While senior living businesses across the country are thriving in many markets, the boom is yet to come, executives of multi-site providers say. And addressing that boom will be a challenge.
That was the message among CEOs who spoke during this year’s Senior Living Executive Course offered by the University of Southern California across its Leonard Davis School of Gerontology and Marshall School of Business.
Despite oversupply pressuring some areas, providers in many markets are thriving on the heels of a post-recession construction surge and occupancy uptick. But the amount of current demand is limited, according to some execs.
“In the Bay Area, Orange County, Los Angeles, San Diego… there is a very severe capacity constraint,” said Belmont Village Founder and CEO Patricia Will. “The baby boom has not come close to coming into the picture.”
The oldest baby boomers today are 71, while the average age of an assisted living resident is 85, according to the National Center for Health Statistics.
“Very small numbers of baby boom age are living with us today,” Will said.
National Investment Center for Seniors Housing and Care (NIC) CEO Bob Kramer noted the shift in population that is a handful of years away.
“[We saw] the historic low point for the growth rate of the 82- to 87-year-old population and that’s now turning positive,” he said. “It really starts to turn starting around 2020. We have that coupled with markets of oversupply. What we’re going to see with disruptive forces is greatly increased demand.”
Building for the Boom
Preparing for that boom will be a challenge for several reasons, panelists noted, in part stemming from rising resident acuity. These challenges include staffing to meet the needs of the population boom that has more health care needs than the resident of the past and creating physical buildings that are flexible enough to serve them in the future.
“There’s going to be a compression throughout the health care spectrum,” said Andy Kohlberg, president and CEO of Kisco Senior Living, noting the the need to appeal to a younger resident since move-in age will be increasing. “Assisted living [residents are] much frailer than they have been. Independent living is going to be bifurcated. You have to build and design a commmuity a younger resident is going to want to live in.”
Staffing for senior living presents yet another challenge, one the industry has predicted will peak with the need for around 1.2 million more caregivers by the year 2030.
“No one wakes up and says: ‘I’d like to live in a retirement community,’ or, ‘I’d like to work in one,’” Kohlberg said.
Both Kisco and Enlivant have had success in recruiting for leadership positions from major hotel operators such as Starwood and Ritz Carlton. But there is much more work to do in building the workforce necessary for such a demand boom.
“There are different ways to go about it,” said Jack Callison, CEO of Enlivant. “We’re spending time with colleges and universities, but need to get to high schools and community colleges. People don’t think of this as a career path. There’s still so much misinformation and misconception that applies to the workforce as well. They still think of us as nursing homes. But they walk into our communities and people are thriving and they are blown away by that.”
Written by Elizabeth Ecker