CEO who fired himself has advice, predictions for you
Lois A. Bowers
The decision by Blue Ridge Village CEO Chris Oswald to fire himself made headlines in the senior living and care community's hometown of Martinsville, VA, and caught the eye of national business publications such as McKnight's Senior Living and sister McKnight's Long-Term Care News late last week.
If you saw the news, you may have tried to imagine yourself in Oswald's shoes and wondered what you would have done if confronted with the same business realities that made him think such a drastic move was necessary to help Blue Ridge stay afloat.
Oswald says the community, which includes a 300-bed rehabilitation center and a 60-bed assisted living facility, faced Medicare changes that negatively affected admissions and revenue (to the tune of millions annually), as well as the loss of a Medicare Advantage contract.
Chances are good, in fact, that you or another leader you know has found or will find himself or herself in the same position as Oswald. If so, then he has some advice for you: “Take the time to explore every option before you do what would be the easy way out, cutting wages and benefits and services, because there's got to be a better way,” he tells McKnight's.*
Oswald says it took him six months to convince his organization's board to accept his idea of stepping down.
“I was turned down six months ago, and it was frowned upon three months ago,” he says. “I think after the last six months' worth of financials, I finally convinced everybody that we had to do something and to make the move. So it was entirely my decision. It was either that or cut some meat out of the facility, and I was unwilling to do that.”
You may not need to fire yourself, but think about whether you can negotiate with lien holders, vendors and others to try to lower costs, Oswald advises. And determine whether it makes sense to add services — such as behavioral or mental health, adult day or respite care — to create new revenue streams, he says.
Good news for assisted living
The good news for assisted living operators, Oswald says, is that most aren't facing the same financial pressures that skilled nursing is confronting, although assisted living communities that accept Medicaid may find themselves coming up short. In Virginia, accepting Medicaid means an $1,100 per-resident-per-month reimbursement, or less than $40 per day for care, food, activities — all expenses, he says.
That's why in Virginia and elsewhere, most assisted living communities are private pay, Oswald says. And he doesn't expect that to change. But even so, many older adults find the prospect of assisted living attractive in part because of the cost, which can be half of private-pay nursing care (approximately $3,400 versus $7,000 at Blue Ridge), and partly because of the “negative connotation associated with nursing homes,” Oswald says.
“So as long as you can meet the acuity parameters of staying in assisted living, it could be a much cheaper option,” he says.
Those acuity parameters are important, Oswald says.
“Assisted living can't dream of handling the type of acuity that we handle in the nursing home side,” he says. “Our assisted living has one full-time nurse per week. It's not designed to take care of those individuals. ...We do have to draw a line in the sand and be very firm about the fact that we are unwilling to take care of those individuals who can't meet the requirements, in terms of acuity, to stay there.”
What the future holds
Oswald says he anticipates the potential emergence of a “hybrid” model of housing and care coming into vogue soon — “nursing staff on a shift-by-shift basis at a higher cost — because the money has got to come from somewhere — to fill the gap between assisted living and the nursing home.”
In general, he predicts that assisted living is going to “explode” in popularity over the next five years “because it's private pay, it's competitively priced against the nursing home private-pay rate and it's privately funded and unaffected by insurance. The whole idea is to drive people out of the federally and state-funded programs and into the private-pay sector.”
Blue Ridge Village, he said, already is thinking about adding an addition to its assisted living, Blue Ridge Manor.
“I think many people will be looking at building additional assisted living facilities to meet the need,” he says. So much so that Oswald predicts “a boom in the construction of assisted living,” and not just in popular retirement areas like Florida.
He says he isn't sure what is in store for him personally, however.
“I've run everything from restaurants to country clubs to long-term care facilities, and I'm going to take a moment to take a deep breath and evaluate what I think may be my options,” Oswald says.
Several companies — local and up to a few hours away — have contacted him to schedule job-related conversations since they read of his news, he says.
Martinsville is about an hour south of Roanoke, VA, and an hour north of Greensboro, NC. Its population was less than 14,000 as of the last census.
Even if Oswald stays in long-term care, however, he says he may not work in a nursing home. “There are a lot of properties today that have a small component, maybe a 30-bed wing for [skilled nursing] individuals. But independent living and assisted living? I've been doing that for 20 years in addition to nursing homes. In some way, shape or form, I probably would want to stay in the industry, but I don't want to limit myself to that, either.”
Right now, he says he is still getting used to the idea of a change, adding that his leaving really hadn't started to “sink in” until Thursday, when the community had a gathering to wish him well, and Friday, when he held his last meeting with department heads.
“We as providers and individuals who work in this industry get very attached to the residents and the families,” he says. “We call ourselves up here the Blue Ridge family, and we really live it. And it includes the staff, residents, families and vendors. We are a part of each other's lives. It's really hard to not be very emotional about it.”
That's one aspect of seniors housing and care that Oswald probably would recommend not changing.
*Thanks to my colleague Marty Stempniak at McKnight's Long-Term Care News, who permitted me to ask some questions during his interview with Chris Oswald.