Workforce issues will continue to be a dominant challenge in the senior living industry in 2019, according to leaders of several organizations representing providers, who shared their thoughts with McKnight’s Senior Living. Other challenges cited involve affordable housing, Medicare Advantage, financing and changes resulting from consumer demographics and preferences.
Addressing these issues will be difficult, but organizational leaders believe they have some answers.
“We hear it from member providers consistently that finding and keeping quality caregivers is a challenge, especially as the economy improves and unemployment rates decrease,” National Center for Assisted Living Executive Director Scott Tittle said. “This is an issue for all long-term care providers, so it’s been a focus association-wide, not just within NCAL.”
Tittle pointed to NCAL’s launch, with sister organization the American Health Care Association, of a Workforce Resource Center at their national convention in October. The online center has the goal of helping members more easily find specific resources related to recruitment, retention and compliance.
“We also announced a partnership with PHI, a leading provider of workforce training programs,” he said. “Next year [in 2019], we’ll utilize that partnership to help provide coaching, training and consulting to help providers deliver quality care. We’re also exploring ways we can expand our reach to job seekers and inspire Americans to consider a career in senior living.”
It will take the entire industry to develop answers to the workforce challenges facing operators, Tittle said.
“We can’t solve this issue alone. It’s going to take all of us, including each provider taking a hard look at their workforce culture, to help address this crisis,” he added. “AHCA / NCAL believes our National Quality Award Program is a great avenue for organizations to examine their current culture, empower and engage staff at all levels and, ultimately, reduce staff turnover.”
87% say workforce challenges affect company growth
Over at Argentum, President and CEO James Balda also put forth finding and developing a professional and caring workforce as a top challenge for the industry. Eighty-seven percent of senior living decision-makers responding to a poll by the organization said that workforce challenges are affecting their companies’ growth, he said.
“We face a labor shortage and are working with our members to better understand how to attract and retain excellent workers,” Balda said.
To put numbers to the problem, he said, Argentum recently analyzed government workforce data to update its Senior Living 2025 roadmap and found that the industry will need to fill spots for 1.4 million workers between now and 2025, representing 281,000 jobs and more than one million jobs for industry workers who are retiring or exiting senior living.
“We are collecting data on industry turnover and retention for a variety of community positions so we can better understand how to address those challenges and to generate new benchmarks for the industry,” Balda said. “A workforce metrics pilot program captured results from approximately 325 senior living communities for nearly 80,000 employees. We are also quantifying core competencies for common occupations and replicating best practices in these areas.”
At its annual meeting in May, Argentum launched Senior Living Works, an initiative meant to highlight careers and opportunities in senior living.
“We are pleased that in less than a year, more than 500 Senior Living Works ambassadors committed to spreading the word that senior living offers a fulfilling and rewarding career,” Balda said. “We also recently launched a Women in Leadership initiative to encourage and celebrate the many contributions that women have made to the senior living industry. Women hold nearly 70 percent of senior living management jobs, according to Argentum research, and we want to facilitate this leadership.”
Several Argentum initiatives have the goal of “professionalizing” the industry, the CEO said. “We plan to build on the foundation of our Senior Living IQ initiative, which we launched in 2018 to support the industry’s ongoing investment in quality through learning, collaboration and sharing of best practices and ideas,” he said.
Balda also pointed to the program through which assisted living executive directors can earn the certified director of assisted living, or CDAL, credential. The program is run by the independent, nonprofit Senior Living Certification Commission, formed by Argentum in 2015. Almost 900 people have enrolled in the program, with almost 500 CDAL credentials awarded and more than 80 senior living companies participating, he said.
Argentum also offers a senior living sales counselor certificate.
“We’re also looking at development of two elder abuse prevention certification programs to assist in educating managers and front-line caregivers on this sensitive but important topic,” Balda said.
In addition to educating providers, educating lawmakers and regulators about the services and opportunities provided by the industry is a centerpiece of Argentum’s public policy strategy, he said. “We also do this through our Advocacy Fund, which helps our state partners support and gain passage of meaningful laws encouraging an optimum environment and experience for senior living residents,” Balda added.
“We will continue to work closely with our state partners and to communicate on the federal level the importance of creating an environment benefiting older adults, their caregivers and other support staff,” the CEO said of the organization’s plans for the new year. “We expect to see active federal and state legislatures in 2019 and look forward to working with the 116th Congress, and state officials as well.”
