Guest article by Mike Kivov, Partner at OnePoint Partners
This article is a primer and supplement for our upcoming webinar, “Integrated Wellness and Prevention: Repositioning Life Plan Communities to Provide What Consumers Really Want,” on Thursday, August 5. Along with Mike and an esteemed panel, we’ll discuss how Life Plan Community providers must re-envision the historical continuum of care to stay relevant in the years ahead. Click here to register. We hope you’ll join us!
The long-term impacts of COVID-19 for the senior living field, and whether it has forever and dramatically altered the landscape of long-term care (assisted living, dementia care, and nursing care), is still unknown. Will long-term care recover, and if so to what levels and over what time frame? While getting past the depths of the pandemic certainly will help with any recovery, the past year has accelerated some trends that already were impacting long-term care, and which create increased uncertainty about the future.
As a result, what we can say with some certainty is that we are in a transformative period for long-term care as a whole over the next few years. It is entirely possible that lasting changes in consumer behavior have been put into motion. As a field, we need to be planning as if this is the case, and get to work on figuring out the new models that will need to emerge, and how they will look and function within the overall continuum.
Many nursing care units have suffered substantial drops in census. But this isn’t new. Nursing home occupancy has been on the decline—even as the total number of licensed beds has decreased—for the better part of two decades. Private pay market share had been eroding for years, and prior to COVID-19 many nursing facilities were losing market share on Medicare rehab as well. More rehab needs are being met successfully in alternative settings, in particular at home, and it seems likely that this trend is poised to grow in the aftermath of COVID-19. So as a provider, how many nursing beds do you even want or need? Rightsizing was critical prior to the pandemic; going forward, it will be even more essential to surviving and thriving as the customer base continues to shift and utilization further wanes.
Smaller assisted living components that are part of communities with continuums of care, and thus where admissions are driven by internal matriculation, certainly are better insulated from the current challenges of the market. But the approach to assisted living within the continuum has already been in flux for years. The ability to provide the care and services is still very much a core component of the modern continuum, but are the “bricks and mortar?”
Some communities have experienced great success by moving past the physical space and utilizing at-home platforms to meet the assisted living need. (As we say, “Assisted living is a service, not a place!”) At the same time, other communities have shifted their physical approach for assisted living to become higher acuity, converting nursing beds to assisted living as they downsize nursing. This creates new assisted living, but in a different acuity paradigm. Given these concurrent trends, one could argue that traditional assisted living the way we knew it has been disappearing for years as it increasingly becomes either at-home focused or shifts upwards in acuity to meet even higher and more complex care needs.
Perhaps an even more sobering question for assisted living is, “With occupancy so far down across the product nationally, are we facing a period over the next few years that will be more competitive than ever as all these communities (and so many large operators) need to refill beds?” Refilling existing beds will have a similar impact as the mass introduction of new inventory to the market, all in “lease up” mode. Is it realistic to continue to survive (let alone thrive) in this acutely competitive environment going forward, and to do so with the same model that you and others have been using for years? Assisted living is at a crossroads.
For dementia care, the impacts in recent months have been more of a mixed bag, and the future outlook appears different from assisted living. In many cases, high-quality specialized programs and environments have proven to be much more insulated from the pandemic. Simply put, the alternatives to stay home and receive equivalent care and outcomes do not exist, and the strain on the family unit is too great. Move-ins are still happening. Dementia care seems to have been far less disrupted than assisted living and skilled nursing. Looking to the future, while overbuilding and temporary saturation in a given market certainly is a risk, the model as we know it today does not appear on the precipice of collapse and in need of a transformative evolution. At least not with high-quality programs and environments, and at least not yet.
A Case Study
A strong continuing care provider we know exemplifies the dilemmas facing our field. It is known for its five-star quality of care in its 59-bed nursing facility, which includes a specialized dementia care unit and serves a blend of LifeCare, Medicare and private-pay direct admits. It does not provide a physical assisted living space, rather utilizing a robust at-home care platform to meet this need—and even higher acuity needs—within independent living residences. A few years ago, this community opened a dynamic household model assisted living-based dementia care component. In March of 2020, it ran at 85% occupancy in nursing, even with strong utilization of its at-home program keeping some residents out of nursing, and comfortably over 90% occupancy in independent living and its new dementia care. The model seemed to be well-positioned and on relatively solid footing. Since then, the turnover in its nursing care has been intense, and despite the gold-standard reputation, the new admissions simply are not coming, either through internal matriculation or direct from the market. A year later, independent living remains at 90%+ occupancy, the dementia care households are 90%+ occupied, and the nursing home is languishing with occupancy around 60%. Looking in the mirror with a discerning and honest eye, the plan of recovery for this community does not simply include strategies to improve census, but more importantly re-envisioning alternative uses for beds and space within its nursing center.
In closing, we have to admit that the future is not certain, and we don’t know what will happen and how it all will play out. But one thing is certain: evolution is going to need to happen. Every community will have to carefully examine its position to develop a strategy for success. How will care and service delivery function in the future? Where and how will bricks and mortar be blended with at-home and other alternative deliveries? Just how many beds, and of what types, will be needed? As a field, with more urgency than ever, we need to be figuring out these challenges and creating the models that are better positioned for tomorrow.
For more articles covering senior housing trends and how providers must adapt to them to continue fulfilling their missions, click here.
To join us, alongside Mike Kivov, for our next webinar, “Integrated Wellness and Prevention: Repositioning Life Plan Communities to Provide What Consumers Really Want,” click here. We hope to see you on August 5!