A Perspective on the New Year and Beyond
A guest post from Eldermark Senior Vice President Mark Anderson:
When the calendar turned over to 2021, the prognosticators got very busy sharing their insights and predictions for what the new year will bring , and the senior living industry is no exception. Social media and newsletters that serve senior living are guessing what we may expect to see and experience over the coming weeks and months. So, as a boomer and a veteran of senior living operations, I am contributing my perspective to count among the others.
During the closing weeks of 2020, I shared with my colleagues my belief that the pending new year would likely bring a climate of continued instability for our senior living customers – financial instability, workforce instability, and occupancy instability. This climate will, unsurprisingly, require our particular attention in providing technological solutions and support within our product offerings and customer service efforts. These areas of instability will carry uncertainty, worry, and perhaps distractions from what effort is really required to manage or even overcome any uncertainties.
I like stability – and I am certain that most share this affinity for calm waters and smooth sailing. However, 2021 seems to already offer white caps and a stormy horizon.
The pandemic has decimated cash flow for many senior living provider organizations. A recent study conducted by the American Health Care Association / National Centers for Assisted Living delivered staggering data on the future financial viability of the 240 AHCA/NCAL member assisted living operators who participated in the study:
– 28% reported their companies/communities can sustain operations for only four to six more months.
– 22% reported they can sustain operations for seven to twelve more months.
– 6% believe they can sustain operations for one to three more months.
– 44% reported they can sustain operations for more than twelve months.
– 55% report operating at a loss.
– 30% reported operating at a profit margin of 0-3% and 16% reported operating margins of more than 3%.
The unplanned expenses for PPE, cleaning supplies and staffing management — combined with the lower than planned revenue related to dropping occupancy — have created a storm where the search for cash is a constant struggle. Even with the arrival of vaccine relief, the compass needle continues to point toward more of the same challenges over the course of the upcoming year.
We entered the pandemic at the start of 2020 with workforce and staffing challenges. The senior living industry’s concern about having the capacity to employ an adequate workforce to meet resident customer needs will require continued efforts in creative resource management for the foreseeable future. No one needs a crystal ball to make such a statement.
And, finally, occupancy woes will require considerable time to be remedied. In many sectors, trust in the senior living industry has eroded among potential customers. And, as any operator will testify, it takes considerable effort to recover from any dramatic drop in occupancy, regardless of the size of your operation and regardless of a global pandemic. Potential senior living customers have not suddenly found long-lasting alternatives to the current product offering; however, they are finding ways to manage their needs for now and, for many, they are forcing their hand to consider creative solutions that may just deliver what is needed for now and for the weeks and months to come, taking the assisted living choice off the list.
It seems likely that the pandemic and the transition to this new year have delivered a substantial degree of creative thinking and the consideration of alternatives towards what we have deemed to be normal courses of action in the past. From a broader perspective, here are a few of my thoughts as I gaze out towards the horizon:
– Telemedicine has been embraced as a workable approach to care and well-being and will continue to grow in its application and role in effective care management.
– The senior living environment, from an architectural perspective, has been reconsidered to address growing preferences for space between individuals, affecting how these settings look and feel from the current models.
– The number of small, more intimate senior living settings will continue to grow substantially, serving as a preferred alternative to large, fancy communities with exhaustively long corridors.
– Community-based senior-focused settings will become preferable, offering lifestyle-seeking customers the experience of multi-generational neighbors and lifestyle choices beyond what can fit within a wall-mounted calendar. Health care will go to the individual rather than the individual going to the health care.
– Paying caregivers an actual living wage in recognition of their essential work within our senior care industry and their place in our local economy will continue to gain momentum.
– To regain tighter control of financial outcomes, ownership/investment groups will diminish their relationships with senior living management organizations, taking on the day-to-day oversight themselves aided by advances in technology and the now rich availability of data reporting.
– The role of effective risk management practices will grow and find their place as a normal way of doing business in response to heightened regulatory oversight, a surge in liability claims, and post-pandemic consumer demands/expectations.
I could go on all day with all that I’ve learned over the past 10 months about what works, what doesn’t, and where the gaps exist in our senior living models that would benefit from careful study and critical thinking. For those of us who embrace change, we are ready for the effort required. For those of us content with the status quo, I recommend a tight grip as the ride to the horizon is going to be bumpy.
Eldermark’s software solutions can help customers improve workforce efficiencies, resident health outcomes and financial performance. Get in touch with us today to put our solutions to work for you.