Brookdale Senior Living’s leader said Wednesday she is confident in the company’s priorities in the face of growing scrutiny of the industry by the lay media and policymakers.
During the Brentwood, TN-based company’s fourth-quarter and full-year 2023 earnings call, President and CEO Lucinda “Cindy” Baier said that Brookdale has cooperated with requests for information from the US Senate Special Committee on Aging about its assisted living business for what the committee’s chairman has called “the most significant congressional review of assisted living facilities in 20 years.”
“We’re an advocate for seniors, and we’re willing to partner with others to serve the best interests of residents and promote assisted living in the industry. We take great pride in serving our hundreds of thousands of residents at communities across the county over the last decade,” she said. “At this point, it’s too soon to tell what the outcome of the inquiry could be, but I’m very comfortable our focus is and has always been providing quality care.”
“At this point, it’s too soon to tell what the outcome of the inquiry could be, but I’m very comfortable our focus is and has always been providing quality care.”
Brookdale Senior Living President and CEO Cindy Baier
Baier said that Brookdale has responded to a January request from the committee’s chairman, Sen. Bob Casey (D-PA), for information and documents detailing how it communicates the cost of services to residents and their families, the rates it charges in each state, its schedules of services and costs, the average revenue per occupied unit it receives, statistics on elopement and injuries, how accessible information is about community complaints and citations, staffing levels, and employee job titles and pay rates. Casey also requested the same information from Atria Senior Living and Sunrise Senior Living.
Baier pointed out to investors and analysts on the earnings call that Brookdale, the country’s largest senior living company, has had more assisted living and memory care communities recognized in the US News & World Report Best Senior Living program ratings than any other provider for two consecutive years. The organization also ranked first in customer satisfaction ratings in the 2020 and 2022 J.D. Power US Senior Living Satisfaction Study for assisted living and memory care, she said.
“The health and well-being of our residents has always been our top priority, and we are dedicated to providing high-quality care and services to residents and their families,” she said. “As a company, we’re honored to enrich the lives of hundreds of thousands of seniors over the last decade, and our communities have been recognized as some of the best in the nation.”
Assisted living providers have come under scrutiny recently after articles in The Washington Post in December, as well as in The New York Times and KFF Health News in November, reporting on the deaths of residents with dementia who eloped from communities, the industry pricing structure, rate increases or the for-profit status of most providers.
Those stories prompted an Aging Committee hearing in January at which some senators pondered increased federal involvement and called for a government study into how much federal money is spent on assisted living communities, the cost of assisted living services, and the transparency and availability of that information to consumers. The committee also asked consumers to share their bills and experiences interacting with providers.
Pandemic recovery continues
Also on Wednesday’s earnings call, Baier said that although complete recovery from the COVID-19 pandemic still remains ahead, Brookdale built a solid foundation in 2023 that “paved the way for sustained growth.”
The leader said the year had been “pivotal in refining our operations to favorably impact our performance.” And as the company looks to 2024, Baier said, the expectations are simple: “stay the course.”
Leadership, employee changes yield positive results
Brookdale achieved “meaningful progress” on leadership retention and employee turnover last year by remaining focused on its key strategic priorities, she said
The company had begun 2023 needing to rebuild its senior leadership team, changes Baier said were difficult but necessary to foster a culture of excellence and streamline decision-making. Brookdale also made changes to its executive director roles to emphasize a stronger growth mindset, combining mission and margin and underscoring strong business acumen, she said, adding that by year-end, the changes began yielding “noticeable positive improvements” at the senior living community level.
Brookdale also introduced new training for community and field leaders to provide alignment across core corporate priorities and to try to support operational excellence to enhance the business and overall resident and family satisfaction, Baier said.
Those changes, she added, resulted in year-over-year retention rates for community leadership roles increasing 190 basis points in the third quarter, with full-time, hourly employee turnover improving by 910 basis points from the fourth quarter of 2022.
HealthPlus expansion planned
The expansion of the Brookdale HealthPlus value-based care coordination program also demonstrated “remarkable success” in improving resident health outcomes, the CEO said. The program has resulted in 78% fewer urgent care visits and 36% fewer hospitalizations among residents within the communities that implemented the program, underscoring the effectiveness of its proactive care measures, Baier said.
Plans already are underway to expand the program, with an expectation that it will be in almost 130 senior living communities by the end of the year. Baier called the program an “attractive value proposition for residents” that helps the company increase resident length of stay.
Financial performance contributes to growth
Brookdale reported its ninth consecutive quarter of year-over-year occupancy growth in the fourth quarter, with a sequential 80 basis point increase compared with the third quarter.
Full-year same community average occupancy grew 190 basis points over the prior year, to 78.4%. Brookdale said the occupancy increase reflects the effects of the company’s execution on key initiatives to rebuild occupancy lost during the COVID-19 pandemic.
Full year 2023 occupancy was 77.2%, and fourth-quarter occupancy was 78.4%, a 130 basis point increase over the fourth quarter of 2022 and 180 basis points above full-year 2022 occupancy. January weighted average occupancy was 78%, a 140 basis point increase over January 2022.
Executive Vice President and Chief Financial Officer Dawn Kussow said the company saw its ninth consecutive quarter of year-over-year adjusted operating income growth. A same-community fourth-quarter adjusted operating margin of 26.3% was the highest reported margin rate since the initial impact of the pandemic, she added.
