As calendars flip to December, the exercise of reflecting on the past year and planning for the future is more necessary — and more difficult — than ever.
How to sum up a year marked by Covid-19, protests for racial justice, and a presidential election, among other changes and upheavals? And what lessons can be drawn for 2021, given that the pandemic showed just how unpredictable the future can be?
We hope that our annual compilation of top quotes from senior living leaders will provide a starting point. These 10 quotes tell the story of a monumentally challenging year for senior living and suggest what the future may hold for the industry.
“I think that we’re moving into a decade of disruption.” — Beth Mace, chief economist for the National Investment Center for Seniors Housing & Care (NIC), Jan. 16, 2020
While no one was predicting a global pandemic would rock the industry, senior living providers were confronting disruptive forces at the start of 2020.
“Disruption is here to stay, if for no other reason than the fact that we’re shifting from the cohort of the greatest generation and the lucky few into the baby boomers, and they are known as a cohort of disruption,” Mace said during an SHN webinar on the 2020 outlook.
She was not alone in making these predictions. While bullish on senior living, LCS CEO Joel Nelson said: “I think [this year] will continue to be filled with disruption and complexity, and I think that will go well beyond 2020.”
Within a few months, Covid-19 would only add further urgency to the big themes that were already being discussed as 2020 began, including how to better leverage technology, how to work more closely with health systems and payers, and how to create a more appealing product for the rising generation of consumers.
“The future of the senior housing industry is not what exists today.” — Thomas DeRosa, then-CEO of Welltower (NYSE: WELL), Feb. 13, 2020
While many senior living leaders were predicting disruption at the outset of 2020, Welltower CEO Tom DeRosa was among those most actively working to change the status quo by creating new models.
Under his tenure, Welltower forged ahead with a strategy of integrating senior housing into the care continuum through joint ventures and other partnerships with health systems and payers. For instance, the real estate investment trust (REIT) is bringing more care on-site in senior living communities through a partnership with Anthem affiliate CareMore, while creating more care options for middle-market independent living residents through its relationship with Geisinger. And the REIT is working with operating partners and technology companies such as Philips to create technologically advanced communities.
DeRosa’s exit from Welltower in October would ultimately be among the unpredictable changes in the industry during 2020. But his successor, Shankh Mitra, affirmed the REIT’s strategic direction, and the Covid-19 pandemic has strengthened the case for finding new ways of bringing care into senior housing settings at various price points.
“After you flip the game board, you have to reset the pieces. That’s where senior living is going to be for the next three to five years — just figuring out how to set the pieces, set up a new game [with] new assumptions, new players, new landscape.” — Dr. Bill Thomas, founder of Eden Alternative, Green House, Minka Homes and Communities, March 25, 2020
The first Senior Housing News article focused on the coronavirus appeared in late February, with ALG Senior Chief Medical Officer Dr. Kevin O’Neil warning that — if the threat fully materialized — the “effects could be devastating.” About one month later, with communities around the United States in lockdown, senior care innovator Bill Thomas spoke in sweeping terms about the impact that Covid-19 would have on the industry.
At this early stage, providers around the country were scrambling to put new operating protocols in place, were combating fear and uncertainty among residents and staff, and were trying to deal with the devastating effects of Covid-19 outbreaks. But Thomas was confident that high-quality senior living and care providers soon would learn how to secure their buildings and — to the greatest extent possible — protect older adults from the disease.
He appears to have been correct in this prediction, based on the low infection rates reported by the publicly traded providers and REITs. Only time will tell whether he will be correct about how the proverbial chess board of the industry will be reset differently over the next several years.
Among his predictions: the job description for senior living workers will change as a result of seeing the risks they took — and the relatively low pay and prestige they received — during Covid-19; the move to home- and community-based care will accelerate, and communal living models will become less dense; and the “leisure lifestyle” vision of senior living will go away, in favor of a more balanced offering focused on health and wellness.
“We’re not getting that message out at all. The industry is being extremely quiet and waiting for Covid to just go away.” — Larry Kutscher, CEO of A Place for Mom, April 17, 2020
During the second full month of the Covid-19 pandemic, a theme emerged: Senior housing providers were not doing enough to tell their stories and differentiate themselves from skilled nursing.
It’s a problem as old as the private-pay senior living industry itself — the public does not understand the differences between traditional nursing homes and independent living, assisted living and memory care communities. But in the pandemic, this confusion had dire consequences. There was a torrent of news about horrific circumstances and high death tolls in nursing homes, and these stories failed to distinguish between different types of senior housing.
