When Rick Matros speaks, people listen. That is, unless they are too mesmerized by his body art to pay attention.
Matros gave us a mouthful during an earnings call Tuesday. Sabra Health Care REIT’s Big Kahuna eagerly addressed why his firm just enjoyed another nice quarter. Senior housing occupancy continues to increase and is now just a smidge shy of 80%. And the runaway inflation that made 2022 a senior living employer’s nightmare appears to be slowly receding.
The result for Sabra — and for many other senior living owners and operators lately — is that operating conditions are generally, if slowly, improving. Happy days might not quite be here again. But compared with COVID’s carnage, the view is a serious upgrade.
Not that Sabra is alone. Brookdale Senior Living also reported an uptick in earnings and revenues Tuesday. And by all indications, there’s more of where that came from.
Still, senior living operators are anything but out of the woods. In fact, three challenges remain very much in the picture. To wit:
Despite some favorable trade winds, operators are still finding it difficult to find and keep competent staff. Among the most problematic positions are administrators, marketing directors, nurses and frontline staff.
Several factors help explain the continuing crisis. They include the often undesirable nature of working with very sick, very old people; relatively low pay; long-hours; increasing competition from other sectors — and the physical demands of working in this field.
Senior living communities must operate within highly regulated environments. Meanwhile, state and local rules continue to mount. And although federal rules have not yet happened, you just never know.
Although this week’s earnings reports show improvement, let’s not kid ourselves. For every operator saying the worst is over, there’s a Friendship Village that got lost somewhere down the line.
Part of the fiscal challenge is due to increasing competition. Part of the challenge is poor management. And, frankly, part of the problem is operator greed.
In the best of times, senior living can be a very challenging enterprise. Operators who behave in ways that are reckless, careless or clueless do so at their own risk.
John O’Connor is editorial director for McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.