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Senior living operators are forecasting that monthly fees for independent living residents in continuing care retirement communities could increase by up to 5% next year, according to responses to a newly released Ziegler CFO Hotline survey.

The poll surveyed more than 260 not-for-profit senior living chief financial officers and financial professionals. Sixty-three percent of the responses came from single-site organizations, and 37% came from multi-site organizations.

A 5% increase would be higher than the median increase for 2022, which was almost 4.5%. That percentage, in turn, was “significantly higher than the typical 3% increase of previous years,” according to the specialty investment bank.

Respondents stated varying reasons for predicting another year of higher-than-usual monthly fees increases and generally said that multiple factors were responsible. Wage increases for employees were a common concern, as well as inflationary costs related to food, utilities and supplies.

“Inflation is secondary to the adjustment to salary and wages (including increased shift differential, sign-on bonus and referral bonus),” one respondent said.

For the most part, CCRC operators did not raise their independent living rates mid-year, according to the survey, with only 10% of respondents saying that they had a mid-year increase in monthly fees in 2022. Approximately half of all participants, however, said that a mid-year monthly fees increase was a possibility in 2023. Just 10% of the respondents said they had raised rates for incoming residents to the higher amount when they moved in; the rest brought in residents at the current rate, and then raised them along with every once else.

One respondent said the provider was “very concerned that we might have to scale back or close some of our [skilled nursing facilities] due to the lack of labor and the price of labor.”

Although one respondent described trying to prepare residents for larger-than-typical increases but said “they were still outraged at our increase despite it matching inflation — and of course, they do not want to give up any services in order to reduce costs.”

That poll participant anticipated monthly fees increases becoming a greater issue in continuing care retirement committees in the coming years. 

“It is getting more difficult as the finance person to want to work in this environment,” the respondent said.