2021 began with the hope that the new COVID-19 vaccine being rolled out to assisted living communities and nursing homes would help control a pandemic that had caused so much illness, death, loneliness, isolation and worker fatigue in long-term care in 2020.
COVID and staffing remain the biggest challenges facing the industry, but shortly after vaccines became available, many senior living operators began mandating them as a condition of employment to try to protect resident and worker physical and mental health and get back a sense of normalcy. By November, companies such as Brookdale Senior Living, Atria Senior Living and Holiday Retirement were reporting staff vaccination rates of virtually 100%.
Now the task facing many operators is to encourage staff members and residents to get booster shots, with some companies considering mandating them.
Beyond company requirements, the federal government — specifically, the Occupational Health and Safety Administration and the Centers for Medicare & Medicaid Services — in early November issued vaccination mandates for employers of 100 or more workers and facilities such as nursing homes that participate in the Medicare and Medicaid programs, respectively.
Settings such as assisted living communities were subject to OSHA’s separate COVID healthcare emergency temporary standard, announced in June, and therefore were exempt from the OSHA vaccination-and-testing emergency temporary standard. The healthcare rule expired Tuesday, however, leading some to conclude that assisted living companies now must comply with OSHA’s vaccination-and-testing standard, although uncertainty remains.
OSHA announced Saturday that it will start enforcing the rule’s requirements Jan. 10, although the standard still faces legal challenges. Meanwhile, the CMS COVID vaccination rule is facing its own challenges.
2021 began and is ending with assisted living providers fighting for more aid. Relief to date is nowhere near the level of funding Argentum and other organizations sought for assisted living, independent living, memory care and continuing care retirement communities to help with personal protective equipment, staff and testing needs.
After months of pleading from associations and operators, the industry in September welcomed the news that the federal government would be making $25.5 billion in new funding available to healthcare providers, including assisted living operators, affected by the COVID-19 pandemic. The Department of Health and Human Services announced that Phase 4 Provider Relief Fund payments would be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021, and smaller providers would be reimbursed for lost revenues and COVID-19 expenses at a higher rate compared with larger providers.
Payments began being sent out earlier this month, although Argentum called the amounts to assisted living providers “grossly low,” and other industry advocates, such as LeadingAge and the American Seniors Housing Association, also expressed disappointment.
The latest NIC MAP quarterly data, however, provide reasons to be “cautiously optimistic” about the senior living industry’s comeback from the pandemic, National Investment Center for Seniors Housing & Care Chief Economist Beth Burnham Mace told McKnight’s Senior Living in early October. A significant rebound in demand, combined with a modest increase in supply, contributed to a 1.4 percentage point increase in senior housing (independent living and assisted living combined) occupancy in the third quarter. Occupancy inched up to 80.1% from a pandemic-related low of 78.7% in the second quarter.
Meanwhile, a report issued in November by the American Health Care Association / National Center for Assisted Living said that assisted living communities are experiencing a labor crisis that is worse than any other healthcare sector. The authors noted that such communities have seen industry employment levels drop by 38,000 jobs (an 8.2% loss) since the beginning of the pandemic, according to October employment data from the Bureau of Labor Statistics.
Fraud and murder remain in the news
Beyond COVID, two other stories continued to dominate senior living-related news in 2021.
Philip Esformes. One of our last articles of 2020 announced the commutation of assisted living community and skilled nursing facility owner Philip Esformes’ 20-year prison sentence by outgoing President Trump in a case that the federal government valued at $1 billion and described as “the largest healthcare fraud scheme charged by the U.S. Justice Department.” (On Trump’s final day in office in January, he also commuted the 15-year sentence of Jon Michael Harder, the former CEO of Sunwest Management convicted of defrauding assisted living community investors of millions of dollars.)
In January, McKnight’s Senior Living reported that Esformes was appealing $43 million in financial penalties stemming from his conviction, which the commutation did not erase. In April, Justice Department prosecutors informed a federal court judge of their intentions to retry Esformes on the main healthcare fraud conspiracy charge from his first federal court trial in 2019. And in August, a federal judge set a $50 million surety bond for Esformes as he awaited trial.
Billy Chemirmir. In other news, alleged senior living serial killer Billy Chemirmir had an 18th count of capital murder added to charges against him in January. A trial on one of the charges began in November, but a mistrial was declared after jurors continued to be deadlocked 11-1 after two days of deliberations.
