Health Dimensions Group has put together its “Top Trends in Aging Services” list for 2019, and several of them are especially relevant to senior living community operators. So let’s grab our Alka-Seltzer and dive in, shall we?
NOI challenges. Net operating income increasingly will be challenged by occupancy and workforce issues, the consulting and management firm says.
“Absorption rate of new units entering the market is a large contributing factor, as new construction entering the market continues to outpace demand,” HDG says, citing data from the National Investment Center for Seniors Housing & Care. “Senior housing providers also face wages for staff outpacing the rent growth.”
Swift investor action. Also, according to HDG, expect real estate investors to install “monitoring safeguards” to enable quick and accurate reporting of operating trends so that they can recognize when communities are performing poorly and can develop “course-correcting plans … before the operation spirals into crisis.”
“Significant” workforce challenges. Worker shortages, wage and benefit costs, and employment law enforcement also will increase next year, HDG says. Crucial to success among these variables will be regular employee engagement surveys and real-time labor management systems, “deliberate” talent acquisition strategies and a culture of “continuous learning,” according to the consulting firm. HDG also predicts the increased sharing and centralization of back-office personnel among operators and even their competitors so that operators can focus on their core missions.
Asset repurposing. “To adapt to the changing landscape, more [skilled nursing facilities] will convert to senior housing alternatives, such as low-income or market rental apartments, specialized units like traumatic brain injury or mental health units, assisted living, or memory care assisted living, all of which have experienced increasing consumer demand,” HDG says.
Additional trends especially affecting the skilled nursing part of aging services in 2019, according to the HDG, include Medicare fee-for-service payment reform, Medicare’s value-based payment model, more complex continuum and network development, managed care model growth, the need to better manage psychosocial issues, rural health innovation and aggressive cash management related to managed care. If interested, you can read more about them in our sister publication, McKnight’s Long-Term Care News.