To say this has been a challenging year might be the height of understatement. Thanks to COVID-19, many operators are finding it more difficult than ever to fill beds and pay the bills.
And the hits just keep on coming. The latest shock comes courtesy of Kennett Square, PA. There, Genesis Healthcare announced that if fiscal conditions continue to deteriorate, it might soon be out of business.
“We estimate the impact of incremental expenses and lost revenue caused by COVID-19 in the second quarter of 2020 was approximately $213 million,” said George V. Hager Jr., the firm’s CEO.
To be sure, Genesis has been taking some heavy body blows lately. But this senior care juggernaut hardly stands alone. Across our nation, skilled care operators, assisted living settings, life care communities, real estate investment trusts and other players are licking their wounds. One hardly needs an MBA from Harvard to see a real mess in the making.
And even if the federal government steps up relief efforts, many operators likely will struggle in the months and perhaps years to come.
Which is one reason why this is probably a good time to get comfortable with a term economists like to throw around: creative destruction.
What does that mean, you ask? It generally is used to describe better products and processes that replace their predecessors.
As we’ve discovered lately, senior living affords plenty of room for improvement in both areas.
From redesigned structures to enhanced technology to revamped health protocols, creative destruction is likely to change the way many senior living organizations look and operate. Or at least the ones that survive.