Like many other senior housing and care nonprofits, St. Ann’s Community has a long and successful track record, but the organization has been making some big moves to keep pace with a rapidly changing operating environment.
Michael McRae joined St. Ann’s a decade ago and became CEO five years ago. In that time, St. Ann’s has pursued multiple initiatives to retain and further burnish its reputation as a market leader in the Rochester, New York area, where the nonprofit serves about 3,000 seniors each year across a variety of settings.
For example, the company hired a chief information officer, who replaced a system of spreadsheets with a robust digital application to support operations; with a few swipes, McRae can now pull up continuously updated occupancy and other data on his phone.
And, following a larger trend within the senior care industry, St. Ann’s is paring back on its skilled nursing beds in favor of independent living, assisted living, memory care and other services, McRae told Senior Housing News.
Meanwhile, the provider is building up its in-house medical workforce of physicians, nurse practitioners and physician assistants to create three-person clinical care teams for its residents and patients. This is already resulting in more coordinated care and fewer hospitalizations, McRae said.
But St. Ann’s is also going down more unique avenues in its efforts to innovate for the future while meeting current challenges, including bringing its adult day services to a former Ruby Tuesday’s as part of a mall redevelopment project, and offering workforce perks such as subsidizing tuition and providing diapers on the cheap for parents on its payroll.
An ideal location
St. Ann’s was founded in 1873, but the modern history of the organization dates back to 1962, when St. Ann’s Home was established in Irondequoit, New York — a community immediately to the north of Rochester, on the shore of Lake Ontario.
St. Ann’s Home was and is a large skilled nursing facility (SNF), currently numbering about 470 beds. With another SNF in nearby Webster, New York, St. Ann’s in total has about 530 licensed skilled beds today.
However, this number is down from about 600 just a few years ago, and further shifting away from skilled nursing is a priority, McRae told SHN. This is due to large-scale health care trends, including that hospitals and health systems have financial incentives to avoid sending patients to SNFs for post-acute care, and Medicaid rates are paltry. In the case of St. Ann’s, the organization loses about $70 per Medicaid bed per day.
That translates to yearly Medicaid losses in the high seven-digits, McRae said.
In 2005, St. Ann’s added its Cherry Ridge campus in Webster, which includes cottage homes, independent living and assisted living, and the organization also offers IL at two other locations. One of them, in the town of LeRoy, New York, was acquired in April 2019.
Ultimately, McRae envisions a balance of about 60% senior housing to 40% skilled nursing. But, other types of services are also becoming more important to St. Ann’s, including adult day services. Currently, St. Ann’s serves about 125 people each day in its two adult day locations, where it had reached capacity.
To increase its adult day population, St. Ann’s decided on an unconventional approach that could become much more commonplace for senior living providers in the year ahead. Namely, it is on track to convert 11,000 square feet of a former Ruby Tuesday’s restaurant at the vacant Sky View on the Ridge mall in Irondequoit.
“There will be no salad bar,” McRae joked to SHN.
The redevelopment effort is being led by an Irondequoit local who owns a nearby car dealership, and he has managed to secure financial backing and attract a number of other potential tenants — including affordable senior housing from Pathstone Corporation and a senior center from the town of Irondequoit.
“What’s so ideal about this location is that it has its own private entrance from outside, so if we want to run programming during off hours, weekends, midnights, we can, but it also has an entrance coming in from the mall,” McRae said, noting that the mall entrance will provide easy access for those in the affordable housing and using the senior center.
St. Ann’s has already signed a lease and provided specifications to meet regulatory compliance, and McRae anticipates moving in around this time in 2020.
This project could make St. Ann’s an early mover on a larger industry trend. Given that malls around the country have fallen on hard times as retail has migrated online, this real estate is ripe for conversion, and some other projects already are underway. Meanwhile, adult day services are being targeted as a growth area for some senior living providers who are looking to diversify their revenue streams and serve a more middle-market consumer.
Multi-dimensional workforce challenge
Like many other senior living CEOs, McRae sees labor as the paramount challenge.
“I sleep well at night, until this latest workforce shortage — I’m losing a lot of sleep,” he said.
It’s not only the severity but the complexity of the issue that makes him worried.
“We have many competing priorities,” he said. “We have a changing workforce, we have an aging workforce, we have compensation issues, we have reimbursement issues, we have quality of life issues … We have individuals that struggle in their personal life and find it difficult to hold down a full-time job … The talent pool out there is challenging.”
To address some of these challenges, St. Ann’s Community relies on employee engagement surveys. Through this process, the provider zeroed in on young, single mothers as a worker segment of significant size and in need of help in making their budgets work.
St. Ann’s leadership recognized one small but potentially meaningful way of providing assistance. The organization could purchase diapers in bulk for a much lower price than its workers pay at retail stores. About a year ago, St. Ann’s began providing one pack of diapers per child per month to its workers for a nominal price of around $3.
“It may not seem like a big deal, but a pack of diapers is $40, $45, $50,” McRae said. “That’s real cash coming out of their wallet.”
He doubts that the diapers alone would meaningfully boost retention, but it’s a perk meant to reinforce that St. Ann’s views its workers as family, he said.
St. Ann’s also is seeking to support some of its workers who have older children. For any full-time or part-time registered nurse or licensed practical nurse on its payroll, St. Ann’s is offering to subsidize their children’s education in the greater Rochester Catholic School system.
The average yearly tuition in elementary or middle school is around $4,900, and St. Ann’s will pick up the first $3,000, McRae said. High school tuition is coming in around $11,000, and St. Ann’s will cover the first $5,000.
City school in Rochester have a high school graduation rate of around 50%, while that jumps to 99% in the Catholic school system, McRae noted. The tuition program is a four-year pilot that “literally just started,” he said, and so far five people are taking part.
McRae is also sympathetic to the argument that simply paying higher wages might be the most meaningful move that senior living providers could make on the workforce front, but the economics aren’t feasible — particularly in light of challenges like low Medicaid rates.
A few years ago, St. Ann’s was able to give all its frontline workers an additional $200 in their paychecks around the holidays. That one-time payout ran to $550,000.
“So, when people say, can’t you just give everybody a raise, just a one-time, $200 in your pocket check cost us over half-a-million dollars, and management was not included in that,” he said.
Despite the troubling workforce issues, McRae is optimistic about the future, and St. Ann’s is in a position of strength. Its occupancy is high, including nearly 100% across its 75 assisted living units and about 90% at its 120-unit Chapel Oaks independent living. In addition to its growth in adult day, the organization is targeting home- and community-based services as an expansion area, and partnered earlier this year with another local nonprofit, Providence Housing, to create its first affordable senior housing properties utilizing tax credits.
So, while other providers might be inspired by and even emulate some of St. Ann’s moves, McRae is confident that the organization will remain on the leading edge of change in the years ahead.
“We’re not your run-of-the-mill senior living community,” he said.