Aegis Living CEO: Senior Housing Will Not Return to Normal After Covid-19

As much as Covid-19 is currently disrupting senior housing, the long-term ramifications of the pandemic on the industry are yet to be determined.

One thing is for certain — the industry will look markedly different when the crisis is over.

Short-term solutions such as staff wearing full personal protective equipment (PPE), heightened disinfectant and isolation protocols will become the norm for months, at least, and may stay in place until testing improves and vaccines can be developed, Aegis Living Founder and CEO Dwayne Clark said Tuesday when he kicked off Senior Housing News “TALKS” series. 


Clark warned that the industry’s response to Covid-19 is a war with three fronts: keeping residents and staff safe; keeping businesses financially sustainable; and combating reports from news outlets that the long-term care space is unsafe for residents at this time. 

“If you just think you’re fighting the virus, you’re being naive,” Clark said.

As more is learned about Covid-19, providers with plans in place to protect residents and staff, ensure access to adequate testing and other resources and are transparent about how the virus has impacted operations stand to minimize the damage wrought by the outbreak. Providers who are operating from a place of strength should be able to rise to the challenges, but operators that have lacked strong managerial leadership could fail.


“The strong will get stronger, the marginal will get weak and the weak will die,” he said.

Better testing needed

Industry leaders have called for widespread testing, or else communities will continue to be vectors for coronavirus transmission. Additionally, the quality of testing needs to improve, as well, Clark said.

Bellevue, Washington-based Aegis operates 32 assisted living and memory care communities, including nearly 20 in Washington state. Its first staff member fell ill from the virus on February 28, but the operator did not receive the test results for nine days. During that time, four other staff members and more than a dozen residents contracted Covid-19.

A more efficient and accurate testing method could have helped Aegis reduce the spread of the outbreak. One problem with existing testing models is that nasal swabs — the most common form of testing — have wildly varying results.

Clark shared a graph from a group of German scientists charting incubation, positive confirmation of Covid-19, antibody formation and negative confirmation of the virus for up to a 22-day period, via nasal swab (in yellow on the graph), sputum (orange) and stool (gray).

On several occasions, the nasal drops below the detection line. This is important because scientists are discovering that nasal swabs will return with a negative test when the virus may still be incubating in a host. The sputum tests, meanwhile, are more reliable.

“One of the things that you’re going to be seeing is sputum testing is going to become more common because it’s more accurate,” Clark said.

When Washington state became the nation’s first Covid-19 epicenter, Aegis leveraged its relationships to develop preferred testing relationships with two laboratories, to ramp up testing. One lab is now processing 25 tests per day for Aegis, with results received as soon as 24 hours later.

Providers need to be leveraging their health care partnerships to increase the volume of testing of residents and staff. Moreover, everyone who is tested needs to be treated as though they have Covid-19, until results prove otherwise.

“The gold standard [in Covid-19 testing] is a double negative and even sometimes double negatives can give you false information. And that’s the problem,” Clark said.

Maintaining fiscal health

Recent reports indicate that the pandemic could cost the industry up to $57 billion over the next 12 months, as providers increase operating costs to keep residents safe. There have been challenges accessing federal relief, compared to other industries.

It may be too early to determine just how adversely the outbreak will impact the space. Being able to move in new residents will help, but that will be up to states and when stay at home restrictions are lifted.

Providers sitting on solid cash reserves or that have access to capital stand a better chance of riding out a protracted lull in move-ins. When those restrictions are lifted and economies spring back to life, those providers will be better prepared to right their ships.

“We’re going into a phenomenal economic downturn that’s going to be deep and wide. I don’t think it’s going to be as wide as the [Great Recession]. The positive about that — if you want to search for the needle in the haystack — you can say that the economic crisis was falsely induced,” Clark said.

Providers lacking adequate cash reserves and other resources to weather the storm may find themselves targets of acquisition once the crisis abates. While bankruptcies are a possibility, Clark believes that investors and REITs aligned with strong operating partners will target underwater providers for mergers, instead.

“You’ll hear it politely referred to in the industry as a merger. What that usually means is someone with big pockets came in and took over somebody with little pockets and the polite thing is to say, ‘We had a merger,’” he said.

Lack of staffing momentum

The pandemic may not prove to be the boon for filling staffing gaps that providers anticipated.

That can be partly attributed to people not wanting to work somewhere where there is a possible exposure to the virus.

Aegis has received a flood of applications for vacant care manager positions since the pandemic started which is greater than at any point in the company’s history. But the operator is also experiencing more no shows for interviews, as well. This is due people who are applying to meet job search qualifications while collecting unemployment, Clark surmised.

The silver lining there is Aegis is receiving more applications for general manager openings, primarily from the hospitality industry, stemming from a combination of good word of mouth and its reputation.

Aegis is also striving to combat the mental fatigue that working during a pandemic poses to its staff, by erring on the side of over-communication. In the early days of community restrictions, the communications between leadership and frontline staff took place daily. Those communications have been scaled back slightly. Aegis President Kris Engskov sends out communications to staff three times a week, and Clark hosts chats every two weeks.

“Part of it is to be a cheerleader, but part of it is to bring the real news to people and let them know what we’re in for. I have to be honest and transparent about that. It goes down to what can I do every day?” he said.

Clark also stressed that providers need to be transparent with media outlets reporting on the outbreak. He has heard from reliable industry sources that some communities are not reporting positive Covid-19 cases — a development that will not help the industry shift the narrative that it is responding proactively to the pandemic.

“That’s going to give us a black eye, or it’s going to make the black eye bigger. We have to be honest with the press. We have to tell them, ‘We’re dealing with frail residents.’ We’ve seen people in their 90s that get it, survive,” he said.

While the crystal ball forecast is hazy long-term, in the immediate future Aegis staff will continue to wear PPE and practice social distancing — especially if, as medical experts suggest, the rate of infection slows in summer followed by a second wave in fall that will dovetail with flu season.

“Life is not going to be back as normal,” Clark said.

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