Among the impacts COVID-19 has had on the senior housing industry is that it’s accelerated some trends that were already playing out. Chief among them: the need to diversify revenue so that communities’ bottom lines aren’t quite so dependent on census.
The pandemic has also heightened the labor woes that the industry was already facing.
Now, as we close out our second full year of the pandemic, many community leaders are looking for growth opportunities that make sense for the new normal. Here’s a roundup of three trends we’re seeing.
1. Revenue Diversification via Ancillary Services
A recent study from the American Seniors Housing Association (ASHA) found that assisted living communities increased revenue from ancillary services by 26 percent last year. Anecdotally, we’re seeing communities across the acuity spectrum do the same, branching into…
- In-home health care.
- Other in-home services.
- Pharmacy.
- Fitness.
- Concierge.
- Rehab.
Let’s take a closer look.
American Baptist Homes of the Midwest (ABHM), for example, has partnered with in-home care franchise HomeCare Advocacy Network to launch in-home care services in its communities.
The thinking is that this will let ABHM expand its reach at both ends of its normal relationships, providing in-home care to those not ready to move to a residential community (whether because of COVID-related concerns or for other reasons) and helping those who leave an acute care setting transition back to residential life.
Then there’s Washington-based Sinceri (formerly JEA), which is expanding its offerings beyond memory care into AL and IL, as well as in-home care and pharmacy offerings.
Massachusetts-based Five Star Senior Living is taking an even more drastic approach, transitioning ownership of its core communities to other operators and focusing exclusively on ancillary services including fitness, concierge, home health, and outpatient rehabilitation.
And Ascension Living, the senior housing branch of the Ascension health system, has both spun up at-home services (including both home care and things like housekeeping) and partnered more closely with the healthcare part of the system to expand its telemedicine offerings.
Another approach we’re seeing is communities wading into the insurance side of things.
2. Offering a Medicare Advantage Policy
In 2019, CMS updated its Medicare Advantage (MA) program requirements such that private MA administrators could cover some types of unskilled in-home care. This presented a big opportunity for senior housing communities, which are home to tens of thousands of Medicare beneficiaries, to launch their own MA plans.
That’s no small undertaking, of course.
For one thing, communities that do it need a certain amount of scale to make it worthwhile. (That’s why Juniper Communities, Christian Living Communities, and Ohio Living formed Perennial Consortium to offer an MA plan collectively.)
For another, succeeding as a Medicare Advantage provider requires communities to make preventive care – rather than hospitality – their primary approach to resident engagement.
And then there’s the fact that running an insurance plan is a lot of work. Communities that decide to launch an MA policy will likely have to partner with a group that can handle the back-office side of things, as this Senior Housing News piece points out – and possibly with providers and other members of the ecosystem.
Still, there are advantages for groups that figure out the details. In addition to Perennial, Marquis Companies and Cantex Continuing Care Network have recently launched Medicare Advantage programs.
Kai Hsiao, former CEO of Oregon-based Eclipse Senior Living, has speculated that the merging of insurance and care delivery may indeed be the future of the industry, suggesting that large private insurers might “cut out the middleman” and acquire communities providing care to their customers.
Whatever the future holds, though, an unavoidable part of the present is the labor shortage.
3. Growth via Staffing Synergies
As we all know, staffing costs are through the roof right now in the senior housing space. Many communities are looking for relief from the sky-high agency rates they’re paying to address chronic staffing shortages.
One possible solution is to post open shifts on platforms such as Kare, a gig economy jobsite exclusively for the senior housing and nursing home industry.
But Washington-based Aegis Living is taking a different approach, launching its own staffing arm. The premise: make open shifts among the communities it operates available to all qualified workers in the system. As of late last year, the plan was to launch Aegis Staffing as a pilot for 12 to 18 months.
If nothing else, the group hopes to fill open roles for less than the $10 to $11 million it reportedly spent on agency staffing over the last year.
And if the model works, it could be big for the industry. In clinical settings, pay for travel nurses is skyrocketing to 4x (and more) what full-time nurses are being paid for the exact same work.
Curious about wages at your comp communities right now? Find out with a LivingPath Wage & Salary Benchmark report.
Many Opportunities to Adapt to Fast-Changing Conditions
What’s clear from the last two years is that senior housing is changing – in no small part because of the pandemic’s effects on everything from the economy to architecture to our collective view on communal living.
What remains to be seen is which strategic adaptations are most likely to yield sustainable new revenue streams. The good news: there is no shortage of opportunities for communities to try.
