As the senior care industry braces for the worst with the global coronavirus outbreak, the largest of the “Big 3” health care REITs believes the industry is better prepared for the flu strain than others.
Though the senior living industry is bracing for the challenges posed by a potential coronavirus outbreak, COVID-19 could show the value of senior housing communities that are well-equipped to care for those who are infected and mitigate a wider spread, Welltower (NYSE: WELL) CEO Tom DeRosa suggested.
“We’re one of the few industries that is talked about how flu impacts us. I don’t think many companies have had to confront this and been asked to quantify what the impact of flu is going to be on their business,” DeRosa said Monday, during an investor presentation at the Citi 2020 Global Property CEO Conference in Hollywood, Florida.
The growing fears over the spread of coronavirus led to the largest single-week stock market downturn since 2008, wiping out $6 trillion in market value last week. Globally, the number of people infected with coronavirus rose to nearly 90,000 people and the death toll topped 3,000.
In the U.S., the number of coronavirus cases now totals 91 and the death toll reached six, all of the fatalities in Washington state. At least six people at a long-term care facility in Kirkland, Washington tested positive for the virus — one, a resident in his 70s, died.
In spite of the rising numbers, DeRosa believes that the industry is well-suited to handle a coronavirus outbreak. Flu is a year-round risk and seniors, many of whom have respiratory ailments, are a high-risk demographic. Larger providers have protocols in place to prevent or delay the spread of coronavirus, should one occur.
Smaller operators, however, can face serious consequences if the virus enters their communities. Welltower, which prides itself as a hands-on owner of real estate, began putting stricter flu protocols in place after a particularly bad flu outbreak in 2018.
The REIT increased its efforts in assisting its operating partners and entered into a collaboration with the Center for Clinical Innovation at the University of California San Francisco. The collaboration focused on caregiver vaccination compliance, implementation of best practice checklist for flu and disease outbreaks, monthly flu reports and calls with infectious disease experts at UCSF.
From this collaboration, Welltower introduced and updated its evidence-based caregiver and patient education programs. DeRosa cites this as an example of Welltower going beyond the protocols established by the Centers for Disease Control and Prevention (CDC).
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“[Our operating partners] are not large companies and don’t have our resources to provide those services,” he said.
The controlled environment of senior living is another reason DeRosa cited for why the industry is better suited to handle a coronavirus outbreak. Communities have social determinants of health in place such as nutrition, safety and medication management.
Moreover, people do not want to set foot in hospitals or emergency rooms during outbreaks for fear of coming into contact with a virus. This will make outbreaks like coronavirus support the senior housing business, because communities have the protocols in place to contain the spread.
“On a regular day, the amount of infection people expose themselves to by stepping into an emergency room or the lobby of a medical office building is significant. Looking into sites of care outside a hospital is compelling,” DeRosa said.
Welltower believes its hands-on approach to asset management gives it another advantage in developing a coronavirus strategy. The REIT has asset management teams in place in Toronto, London, New York City, and on the West Coast that allows it to be more present and in communication with operators. The protocols Welltower established, along with mutually beneficial management structures, allow it to more closely monitor what is happening on a community level.
“When we put in effort at corporate level, there is incentive on [operators’] parts to take these protocols up because they’re as aligned with us as driving bottom line,” Welltower CFO Tim McHugh said.
For now, Welltower is approaching coronavirus as it would any other influenza strain. It spreads in the same way and the protocols to stemming the spread are the same: wash one’s hands; practice good cough etiquette; and advise sick employees stay at home if they exhibit signs of the virus.
“We know what the world looks like to have a flu outbreak in one of our communities. We confront it every day. We cannot predict what is going to happen here. We are as prepared as any industry sector in the world right now for a flu outbreak like this,” DeRosa said.