Labor costs driving up resident fees: survey
Labor costs are the primary driver for monthly fee increases charged to residents of not-for-profit senior living communities, according to a new poll by speciality investment bank Ziegler.
Such costs were by far the most common reason cited by chief financial officers responding to Ziegler's CFO Hotline poll for October, mentioned by 155 of 190 participants as being responsible for increases this year as well as increases planned for next year. By contrast, healthcare benefit costs were mentioned by 28 respondents; inflation, 23; and food costs, 21. Amenities and programming also were cited as reasons for monthly fee increases.
The average percentage increase in 2016 was approximately 3.1%, according to Ziegler. Eight CFOs reported that their organizations had instituted monthly fee increases of less than 2%, eight reported increases of 4.9% or more, and two CFOs reported no increases. The highest increase reported was 5.5%.
By contract type, monthly fee increases ranged from 2.9% at organizations with rental contracts to 3.28% at organizations with Type C (fee-for-service) contracts.