The COVID-19 pandemic has undercut the finances and business model of U.S. senior living communities in a way that was simply unthinkable a year ago.
Occupancy rates fell further to a record low of 80.7% in the last quarter of 2020, compared with more than 87% at the start of the year, reflecting families’ reluctance to subject their relatives to the heavy restrictions of congregate living during the pandemic and, sadly, a higher death rate.
Most communities, understandably, have been in crisis mode for much of the past year and have been propped up financially by emergency government aid. But their long-term survival is going to hinge on how smartly they approach the big-picture challenges of the post-pandemic world.
As they juggle short-term challenges with adapting to the long-term implications of the pandemic, operators can benefit from the so-called “zoom-in, zoom-out approach” that has been used by many successful companies.
The idea is to escape the rigid five-year-plan model, keeping one eye on the present and the other on the very long term, stretching 15 to 20 years out. The longer timeline focuses on potential big-picture market changes and disruptions. The shorter period focuses on building areas that support that long-term view while shedding those that don’t. The medium term should take care of itself.
The following are some of the key areas where communities need to balance thinking on a long-term horizon and adjust their day-to-day practices accordingly. The overarching goals are to provide outstanding care for residents, optimize clinical and financial outcomes, drive competitive advantage, facilitate change and ensure their future.
Telehealth: It’s clear by now that the pandemic has ushered in a new era of telehealth practices that will shape the future of the health industry, including senior living and care. Through virtual appointments, clinical staff members have been able to accompany residents to their physician check-ins, increasing their efficiency and enabling them to spot any health issues at an earlier stage. Older adults have needed support to use the new technology but have adapted surprisingly well, recognizing the benefits for their own safety and time. This is a trend that’s worth investing in for the long term. The aging baby boomer generation increasingly will expect the convenience of telehealth, such as in-home monitoring.
Social technology: The effective use of technology to overcome the social isolation imposed by the pandemic can be a powerful differentiator for operators. Innovative use of internal TV programming, such as virtual religious services, has helped keep residents mentally engaged. Deploying senior-designed video-calling tools has enabled residents to interact in fun ways with their relatives, supporting their mental health during a time when many older adults have suffered from debilitating levels of isolation.
Leverage social media: Building a presence on social media through blog posts, Instagram and other channels is an effective and increasingly important way to strengthen a community’s brand. Sharing the personal stories and performance of staff — from the chef to the director of nursing— is a way to show the human side of the community and create an authentic identity that attracts new residents.
Reimagine space: The pandemic has led to innovations in the way senior living communities use space, such as special, sealed sections of vacant resident apartments dedicated to family visits. This reduces the risk of contamination within buildings and gives residents the close-up contact with loved ones that screen-time can’t quite replicate. Although some of these measures may fade with the easing of the pandemic, lingering concerns about hygiene mean communities will have to keep innovating around the amount of space they have and how it is used. Semi-private rooms, for example, likely will become a thing of the past. The development of household models of care soon may be the norm.
Run a tight ship: The pandemic has been such an extreme event that some communities have become lax on some of the normal operating procedures that ensure maximum efficiency. COVID-19 shouldn’t be an excuse anymore, though. To emerge stronger, operators need to get the basics right, such as maintaining appropriate staff levels and collecting billings efficiently.
Skill up: Communities can increase their profitability by ensuring that they are appropriately skilled for certain therapies and treatments. For instance, one current opportunity is the government’s current waiver on the usual requirement that patients spend three days in a hospital before being admitted to a skilled nursing facility. By making sure they have the skills to assess and treat these patients at an earlier stage, continuing care retirement communities and other long-term care facilities can earn some of the more profitable Medicare dollars. Similar examples apply to senior living.
For communities that have lagged behind in areas such as technology, online marketing and capital improvements, it’s especially important to “zoom out” even when grappling with day-to-day challenges.
If organizations don’t start asking the big questions now about where the industry’s heading and how they can respond, then the hard work of surviving the pandemic may turn out to be in vain.