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Labor issues are slowing the senior living and care industry’s recovery from the coronavirus pandemic, but operators should not spend much time worrying that they will lose workers if they implement a COVID-19 vaccination mandate, Sabra Health Care REIT President, CEO and Chair Rick Matros said Thursday on the company’s third-quarter earnings call.

Currently, 40% of the operators in the Irvine, CA-based real estate investment trust’s portfolio have mandated COVID-19 vaccination, and just under 80% of workers across operators have been inoculated against the coronavirus, he said.

“For those that haven’t mandated, there still is a fear that they’re going to lose too many employees if they mandate,” Matros said. “But the data just really hasn’t supported that. All the operators that we are aware of that have mandated simply haven’t lost that many employees, and they’ve actually been able to use that as a recruiting tool because they do have a safer environment.”

Operators such as Enlivant, Holiday Retirement, Genesis, Atria Senior Living, Juniper Communities and others, he said, have seen “low to mid single-digit attrition” after implementing a vaccine mandate.

Matros noted that the mandates announced Thursday by the Occupational Health and Safety Administration and the Centers for Medicare & Medicaid Services mean that, soon, almost everyone working in senior living and skilled nursing will be vaccinated.

Under the OSHA emergency temporary standard affecting companies employing 100 or more workers, and the CMS emergency regulation affecting long-term care and other healthcare facilities that participate in the Medicare and Medicaid programs, workers must be fully vaccinated by Jan. 4. The OSHA rule allows employers to adopt a policy requiring employees to choose to either be vaccinated or undergo regular COVID-19 testing and wear a face covering at work. The CMS rule, however, does not have a testing and masking option.

The OSHA rule applies to larger senior living employers, but the CMS rule only applies to entities over which CMS has authority.

Even though the CMS rule does not apply to senior living, “Our guess is that most of the senior housing providers will use that [rule] as ‘cover,’ because a lot of them really want a mandate,” Matros said. “So I think we’ll see more senior housing operators mandate anyway.”

One of the reasons for continued workforce challenges, including burnout among workers, is that some workers have chosen not to get the COVID-19 vaccine, Matros said. Therefore, he added, people are “somewhat hopeful” that workers will return “once folks have a chance to take some time off and, particularly, once everybody is vaccinated.”

Labor pressures vary by market, Matros said. “For example, in California, the Northeast states and Texas, the labor shortage just hasn’t been as bad as in other markets,” he said. “It’s also better in states that have kept up with wage increases. Florida and the Southern states, for example, are far behind on wage equity, and so our operators in those states are having more difficulty with labor than in other states.”

The solution to the sector’s labor shortage remains “blurry,” said Talya Nevo-Hacohen, executive vice president, chief investment officer and treasurer.

But the REIT is seeing “clear signs of demand for senior housing and believe that the operators will mitigate labor shortages through initiatives on compensation, culture and safety,” she said.

Matros said that in senior living, “by the end of 2022, we should be in pretty good shape” regarding occupancy recovery.

Also on the earnings call:

  • Matros said that Sabra’s exit from 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, will close in mid-2022.
  • The REIT’s pipeline is “very active” and has a value of approximately $2 billion, he said.