Case Study: Koelsch Communities

Industry: Senior Living and Memory Care

Company Size: 40 Properties, Approximately 2,300 Employees, Estimated Annual Revenue of $325–$350 Million

Client Overview

Founded in 1958, Koelsch Communities is a family-owned and operated provider of senior living services, offering independent living, assisted living, and memory care. With over 60 years of experience, the company operates 40 properties across eight states, serving nearly 3,500 residents. Headquartered in Olympia, Washington, Koelsch Communities is led by President and CEO Aaron Koelsch, who continues the legacy of excellence established by his parents.

Learn more about Koelsch Communities

The Problem

Challenges Faced:

• Geographically Dispersed Facilities:
  Operating 40 properties across multiple states resulted in a complex network of varying vendors and service agreements.
• Limited Internal Resources:
  The extensive effort required to audit every line item of bills was beyond the capacity of the existing staff.
• Multiple Third-Party Vendors:
  Managing over 25 categories of spend with multiple vendors, each having variable rates, terms, and conditions, led to administrative challenges.
• Lack of Benchmark Analytics:
  Without access to competitive benchmark data, negotiating favorable contracts was difficult.
• Reluctance to Outsource:
  Previous experiences made the company hesitant to trust external partners with sensitive financial and operational data.

Impact on Business:

• Financial Strain: Inefficient vendor agreements and billing errors led to unnecessary expenses.
• Operational Inefficiencies: The complexity of managing numerous vendors diverted focus from core business activities.
• Resource Limitations: The lack of internal personnel to conduct thorough audits resulted in missed opportunities for cost savings.

The Discovery

Analysis and Insights:

• Comprehensive Audit:
  Limitless Vendor Management (LVM) conducted a detailed review of all vendor contracts, invoices, and billing statements across all properties.
• Usage Analysis:
  Evaluated service utilization to identify discrepancies between billed services and actual usage.
• Benchmarking:
  Compared existing vendor rates and terms against industry standards to pinpoint areas for improvement.

Key Findings:

• Inconsistent Contract Terms:
  Discovered significant variations in rates and conditions across similar services.
• Billing Discrepancies:
  Identified numerous billing errors and overcharges due to outdated or mismanaged contracts.
• Underutilized Services:
  Detected services being paid for but not utilized, leading to unnecessary costs.

The Solution

Actions Taken:

• Billing Optimization and Consulting:
  Conducted extensive billing audits to identify and eliminate errors and overcharges. Provided strategic consulting to optimize vendor contracts and spending categories.
• VMS Platinum Platform Implementation:
  Implemented the VMS Platinum platform to centralize and streamline vendor management. Utilized advanced analytics and automation to continuously monitor usage and billing accuracy.
• Vendor Consolidation and Negotiation:
  Streamlined the number of vendors by consolidating services where feasible. Renegotiated contracts to secure better rates and more favorable terms.
• Billing Corrections and Credits Recovery:
  Addressed billing errors by working directly with vendors to obtain credits for overcharges.
• Use of Proprietary Industry Benchmarked Analytics:
  Limitless Vendor Management used proprietary industry benchmarked analytics to empower informed decision-making in contract negotiations. Leveraged advanced data insights to ensure competitive rates and favorable terms.

The Results

Impact and Outcomes:

• Substantial Cost Savings:
  Achieved over $2.7 million in total cost reductions over the past 10 years across multiple services, including Billing Optimization and Consulting. 
  • $1.3 million in savings were specifically realized through the implementation of the VMS Platinum platform, which continues to generate ongoing savings.
• Secured better contractual rates and terms, ensuring long-term cost efficiency.
• Operational Efficiency:
  Freed internal resources from administrative burdens, allowing focus on core operations. Centralized vendor management processes, enhancing visibility and control.
• Credits and Error Recovery:
  Obtained substantial credits for historical billing errors, directly enhancing cash flow.
• Improved Vendor Relationships:
  Established clearer communication and more favorable terms with vendors. Leveraged benchmark analytics to negotiate industry-leading contract terms.

Client Testimonial

“I am writing to express my heartfelt gratitude for the exceptional work and valuable contributions made by your Limitless team to our organization. Your team’s meticulous attention to detail and comprehensive analysis of our financial processes and contracts have uncovered areas where significant cost reductions and operational efficiency improvements could be made. These changes were seamlessly implemented, resulting in our company’s substantial cost savings of over one million dollars. This remarkable achievement not only showcases your team’s dedication and professionalism but also underscores the strength of our partnership.

We appreciate the thoughtful gesture of recognizing this milestone with cookies for the team, a plaque, and a sincere letter of acknowledgment. Please convey our gratitude to your team for their excellent communication and collaboration. It is evident that Limitless is not only committed to delivering results but also to nurturing positive client relationships.

I firmly believe that our collaboration exemplifies a successful business partnership built on trust, transparency, and shared objectives. The savings you have generated had a profound impact on our bottom line and enabled us to invest in further growth and innovation.

As we move forward, I am confident that our partnership will continue to flourish. Your team’s expertise and unwavering commitment to excellence are truly commendable, and I eagerly anticipate the continued success and prosperity we can achieve together.

Once again, thank you for your outstanding work and the remarkable results you have delivered. Please extend our appreciation to your entire Limitless team.”

—E. Aaron Koelsch, President & CEO, Koelsch Communities

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