Senior Housing Crystal Ball: Top Execs’ 2018 Predictions

Now that 2017 has officially come to a close, the senior housing industry is looking ahead to what 2018 may bring.

Here’s what some top industry executives are predicting when it comes to staffing, regulations, resident preferences and more in the new year:

Chris Winkle, CEO of Sunrise Senior Living: “2018 will bring continued opportunities to provide residents and families with comprehensive, coordinated care in ways that anticipate their needs for both today and tomorrow. An ongoing focus on helping to promote seniors’ overall wellness will lead to positive health outcomes and customer satisfaction.”

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Brenda Bacon, President and CEO of Brandywine Senior Living: “The change in the expectations of our residents, families and team members will continue to challenge our industry to focus on customer service and customized experiences. No more doing the same thing next year as you did five years ago. The physical design of the next-gen buildings will be different and the demand for hospitality services will continue to grow. Both innovation and sophisticated management will be the fundamental requirements for success.”

Andy Smith, President and CEO of Brookdale Senior Living: “In 2018, senior living companies will have to focus even more on the people who work for them. Demand for talented, dedicated employees keeps growing. We are in an environment where new jobs are being created and unemployment rates are dropping, so companies will have to step up to improve and communicate about the employee value proposition they offer. This employee value proposition is not just about the job, the wages or the benefits, but also about the culture, growth opportunities and the leadership offered.”

Mary Leary, President and CEO of Mather LifeWays: “I think we’ll continue to see a change in buyer behavior, both in how they make purchases, and the relationships we create with them. There will be more self-education through online research and doing more ‘homework’ before they contact us. The small home trend has also reached the senior housing market with an emphasis on experience and what a community provides in terms of things to do, versus size of homes or living space.

The industry is nearing a true ‘disruption.’ So-called ‘old school’ services and programs will not be enough for future residents, who will very likely have a more holistic or organic approach to their next chapter. Continuing education and volunteerism—including ways for residents to contribute to and interact with the larger community—will be important, and a more diverse population will also require a wider variety of offerings. More self-determination of programs and services for greater enrichment will be the norm.”

Sean Kelly, President and CEO of The Kendal Corporation: “Here and now, contracts, programming, quality in every aspect of care and service, and price, matter a lot. Conspicuous as these drivers may be, for the future our work can’t ever lose sight of the importance of quality in all its forms. The market will be ever more discerning in a world that is increasingly complex and competitive. Our ability to deliver what the market will require will lead us to establish deeper partnerships with hospital systems, institutions of higher learning and community organizations. We will need to be accessible and useful to older people who live in our communities, as well as those who want to stay in their own homes. Going forward, strength lies in an authentic organizational culture and a demonstrated ability to foster communities, on or off of a campus, where residents and staff are engaged in meaningful ways with one another and the wider world. Enduring resident and staff satisfaction will be essential.”

Collette Valentine-Gray, CEO and COO of Integral Senior Living: “We will continue to see our average age higher than in years past as residents are waiting longer to move into an assisted living community. As a result, we will see a higher acuity resident moving into the assisted living setting. They will want multiple dining venue options as well as parallel activity programming offering more choices. From an associate perspective, as minimum wage increases continue to grow, this will impact the search for talent into our industry as we are competing with other industries for like associates.”

Doug Leidig, President and CEO of Asbury Communities: “I think there is going to be a greater emphasis on collaboration than ever before, including an increase in collaboration among ‘competitors’ in our market space. Continuing care retirement communities (CCRCs) will look to join together to offer services both on their campuses and outside the walls to reduce duplication of services, create efficiencies and increase market share, and I expect much more actual collaboration activity between hospitals and CCRCs versus just talking about it. In addition, we’ll see greater stress on occupancy levels in skilled nursing facilities (SNFs) as older adults move from hospital to home, increasingly bypassing traditional short-term stays and causing more SNFs to reinvent themselves as specialty care units. At the same time, we must be mindful of the evolution of both our workforce and governance structure. Companies will offer creative adjustments and changes in benefits to attract a new workforce, while Board leadership will continue to progress to assure appropriate oversight of the organization in today’s increased regulatory environment, focusing on the strategic direction of companies and the demand on their financial resources.”

