Incoming Trilogy CEO: Our Senior Living Strategy Drives Success in Hot Markets

The incoming CEO of Trilogy Health Services intends to keep expanding the company’s private-pay senior living portfolio, but in a conservative manner that she believes gives the provider an edge in highly competitive markets.

The Louisville, Kentucky-based company is already in the process of rebalancing its unit mix to include more independent living and memory care services, according to Leigh Ann Barney, who was tapped this month to replace CEO Randall Bufford on Oct. 1.

The reasoning behind Trilogy’s senior living expansion is twofold: recent reimbursement changes for the skilled nursing industry have made doing business harder in that sector, while the senior living market is likely on the cusp of a rapid demand growth.


Trilogy — which is jointly owned by Griffin American Healthcare REIT III and NorthStar Healthcare Income — was the 29th-largest senior living provider in the United States in 2018, according to rankings compiled by industry association Argentum. Overall, the company has a portfolio that includes 114 communities spread across Indiana, Kentucky, Ohio and Michigan.

Senior Housing News caught up with Barney to talk about her priorities in the new role, and where she sees opportunities to make headway in the private-pay senior living market.

What are your first priorities coming into the CEO role?


My top priority would be to continue building on the success that we’ve already experienced in our customer and employee satisfaction. Those are two of our top core pillars at Trilogy. Our metrics in both of those areas have never been better than they are today.

We don’t want to slip backwards with the leadership transition, but rather to continue to improve in both the customer and the employee experience.

Secondly, we do have a sizable skilled nursing portfolio, so I would say the second thing in the short-term is successfully managing through the PDPM [patient-driven payment model] transition that’s coming later this year. That’s top of mind.

You’ve been COO since 2013, and you’ve been with Trilogy now for around 19 years. How much of a learning curve do you expect with the CEO role?

Being that I have been here for 19 years and worked under Randy’s direct leadership the majority of that time, we feel pretty confident about transitioning internally and externally. Our employee base knows me fairly well. Where Randy had been the face of the organization, I think I’m a nice second face of the business.

I have had a lot of involvement with the external constituents, such as our banks and others that we deal with outside of the organization. I did start in the company in the financial area, as a treasurer of the business, so I have the financial background.

Where do you see some of the biggest opportunities in the private-pay senior living space right now?

Senior housing has been an expansion area for Trilogy. As I noted, we have a larger skilled portfolio, but that’s slowly been evolving. In the last 10 years, we’ve reduced our mix of skilled nursing versus senior housing by about 12%. So, that’s a focus area for us, to continue to add on to our existing campuses.

What you see in our facilities is, we have a little bit of everything. We have a medium-sized skilled unit, a small AL unit, and then possibly a small independent living unit. It’s not large in any area, but it creates a nice campus complement and that’s been an area of growth.

Early on in our journey, we were focused on skilled and assisted living. The memory care and independent living has been our focus in the last 10 years for growth. We see it as a nice complement, having all of those services on a campus. But we also don’t put all of our eggs in one basket, and it works well for our operations.

Does this mean you might develop memory care or independent living at one of your existing skilled nursing facilities? Or are you only focusing on this in new development projects?

Actually, both. In some of our newer developments, we have been adding independent living. Our newest model has a second-floor independent living component.

But we also look at our existing markets where we didn’t place memory care or independent living when it was originally built, and if we determine there’s a market need, we go back and add on to those campuses.

We’re not a company that’s been big in acquisitions, we’re mostly a development company. But we have made acquisitions over the years, and in those instances, we look to make sure the property will accommodate our ability to add those additional services.

What about the biggest challenges?

I think excess inventory in some of our markets has been one of the headwinds in the business. It’s not everywhere. At Trilogy, we were originally very much focused on rural communities. But as we’ve grown over the years more into urban markets like Louisville or Indianapolis, there is a lot more inventory and it’s been rising in the last several years.

We’ve continued to build our business model where we have these different compartments, but none are so large that we’re trying to fill a 300-unit independent living. We’re trying to fill 20-30 independent living units, with maybe 30-40 assisted living.

I think that gives us a nice edge in the market because, one, we have the continuum of care, and two, we just don’t have as much inventory that we’re trying to fill in the senior housing market in any given area.

What are Trilogy’s growth plans right now?

We have always been a development company, and we’re pretty boring in our development growth. I would say we have a steady, consistent four to six new facilities per year. We complement that with the added service line growth that we are doing, where we’re going back and adding on.

So, our pipeline is fairly well set for the next couple of years. Today, what we’re looking at is two to three years out from now. We have a great development team that looks at all of our markets. We have a very defined strategy of the states we want to operate in, being in the Midwest, being in clustered markets. Those are all advantages to us.