Prosecutors said they plan to bring the case to trial again. In the meantime, Chemirmir remains in jail, awaiting trial in several other pending cases.
Police believe Chemirmir posed as a maintenance worker for more than a year to gain access to residents’ living quarters and then suffocated them and stole jewelry and other items to sell at area pawn shops. Most of the deaths initially were ruled to have been from natural causes until one potential victim survived and described her attack to police. A bipartisan group of Texas lawmakers introduced bills in 2021 in response to the series of suspected murders thought to be tied to Chemirmir.
Many changes at operator level
In company-specific news, the following stories caught many readers’ eyes.
Brookdale sells 80% stake in home health business. In February, the country’s largest senior living company, Brentwood, TN-based Brookdale Senior Living, announced that it had agreed to sell its majority stake in Brookdale Health Care Services — provider of home health, hospice and therapy services — to HCA Healthcare. The purchase price was $400 million. Brookdale maintains a 20% equity interest in BHS, and Brookdale senior living residents still have access to the services it provides. The move was designed in part to position Brookdale’s core senior housing operations for sustained growth, the company said.
Five Star exits skilled nursing business. In April, Newton, MA-based Five Star Senior Living announced that it would be exiting the skilled nursing business completely and also would transition the management of 108 senior living communities to other operators under amended management agreements with real estate investment trust Diversified Healthcare Trust. Five Star said it was making the moves to focus on larger senior living communities as it also expanded its rehabilitation and wellness services business. By mid-November, Five Star had completed its exit from skilled nursing and the transition of 107 senior living communities ahead of schedule; DHC planned to close and was looking at redevelopment opportunities for the one remaining community.
Erickson unveils new name, logo as part of $3 billion expansion strategy. Also in April, the former Erickson Living announced that it was changing its name to Erickson Senior Living and rolling out a new logo as part of a strategy that will see almost $3 billion in development and construction over the next five years. The plans potentially will expand Erickson’s reach past the 11 states in which it currently operates and bring the total number of continuing care retirement communities it manages from the current 19 to 25 or more.
Atria acquires Holiday, Welltower buys 86 properties for $1.6 billion. In June, Louisville, KY-based Atria Senior Living announced plans to acquire the management services division of Holiday Retirement as Toledo, OH-based REIT Welltower acquired 86 Holiday owned and leased senior living communities for $1.58 billion. Holiday, which at the time of the announcement managed 240 communities in 43 states, continues to operate separately from Atria, with Holiday operations continuing to be supported by a team in Winter Park, FL. Combined, Atria and Holiday now serve more than 45,000 residents with more than 19,000 employees and manage 447 communities across 45 states and seven Canadian provinces.
Ventas acquires New Senior Investment Group in $2.3 billion transaction. Also in June, Ventas and New Senior Investment Group announced that they would merge in an all-stock transaction valued at $2.3 billion, including $1.5 billion of New Senior debt. At the time, New Senior’s portfolio had 103 private-pay senior living communities, including 102 independent living communities and one continuing care retirement community, across 36 states. Ventas said it expected the New Senior properties to cater to a large and growing middle market and to complement its existing high-end, major-market senior housing portfolio. The acquisition also built on Ventas’ existing operator relationships with Atria and Holiday and added new operators to Ventas’ portfolio, including Grace Management, Merrill Gardens Senior Living, Hawthorn Senior Living and Watermark Retirement Communities.
Sabra announces intention to exit Enlivant JV. In August, Irvine, CA-based Sabra Health Care REIT announced that it planned to exit a joint venture with private equity firm TPG Real Estate through which it has a 49% stake in a portfolio of 158 Enlivant senior living communities. The portfolio had “taken a hit during the pandemic” and had declined in value by approximately $164.1 million in the second quarter, Sabra President and CEO Rick Matros said. Enlivant continues to manage communities for Sabra, and Matros said he expects the REIT’s relationship with the company to grow.
Diversicare acquired by DAC. Also in August, Brentwood, TN-based long-term care operator Diversicare Healthcare Services announced that it would be acquired by New York-based retirement assets manager DAC Acquisition. Diversicare, which as of June 30 had operations including 397 licensed assisted and residential living beds as well as 61 skilled nursing centers with 7,250 licensed nursing beds, now is a privately held company, wholly owned by DAC Acquisition, and no longer is traded over the counter or subject to Securities and Exchange Commission reporting obligations.
