COVID-19 has had a devastating effect on the senior living industry. But industry experts said Wednesday that they are optimistic it will emerge a better product on the other side.
“There’s nothing like a crisis to bring us all together,” Argentum President and CEO James Balda said during a session at the American Health Law Association 2021 Long-Term Care and the Law conference, held virtually. Balda was part of a panel of speakers discussing what the new administration means to long-term care operators. Topics covered included the pandemic effects and the related recovery, regulatory oversight, COVID-related legal protections, and workforce issues such as immigration and pay.
The senior living industry, Balda said, went into the pandemic on the tail end of a multi-year downturn in occupancy. Occupancy levels were just starting to improve in the fourth quarter of 2019 and then the pandemic hit, sending occupancy rates to historic lows.
Decreasing occupancy on top of incremental expenses for personal protective equipment, testing, “hero pay” and staffing challenges, and changes to the business model led to a $15 billion financial impact on the senior living sector, Balda said.
“For us, the key now is to continue to get the flow of that financial relief. It will probably look a little different than it did last year, but we have to keep that financial support coming to our providers,” Balda said. “The long-term care outlook is incredibly positive, but the toll this has taken on our communities, I don’t think it can be overstated.”
A little like Groundhog Day
Although the clinical side of things already is beginning to recover, the “nightmare” is just beginning on the business side, American Health Care Association / National Center for Assisted Living President and CEO Mark Parkinson said.
American Seniors Housing Association President David Schless added that assisted living, which did not receive much federal or state assistance to battle the pandemic, hasn’t received any assistance to cover third- and fourth-quarter losses due to COVID-19, which is where the industry “really began to feel that pain.”
With the change in administrations, Balda said it feels a little like Groundhog Day, with the industry needing to educate new policymakers about the senior living model. Parkinson added that the industry also is starting with much less potential aid. The $175 billion Provider Relief Fund is now reduced to $33 billion, he said, and it’s not clear that the industry is going to see the same support from the fund it received last year.
Previous financial relief from the federal government, Balda said, was specifically associated with lost revenues and increased expenses around COVID-19. Future relief, he said, will focus on vaccinations and testing, infection prevention and control, and telehealth — a shift to recovery.
Balda said he is optimistic about the industry’s ability to move into recovery mode in the months ahead, but he cautioned that the industry will need to be realistic about the potential legislative challenges that could affect different aspects of the business.
The last Congress introduced bills targeting infection prevention and control, emergency preparedness and planning, and reporting in assisted living. The sector, Balda said, will see more such proposals, as well as potential changes around surveys and the inspection process. In response, he said, the industry will focus on strengthening state regulatory frameworks and identifying best practices to point to as a model.
More federal attention is not unwarranted, said Parkinson, who added that he is hopeful for “thoughtful oversight” and “thoughtful solutions and suggestions.”
“We can’t afford more regulations, a more punitive system, more fines. It just doesn’t work,” he said. “We expect to be scrutinized. We welcome it, and we hope that it goes OK.”
LeadingAge President and CEO Katie Smith Sloan said that “state uniqueness and diversity” are important drivers for state policy, but she added that federal leadership is important.
“What we learned is, a federal program to achieve national goals is not achievable at a state-by-state or county-by-county level,” she said. “We need to rewrite that balance, work together to achieve our goals.”
By and large, Parkinson said, so-called red states passed liability protections, and blue states did not. That reality became even more important after the national election, as it became apparent that major liability protections would not be forthcoming at the federal level, he said.
States will take on an enhanced role in their power over liability and general enforcement of regulatory issues, Parkinson said.
Approximately 12 states have “fairly good” protections that specifically address assisted living, Balda said, and another dozen have some form of protection. An additional 16 bills have been introduced around the country relating to liability protections, he said.
Immigration reform is central to addressing workforce shortages in the long-term care industry, the leaders said.
Sloan noted that a substantial proportion of the direct care workforce consists of foreign-born workers. That supply was cut off in the past several years, she said, but interest in bringing foreign workers into the country legally has been renewed with the new administration.
“Many come from countries where they revere their elders, and they are incredibly valuable workers in our communities,” Sloan said, adding that she is hopeful that a guest worker program proposal focused on aging care sees new life.
Along with seeking support for immigration reform, Parkinson said, it will be important for the industry to make jobs in its buildings better. In some states, the average certified nurse assistant still makes less than $15 an hour, he said, calling that rate “unacceptable.”
“What they’re asked to do, the danger they’ve gone through in the last year — it’s a really hard job in a normal year,” Parkinson said.
“In many ways, a lot of workforce issues are on us to make the jobs in our field valued and valuable — make a healthy workplace culture, find ways to pay a livable wage,” she said. “We have a responsibility.”
Balda said he is seeing providers talking about career paths and apprenticeships, but they need to do a better job of showing workers they have an opportunity in the industry.
“It makes a hard job even harder when you don’t see a future for yourself,” he said.
All of the association leaders said they are optimistic about the industry’s recovery.
“I know we’re not going back to the old normal. We will see changes,” Sloan said. “There’s been too much disruption and too many people turning to the sector who haven’t looked at it or thought about it before. I’m hopeful this is our opportunity to mend some of those cracks.”
Schless pointed to consumer research that suggests improved sentiment toward the industry. A survey of prospective residents and their adult children by ASHA found that the appeal of senior living communities actually increased in the wake of the pandemic.
Balda said that the needs-based nature of the industry will drive its recovery.
“We shouldn’t forget that existing residents and families still have a high opinion of the services they receive. Satisfaction numbers haven’t moved throughout COVID, in large part because of the level of care and services that were provided throughout the crisis,” Balda said.
Much will depend on recovering census, Parkinson said, noting that the third wave of the pandemic in late 2020 “decimated” census. Providers, he said, will need to see census recover 1% each month to be able to keep their heads above water.
“People need our services. There is a pent-up demand for services,” Parkinson said, adding that the pandemic made clear that healthcare is a big part of the sector. He said he expects to see a renewed shift toward private rooms and changes to physical buildings. “We’ll be a better product as we come out of this.”