aid the company evaluate the most optimal approach of funding the construction project: receiving a lump sum from the government, or a per-diem per bed.

3 Key Insights:

We built a best-in-class model combining operating and capital forecasts, which takes into account the detailed costs of the day-to-day operation, as well as construction costs

 

The model builds the current operation of the facility in parallel with the construction project and assumes that once proper occupancy of the New Facility is in place, the Old Facility will start generating a rental revenue

 

The evaluation of the two funding scenarios lead to a fruitful discussion with government and municipality representatives and resulted in finding optimal solutions for the re-development project

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