Q: How do I deal with emerging headwinds?
A: Focus on fundamentals.
Many stabilized occupancies have dropped from the 90% plateau to the mid-80% range. Increased new competition has intensified demand versus supply balance. Many operators are struggling to sustain the critical 0.5% to 1.0% spread between annual operating expense escalation while executing market-responsive monthly service fee increases. Older communities are facing stiff competition from new competition. The average age of a new resident is increasing along with typical acuity levels. Direct care costs, in terms of minutes per resident-day, frequently are not measured accurately or monitored resulting in uncompensated cost creep. Increases in the minimum wage in a number of markets is affecting labor costs beyond just entry level workers as many other staff members also expect traditional increases in their wages. Staff turnover is increasing. The list continues.
The good news is that there are a number of practical, cost-effective strategies that can be implemented if we just … focus on fundamentals.
Jim Moore is president of Moore Diversified Services Inc., a national senior housing and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for 46 years. He has authored five books about senior living and healthcare, including Assisted Living Strategies for Changing Markets and Independent Living and CCRCs. Jim Moore can be reached at (817) 731-4266 or firstname.lastname@example.org.