Yes, there are some significant challenges to address. Some of the likely headwinds and trends for 2019 will be:

  1. Increased unit turnover / move-outs due to an increase in older, high-acuity residents.
    • Likely lower net stabilized occupancy — in the 85% range.
  2. Incorrectly estimating age and income qualified leads. Truly qualified leads for a community’s primary market area typically need to be:
    • Age 70 to 75+
    • Income screen: $60,000 to $75,000+
  3. Higher-acuity residents in the future will change the characteristics of living unit demand mix:
    • Moderate demand for independent living that offers increased supporting assistance in living services.
    • Increase in demand for assisted living and memory care units.
    Exercising caution that . . .
    • Future supply of these units possibly could exceed market demand.

These emerging headwinds are driving a relative new senior living and health care trend. The fancy word for this is “disruption.” This means that we may need to change the way we think from three major perspectives:

  1. Introduction of new, state-of-the-art designs in a market could threaten the acceptance of existing, older properties.
  2. Overall operations must be sharpened to enhance the fundamental business of the senior living and health care industries.
  3. Residence care and life satisfaction.

Regardless of these 2019 headwind trends resulting from emerging new technology and disruptions, one strategy for optimum profitability and success will always require a continuing 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 48 years. He has authored five books about senior living and healthcare, including Assisted Living Strategies for Changing Markets and Independent Living and CCRCs. He has published senior living monthly columns for the past 28 years. Jim Moore can be reached at (817) 731-4266 or jimmoore@m-d-s.com.