Larry Cohen

Capital Senior Living’s first national public health initiative to better protect residents from the effects of the flu resulted in “significant reductions in infections, hospitalizations and deaths nationwide,” CEO Larry Cohen said Tuesday on the company’s fourth-quarter and full-year 2017 earnings call.

“Through our efforts, we have been able to limit the number of flu infections to 2.7% of residents, with less than 0.5% of residents hospitalized,” he said. “All hospitalizations, other than, unfortunately, two deaths of high-risk residents, were short-term in nature, and all residents subsequently returned to their respective Capital Senior Living community.”

Almost 95% of communities that had flu cases saw only one resident become ill, Cohen said.

The company launched the public health initiative — which includes staff training, preventive measures and infection control protocols — in its 129 independent living, assisted living and memory care communities “as soon as the CDC issued a health advisory on the 2017-2018 flu epidemic,” Cohen said. Specific components of the program include “appropriate hand hygiene, education of our staff, isolation protocols for symptomatic residents [and] shutting down public areas and common areas when we’ve got an outbreak in a community,” Executive Vice President and Chief Operating Officer Brett Lee said.

“Despite the worst flu season since 2009, year-to-date, we had the lowest amount of occupancy loss over the past three years, and our net loss of approximately 50 net units in February is considerably better than the net loss of 272 units in the first two months of 2017,” Cohen said.

Lee said flu cases at Capital peaked in mid-January and have declined since.

But the public health effort will protect residents from outbreaks of other communicable diseases in the future, too, he said. “So although the flu season may continue only for a few more weeks, we feel like we’ve got fundamental processes in place that will protect us going forward,” Lee said.

The initiative will be detailed in an upcoming issue brief that will be distributed to members of the American Seniors Housing Association, Cohen said, adding that he hopes other operators will find it useful.

“The reason that we filed this brief is we feel so strongly that this will help the entire industry combat flu in future years. It’s something that happens every year,” he said. “It should not be an excuse. It’s part of our business. It’s part of our DNA. It’s what we do. And to provide the right quality to our families and residents, we have the responsibility of taking precaution and having the best measures possible to protect the wellness and health of our residents and employees.”

The issue brief also is available on the Securities and Exchange Commission website as part of a Feb. 28 filing by Capital Senior Living. 

Also during the call:

  • Accountable care organizations. Lee said Capital is in talks with three large acute care systems about potential accountable care affiliations that could improve occupancy for the company and coordination of care and overall health for residents. “At this point, we’re not talking about any kind of risk-sharing agreements,” he said. “What we are talking about is sharing quality data with them to enhance our own outcomes, and in exchange for that, we will essentially become a preferred referral source for their discharge planners.” Residents involved would be private-pay, Cohen added. Assisted living can cost $150 per day — lower than post-acute care — compared with $2,271 per day for hospital care, Capital said in a presentation released in conjunction with the earnings call.
  • Initiatives. Lee detailed a new standardized operating model and other initiatives that have resulted in the implementation of a Lean daily management system to facilitate daily discussions to drive continuous improvement; retraining of employees on a new customer service platform designed to create a uniform resident experience across the portfolio; organizational changes that have the field-based sales team reporting to regional sales leaders; changes to sales training based on the results of monthly “secret shopping” visits; modifications at the company’s centralized call center to more quickly respond to leads; execution of a national contract to reduce rates for contract labor; and enhanced social media and electronic marketing efforts, especially in markets were occupancy dips below expectations, which led to more than 6,000 new prospect leads in January.
  • GAO report. When asked about a recent report from the Government Accountability Office of gaps in reporting by state Medicaid offices to the federal government about care and services provided to Medicaid beneficiaries living in assisted living communities, Cohen said: “It is innocuous. It is something that deals with their looking at certain states on Medicaid and getting more information. But no one believes it’s going to lead to any type of oversight regarding assisted living.”
  • Satisfaction surveys. Cohen cited Capital’s No. 3 ranking in J.D. Power’s first assessment of large senior living operators as well as the results of the company’s own annual resident satisfaction survey, which was conducted by an independent third party and found a 94.6% satisfaction rate among residents.
  • Hurricane Harvey. Capital lost $2.2 million in revenue in the fourth quarter because two communities in Houston remain closed due to damage from Hurricane Harvey, Chief Financial Officer and Senior Vice President Carey Hendrickson said. “Remediation of these communities is on schedule, and we expect to begin admitting residents at both communities early in the second quarter of 2018,” he said. A public relations and marketing effort already is underway, Lee added.
  • Future plans. Lee said that in April, the company plans to implement a procurement platform to eliminate the use of paper invoices, reduce variation in purchasing and reduce costs related to food and other purchases. Additional future plans, he said, include the company’s first employee engagement survey, which will be conducted by an independent third party; it has the ultimate goals of reducing turnover, increasing employee satisfaction, minimizing wage pressures and improving the resident experience. Also, Lee said, a third party will evaluate all of Capital’s fixed costs, such as utilities, IT, telecommunications and waste management, in an effort to reduce costs and enhance services.