Patricia Will, President and CEO of Belmont Village Senior Living: “Despite continued headwinds due to increased supply and increased payroll costs, we are very bullish on our portfolio.  Our latest Bay Area opening has had stellar results; our stable portfolio has enjoyed terrific year-over-year growth. We expect that this will continue in 2018.”

David N. Barnes, President and CEO of Watermark Retirement Communities: “In 2018 and beyond, successful operators and managers will be sought by investors, spurring growth and expansion. This will create an even greater reliance on technology to communicate and operate smoothly and efficiently. One of the biggest challenges Watermark faces as it continues to grow, is maintaining a strong culture and delivery on our vision of creating extraordinary and innovative communities where people thrive. To that end, Watermark is launching a new technology platform called the Vision Center within our intranet, WatermarkConnect. Every associate will be able to better understand the Vision and the Operating Principles through videos and photos and to learn how to help their individual community bring the vision to life. We foresee a growing need for interactive technology such as the Vision Center to assist in keeping associates engaged and inspired.”

Lynne Katzmann, Founder and President and CEO of Juniper Communities: “2018 is likely to be a busy year of continued change and evolution in our industry. The new tax legislation may impact home values particularly in states and locales with high property taxes which in turn will depress housing prices for those looking to sell prior to moving into senior housing. Perhaps more importantly, the new bill will decrease federal revenues and put pressure on entitlement programs that some of us rely on for revenues.

Given the tightening of immigration laws, I also see continued pressure on labor. The move to increase home care as a post acute option also means that with their expansion there will be more competition for the same employees. Recently we heard that changes to overtime rules are likely to be revived and these too will impact us.

Technology will continue to change the way we do business, whether it is related to our internal operations, ability to communicate with different stakeholders or fuel the way we learn about individuals by monitoring their everyday activities with smart devices that soon are likely to be everywhere!

The value of a strong corporate culture will grow in importance as new development and competition forces us to differentiate ourselves. At Juniper, our culture is embedded in both word and deed and after many years, the positive and strong culture helps us recruit new team members more easily, hopefully retain them but equally important is what it means to our prospective and existing residents and their families. Our largest source of move-ins: friends and family referrals!

2018 will also see a greater shift in segmentation of the market we serve. In general, we are seeing people move in older and with greater needs. There are many companies seeking to attract younger cohorts and building environments and development engaging programs to do so. I think that we will see active recruitment and product differentiation for the 79- to 82-year-olds with a focus on couples and also on 82- to 85-year-olds.

But most important in 2018 will be the continued shift of health care into value-based care. Depending on who you read, within the next couple of years, a great majority, or 60-75% of Medicare beneficiaries, are likely to be members of a Managed Care plan. In my mind, seniors housing has great opportunity as a result. The work Juniper has done shows that what we do—provide enriched housing with services, particularly when coupled with the security of on-site chronic care management—reduces use of high cost acute services (hospitalizations) and hence keeps people healthier longer and for the government means great Medicare savings. In 2018, I believe that more providers will see that moving to a program that provides this foundation of medical care will benefit them in the short run by increasing length of stay and increasing care charges. But here’s the real win: We can share in some of the savings that today are accruing to Medicare. Seniors housing with services can  provide services under a managed care offering and share in some of the savings. Like Sunrise has done, we also can also sponsor a health plan. While the latter assumes we take risk for all of the services a member uses, if done right, we can offer extra services to attract people to our communities and share in the profits of the plan. Moreover, as managed care is a standalone business with value, it also offers a new avenue for increasing profits and hence, enterprise value.”

Written by Mary Kate Nelson

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