Eclipse to cease operations. In October, Ventas announced that Lake Oswego, OR-based Eclipse Senior Living would cease business management operations in 2022 after 90 senior living communities it manages for the Chicago-based REIT are transitioned to new operators. Ventas said that the communities, located in 20 states, were “adversely affected” by the coronavirus pandemic and would be moved to eight other operators. In a Dec. 14 business update posted to its website, Ventas said that 76 of the communities had transitioned and that the remainder were expected to move by January. Operators include Sinceri Senior Living (formerly JEA Senior Living, 21 communities), Discovery Senior Living (19), Priority Life Care (17), American House Senior Living Communities (13), Sodalis Senior Living (13), Grace Management (4), and Sonida Senior Living (formerly Capital Senior Living, 3). (Note the recent name changes of two of the operators. Effective Nov. 15, the former Capital Senior Living is Sonida Senior Living. A little earlier in the year, the former JEA Senior Living announced a name change to Sinceri Senior Living.)
Recognition and rankings grow
Also, this year, several operators and individuals were recognized for their accomplishments, and plans for a new recognition program were announced.
McKnight’s Women of Distinction. The third annual McKnight’s Women of Distinction awards lauded 52 women in senior living and skilled nursing in May. One Lifetime Achievement Award honoree, 19 Hall of Honor inductees, 15 Veteran VIPs and 17 Rising Stars were feted. The virtual event also included educational webinars. (The regular deadline for submitting nominations for the 2022 awards program is Jan. 5. Nominations still may be submitted Jan. 6 to Jan. 12 with an increased entry fee. Read more here.)
AHCA/NCAL largest operators list. Brookdale led a “top 30” list of largest assisted living operators published in June by the American Health Care Association / National Center for Assisted Living.
Argentum largest operators list. Brookdale, LCS and Holiday retained the top three spots on Argentum’s list of the 150 largest for-profit senior living providers, announced in July.
Fortune Best Workplaces. In August, Fortune announced its Best Workplaces for Aging Services lists for 2021, the fourth round of such lists the media outlet published in partnership with people analytics firm Great Place to Work and Activated Insights, the senior care affiliate of Great Place to Work. Once again this year, Baltimore-based Brightview Senior Living and Taylorsville, UT-based Summit Vista topped the annual lists for large and small-to-medium sized companies, respectively, as they had in 2020. Brightview also topped the 2019 list for large senior living and care employers.
U.S. News Best Senior Living. In September, U.S. News and World Report announced that it had launched a “Best Senior Living” initiative with the goal of releasing inaugural listings for consumers in the first quarter of 2022. The program, which is not a ranking, will cover individual independent living, assisted living, memory care and continuing care retirement/life plan communities. More than 2,500 individual communities already have committed to participating.
ASHA largest owner and operator lists. Brookdale and Welltower topped the ASHA 50 lists of the largest senior living operators and owners, respectively, which the American Seniors Housing Association announced in September.
LeadingAge Ziegler 200. Wellesley Hills, MA-based National Senior Campuses retained the top spot on the LeadingAge Ziegler 200 list of largest not-for-profit multi-site senior living and care providers, announced in October, for the sixth straight year. The company oversees the development and operation of communities by Erickson Senior Living.
McKnight’s Tech Awards. McKnight’s bestowed 13 awards to senior living providers during the annual McKnight’s Excellence in Technology Awards. Awards in senior living, skilled nursing and home care tracks were announced during an October online event that also included educational webinars. Winners, finalists and program sponsors also were recognized in observances at the AHCA/NCAL Convention & Expo in National Harbor, MD, and at a reception coinciding with the LeadingAge Annual Meeting & Expo in Atlanta.
J.D. Power study. Atria and Life Care Services topped J.D. Power’s 2021 Senior Living Satisfaction Study for satisfaction in assisted living / memory care and independent living, respectively, J.D. Power announced in November.
Caring Stars. Also in November, 439 senior living and care communities in 44 states were recognized as “Caring Stars of 2022” by Caring, the review and referral website. Louisville, KY-based Atria Senior Living and Winter Park, FL-based Holiday Retirement, acquired by Atria this year, topped the list.
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