Operating non-profit senior living grows more complex by the year. Accordingly, providers in that space are becoming more interested in satellite locations, wrestling with how many skilled nursing beds they should have and struggling with staffing issues.
But they are optimistic on the whole. That was the core takeaway from the 2017 Ziegler Annual Senior Living Finance + Strategy Conference, which recently wrapped up in Colorado Springs, Colorado, according to Lisa McCracken, Ziegler’s senior vice president of senior living research and development.
“We had a record year, about 30% higher [attendance] than last year,” McCracken told Senior Housing News. “I think the numbers reflect the energy and interest in leadership teams advancing the ball on a couple fronts.”
Satellite locations gaining steam
Though some for-profit providers continue to struggle with occupancy in markets across the U.S., non-profit providers have a rosier forecast that allows them to focus more on growth initiatives, either through new development or consolidation.
“There was a lot of energy and excitement about moving forward in terms of growing organizations,” McCracken said.
Of those that choose development, not all are taking the traditional route of adding rooms or buildings, McCracken said. More continuing care retirement community (CCRC) operators are opening satellite locations, for example.
One emerging trend among providers is opening a satellite location that only offers one or two steps along the care continuum, such as a standalone assisted living community. These satellite locations tend to be smaller, offer fewer amenities and usually rely on a larger main campus for leadership and governance.
“We’re tracking 40 or so not-for-profit locations that we know of that are not full-continuum,” McCracken said. “Ten years ago, there wasn’t as much conversation about these non-full-continuum CCRCs.”
Providers ‘wrestling’ with post-acute
Many not-for-profit senior living providers are struggling with how many skilled nursing patients they house—or whether they should house them at all.
More than 27% of not-for-profit providers are considering or planning a reduction in the number of skilled nursing beds they have onsite, according to the latest Ziegler CFO Hotline report.
“That’s a big deal,” McCracken said of the latest numbers. “There are absolutely providers that are really wrestling with it.”
In some parts of the country where the post-acute market is more cutthroat, such as the West Coast, non-profit providers are even doing away with skilled nursing beds entirely.
“Not-for-profit providers are feeling the pinch if they’re heavy on the post acute side, but it really depends on the community,” McCracken said. “It’s a tough decision. Once you give those beds up, you can’t get them back.”
Across the country, many CCRCs are downsizing their skilled nursing wings and focusing on more profitable assisted and independent living wings.
Stuck on staffing
Staffing, recruiting and retention remains a top issue for non-profit senior living providers.
Of those surveyed in the Ziegler CFO Hotline report, 33% saw labor cost pressure as the greatest financial challenge to the industry.
“If you can’t grow because you can’t staff, that’s a problem,” McCracken said. “Everybody’s aware of that and knows we need to differentiate.”
Some possible solutions discussed at the conference included boosting compensation for workers, placing an emphasis on employee satisfaction and providing transportation for employees who need to live in less expensive areas that are farther from where they work, she added.
Written by Tim Regan