Affordable housing, planning for future, Medicare Advantage also important
Workforce and leadership issues, as well as the demand for affordable housing, were tops on the radar of LeadingAge in 2018, President and CEO Katie Smith Sloan told McKnight’s Senior Living.
“Workforce issues, from finding and retaining staff to developing a career pathway for employees, is an overarching concern for senior living,” she said. “Our Center for Workforce Solutions, now in its second year, continues to evolve and grow as we incorporate the full range of our initiatives around this topic — from policy to member tools, training and education, career pathway development and workplace culture to research.”
Sloan called workforce issues a “rallying cry” at LeadingAge’s annual meeting in October and asked members to “help us figure out our moon shot on workforce.”
In 2019, the CEO said, “workforce and planning for the future will remain top of mind,” but “funding for affordable housing and helping our members with Medicare Advantage will also be priorities.”
“Every leader in senior living must anticipate and plan for the desires of future consumers and at the same time respond to the demands of today’s market,” Sloan said. “Older adults, in general, are moving to independent living or assisted living later, which often means that their needs are more complex; they require a variety of resources, including medical services. Consumers of the future may have a different set of expectations.”
Over the past year, LeadingAge has been working with its members to help them envision future scenarios and to help them understand what is coming legislatively, she said.
“Legislatively, in 2018 we had good news on the affordable housing front: for the first time in years, Congress provided funds for new construction,” Sloan said. “The need, however, is great, and continues to grow.”
Additional legislative priorities for LeadingAge in 2019, she said, include continuing to ensure that older adults living in assisted living communities are eligible for Medicaid coverage through home- and community-based waivers and state programs and watching how the CHRONIC (Creating High-Quality Results and Outcomes Necessary to Improve Chronic) Care Act provisions contained in the Bipartisan Budget Act of 2018 will be implemented related to MA plans offering coverage of “nonmedical” services as supplemental benefits.
“For our HCBS members, MA is a new payer source and requires that they contract with plans,” Sloan said. “To help, in late 2018 we introduced the Center for Managed Care Solutions & Innovations, which is a clearinghouse for information, resources, networking and assistance on all things managed care. LeadingAge will build it out in the months to come to ensure our members have the information and resources they need to succeed.”
The CEO also pointed to the organization’s Leadership Summit, set for March 17 to 20 in Washington, D.C., as a place for C-suite executives and their teams to delve into strategies for the future.
Net operating income gets squeezed via revenue and expenses
From the perspective of the National Investment Center for Seniors Housing & Care, which serves both capital seekers and capital providers through data and analytics, the big challenge for senior living operators in 2018 was a squeeze on net operating income from both the revenue and expense side, NIC President and CEO Brian Jurutka told McKnight’s Senior Living.
“On the revenue side, despite strong absorption, even stronger new supply put downward pressure on occupancy in many markets,” he said. “On the expense side, historic low unemployment rates helped drive higher labor costs, which make up about two-thirds of operating costs. These downward pressures on NOI are happening at a time when potential valuations are being pressured from higher interest rates.”
Opportunities exist in certain markets, however, Jurutka said. “By definition, some markets and properties have metrics above and below the average. The real value in transparency through data is being able to understand and explain why a market and/or property is above or below benchmark,” he said.
For 2019, Jurutka shared other organizational leaders’ view of labor shortages as a big challenge for the industry.
“I think most would agree that all indicators point to continued labor shortages for the entire spectrum of staff from front line staff to executive directors, which will mean increased competition for quality staff among new and existing communities,” he said.
Additionally, Jurutka said, the cost of capital could increase due to higher interest rates, “but there are certainly varying opinions on the movement of interest rates.”
NIC expects some operators to embrace value-based care more widely, he said. “We also expect to see continued changes in product to accommodate shifts in consumer demographics and preferences, recognizing these changes will likely occur gradually over the next 10 years or so,” he said.
NIC will release the results of its middle-market seniors housing study this spring, Jurutka announced at the organization’s annual conference in October.
Data on demographics, care needs, cognitive impairment, mobility issues and chronic conditions are being collected to help the industry decide how best to prepare for the future, executives said.
“The hope is that in 10 years or so, there will be new products that don’t exist today,” Jurutka said.