Brookdale Senior Living entered 2024 with a clear vision and an intense focus on recovering pre-pandemic occupancy and margins, which resulted in “meaningful positive outcomes” across its key strategic priorities, President and CEO Lucinda “Cindy” Baier said Wednesday during a first-quarter earnings call.
Resident fee revenue increased 4.3% compared with the first quarter of 2023 for the Brentwood, TN-based senior living operator. The increase was attributed to a 160 basis point increase in average occupancy to 77.9%, the 10th consecutive quarter of year-over-year occupancy growth, according to Chief Financial Officer Dawn Kussow.
Independent living segment occupancy was 79.6%, a 100-basis-point increase over the first quarter of 2023. Assisted living and memory care occupancy was 77.5%, a 160 basis point increase over the first quarter of 2023, and continuing care retirement / life plan community occupancy was 76.1%, a 270 basis point increase over the first quarter of 2023, according to a supplemental report.
Heading into the second quarter, Brookdale expects average occupancy to outperform normal seasonality and also expects to see continued benefit from ongoing year-over-year improvements related to staff retention and turnover.
Building on momentum from 2023, Brookdale achieved its highest operating income margin rate, 27.6%, since the beginning of the COVID-19 pandemic, the company reported.
In the first quarter, move-ins exceeded pre-pandemic levels by 7.5% but lagged behind first-quarter 2023 move-in levels. Kussow said that the company saw fewer financial move-outs compared with the prior year quarter due to continued supply-demand fundamentals and a lower Jan. 1 rate increase compared with last year.
As of March 31, Brookdale owned, leased and/or managed 652 communities in 41 states.
Workforce initiatives pay off
Operating under the philosophy of “If we take care of our associates, they, in turn, will take care of our residents,” Baier said that Brookdale experienced continued improvement in leadership retention — executive directors, health and wellness directors, and sales directors — and declining staff turnover. She said Brookdale’s trailing 12-month executive director retention rate reached 70% in the first quarter.
“Given the significant progress we’ve made over the last two years to stabilize our overall workforce, in 2024 we are refreshing our hourly training to be more engaging and personalized for our associates, while ensuring that we continue to provide high-quality care and maintain regulatory compliance,” Baier said.
Same-community labor expenses improved 150 basis points compared with the first quarter of 2023, and the company continued to reduce the use of contract labor and overtime, she said.
Healthcare services expanding
Baier pointed to external recognition of company achievements in the past few weeks, including recent recognition of Brookdale’s HealthPlus program as a 2024 Best of the Best winner for innovation, announced during Argentum’s 2024 Senior Living Executive Conference.
The Brookdale HealthPlus care coordination model has led to 78% fewer urgent care visits, 36% fewer hospitalizations and 63% higher annual wellness visit completion rate compared with individuals living in private homes, according to a corporate presentation.
Baier said that the company intends to continue to roll out the HealthPlus value-based care model — going from 50 communities currently to 130 communities by year-end — which she said provides a differentiated experience for residents.
“We think that Brookdale HealthPlus and adding healthcare into our communities is the right answer,” Baier said, adding, “We’re continuing to look to see what additional healthcare services could be provided by third parties within our communities.”
Baier said Brookdale also is focusing on the quality of the programs within its communities, including dining and nutrition, resident and social engagement, and relieving burdens of homeowners but is particularly focused on health and wellness.
Five members of Congress sent letters to Brookdale and two other long-term care operators on Sunday questioning their leaders’ claims that they cannot afford to meet the new federal nursing home staffing mandate, but Brookdale executives did not address the issue in their prepared remarks, and call participants did not ask them about it during the question-and-answer session that followed executives’ prepared remarks.
| Read: Brookdale finds itself in the midst of another federal inquiry, this time about skilled nursing |
