Brookdale Senior Living (NYSE: BKD) recently held a “virtual sales rally” involving about 1,800 people, with the goal of helping communities drive occupancy as the Covid-19 pandemic enters its next phase.
“The sales rally focused on strengthening our messages on Brookdale’s points of difference with each community’s local story, including facts on how we’ve managed through the pandemic,” CEO Cindy Baier said Wednesday in a recorded presentation for the Jefferies 2020 Virtual Healthcare Conference.
The rally occurred two weeks ago, was led by Senior Vice President of Sales Rick Wigginton and involved sales teams, executive directors and other leaders.
“Why did we do the sales rally now? Because we want to be ready to improve occupancy,” Baier said.
Currently, Brookdale is allowing new move-ins if they can self-isolate in their apartments for 14 days, she said. And move-in trends have been improving. April move-ins were down 65% year-over-year, but Baier believes this was a bottom and noted that May was “slightly better.” However, the company does not yet have final numbers for last month.
A push to build occupancy is made possible by several developments in the battle against Covid-19, including the wider availability of testing.
In concert with state and local health departments, the National Guard, and private labs, Brookdale plans to test residents and associates in substantially all its communities, using a phased approach. To date, about one-third of communities have been tested, with about a quarter of that testing done through government assistance, Baier said.
“We are still gathering final May month-end results, but as of last week, only about 1.5% of residents who have lived with us during 2020 have tested positive for Covid-19 and about 15% of our communities are currently impacted,” she said.
In terms of the messaging that sales teams are encouraged to share, a key goal is to “amplify our health plus care story” and tout the successes the company has had in its Covid-19 response, Baier said.
“Where we have tested a community’s residents and associates and had no positive cases, we can amplify our message with this news,” she said.
Building occupancy — and therefore revenue — is important at any time but is especially crucial in light of elevated expenses related to Covid-19. Based on how costs escalated in the first weeks of the U.S. coronavirus outbreak, a full quarter of Covid-19 expenses is likely to reach about $50 million, Baier said. Those costs are largely due to the purchase of personal protective equipment (PPE) and other supplies, incremental labor costs and other expenses. While PPE costs will remain elevated, Baier does anticipate that expenses will decline between Q2 2020 and Q3 2020.
Brookdale has received some financial assistance from government relief programs, largely because of the Medicare and Medicaid revenues it receives for home health and skilled nursing services. The company has accepted $29 million in CARES Act funds; there was initial uncertainty over whether this money would have to be repaid, but likely it will not, Baier said.
Financial relief has not yet been forthcoming for private-pay senior living providers, but Baier is optimistic.
“We believe there is strong evidence of Congressional intent that senior living providers receive funding from the HHS [Health and Human Services] fund,” she said.