So, I would expect us to stay consistent with how we’ve grown in the past.

How are you thinking about the senior living side of the business versus the skilled nursing side of the business?

Early in our development process, when Randy started the company many years ago, our skilled units were heavy with semi-private beds. And that’s just not the market today.

People want private rooms. So, we’ve downsized our skilled units to have more private rooms, and then with that, we’ve added on the standalone memory cares and independent living that add back revenue that’s not government regulated. So, with the economy, you have to roll with that, but we don’t have the government regulations and pressures of reimbursement.

I know Trilogy puts a focus on workforce development. How do you attract and retain the best workers, especially in the middle of a labor crunch?

We start by making sure our wages are at market, and we feel they are. Philosophically, we’ve chosen to invest in our employees in a number of ways, mainly educational and workfroce development.

We’ve had a foundation for a number of years that raises money for scholarships for employees, so we can grow them into higher-level nursing positions, or any department.

We also have an apprenticeship program. We’re investing in our caregivers and culinary staff. They complete online courses on a self-study program and when they complete them, they receive national certification and a raise. Our thought behind that is, we’re helping them grow, paying them more money, and then we’ll retain them and lower our turnover.

And then recently we announced a partnership with Purdue Global to offer free online education through their program to all of our employees.

So, investing in education is how we’re looking to attract and retain employees.

Another part of that is we’ve worked very hard to partner with not just colleges, but high schools. There’s not enough talent out there to meet the needs of the market, so we feel that one of the best ways to go about that is to start growing our own people at a younger age. We bring them into long-term care, teach them about what kind of careers are available, and show them educational opportunities we have that will help them grow a long-term career with us.

With oversupply still an issue in some of your markets, is Trilogy seeing any pressures on the pricing side for its senior living communities?

From a pricing standpoint, we’ve never tried to be at the highest price point in a market. We’ve been competitive in our pricing. We’re not necessarily seeing that pricing pressure.

The way we try to combat any pricing or inventory issues is through our services. We focus very extensively on our hospitality model for services. That includes investments in dining, life enrichment, memory care. We want to be the number one provider in each of our markets, and we feel that will drive consumer demand toward us.

What’s your take on technology in senior living and how will you prioritize it as CEO?

Not being flashy in our markets and our growth, we’ve tended to dip our toe in the water on technology over the years. We’ve piloted several programs and different products related to incontinence or personal monitoring.

We’re doing a pilot with a telehealth program. So, we like to really look at things and we’ve found things that worked for us, and we’ve found things that didn’t add value.

If we feel it adds value to our resident or our employee experience, we can justify the investment. But if we don’t, we move on and look to the next thing.

We’re seeing some providers strike partnerships with hospitals, health systems and insurers to lower costs and boost quality. Does Trilogy plan to grow or change how it plays in that space?

We’re still at a look-and-see approach. I think we have great relationships with our hospitals in the markets where we operate. We don’t have much in the way of formal partnerships, but we would be open to it if it made sense for both parties.

Our focus has been more on the clinical quality outcomes and the customer service experience. We feel that drives consumer demand to us as the provider of choice in the market. Even without having a partnership, we still see consumers that want to come into a Trilogy building because they know it represents quality and excellent customer service.

For some companies, hospital and health system partnerships is a way to source new residents. On that topic, what’s Trilogy’s strategy for driving referrals?

Historically, that is mainly what drove our business, those hospital relationships. And while it’s still a very large component, direct consumer marketing has become a much bigger piece of our business.

I think consumers today, with the internet, are much more savvy. They’re looking into their health care much more on what services are offered, Google reviews, that kind of thing. Launching digital marketing a couple years ago has been an add to us. We’re spending a lot more from a digital standpoint than we do in any print media.

What about different payment options for senior living, such as Medicare Advantage? Any plans to play in that space?

We’re not doing any of that at this time. We are involved with Medicare Advantage plans for our skilled portion of the business, but it’s still a fairly small of our overall health center revenue. So, we haven’t done any of that on our senior housing side.

More generally, what’s your leadership style?

At Trilogy, we have spent our time developing a culture of servant leadership. We read a lot, we study, we train our leaders on the field on it. So, I was influenced tremendously by those principles, and I try to lead with that approach.

Secondly, having that financial background, I use analytics and metrics extensively in how I review the business and look at things. It’s great sometimes to have a gut feeling but I like it even more when I can back it up with the numbers that show that’s the right direction.

This interview was edited for length and clarity.

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