Meanwhile, older adults with pressing needs were not sure where to turn, and senior living providers were dropping the ball about spreading the word that they were largely succeeding in keeping residents and staff safe, and were able to accept move-ins, APFM’s Kutscher observed.
Others echoed his concerns, including leaders with Bickford Senior Living. The Olathe, Kansas-based provider has been an example of transparency, posting Covid-19 infection numbers publicly for each of its communities since early in the pandemic. Trilogy Health Services has also created a public-facing website with a plethora of Covid-19 data. The industry group POSH formed to help push back against the bad press, and ASHA likewise has launched a public relations campaign.
So, the industry now is less “quiet” than it was earlier in the year, but it still has a long way to go to tout its successes in keeping residents safe — and getting consumers to understand the difference between private-pay senior living and nursing homes is an even tougher task. Working toward that goal is sure to occupy providers in 2021 and beyond, but embracing greater transparency is one potentially promising first step. That means being more forthcoming and proactive with the press, sharing more information — including about pricing — on company websites, and engaging more effectively with consumers on social media and other platforms where they are increasingly finding information.
“I believe if the government mandates you close your doors and adds many additional restrictions/regulations, they have an obligation to offer relief.” — Roger Bernier, President and COO, Chelsea Senior Living, May 21, 2020
Through the first months of Covid-19, senior living providers and industry associations were clamoring for financial relief and other support such as access to personal protective equipment and testing. But their pleas appeared to fall largely on deaf ears, as senior living was largely sidelined while support flowed to hospitals, nursing homes and other industries such as hospitality and airlines.
By May, frustration was reaching a boiling point. Providers in the Northeast, like Chelsea Senior Living, had been hit hard by the first wave of the virus and were still reeling from restrictions on move-ins. Making matters worse, the state of New Jersey was implementing new regulations that applied equally to nursing homes and assisted living, not acknowledging the differences in their operating models and resident bases.
This points to a larger issue. Just as consumers have confusion about what exactly “assisted living” is, so too do lawmakers and regulators. Their lack of familiarity with the private-pay senior living industry is one of the primary reasons why financial relief and other aid was slow to reach providers, American Health Care Association/National Center for Assisted Living CEO Mark Parkinson would explain.
Meaningful financial relief finally began flowing to assisted living providers in September. While still not adequate to support the steep losses that providers have incurred, the relief is welcome, and further money may be on the way.
The flip side is that by lobbying long and hard for financial support, industry advocates educated lawmakers about the role that assisted living plays in the health care system and may have paved the way toward new federal regulations. Now, the industry may be facing a tricky decision about how much to fight against regulation, or whether working cooperatively with Congress is the best approach. Possible upsides to federal regulation could be a standardized definition of assisted living that creates more consumer clarity, and less likelihood that states will enact blanket regulations that treat nursing homes and assisted living as one and the same.
“The big companies are going to recognize this product type, and they’re going to recognize that smaller is better.” — Jim Stroud, President of Sonoma House Assisted Living & Alzheimer’s Care, co-founder and former chairman of Capital Senior Living, June 3, 2020
Even before Covid-19, senior living developers and operators were increasingly interested in small-house models. Bill Thomas’ Green House communities and Minka homes were prime examples, but newer ventures like Cantina Communities also saw great promise in communities of small homes were older adults could balance privacy and socialization. Advances in modular construction and technology — including on-demand services like Uber and Peapod — were supporting these new models.
The pandemic immediately and dramatically increased the appeal of small house-style senior living. Being isolated in an apartment unit in a building where common areas were closed compared poorly to living in a small house, near other people but safely distanced from them, with easy access to outdoor areas.
“I think a smaller, self-contained, autonomously functioning residence is far better than [one with] long hallways, semi-private rooms or even three- and four-person rooms,” Green House Senior Director Susan Ryan told SHN. “How much easier is it to contain a virus, and everybody’s got their own room, breathing their own air?”
Anecdotal evidence supported the notion that small houses were easier to keep infection-free. If further data emerges to illustrate this was the case, expect even greater interest from investors and operators as they consider expansion options coming out of the pandemic. Already, architecture firms such as Perkins Eastman are considering various ways of adapting small house formats for different project types, including vertical models with more self-contained living and common areas than traditionally have been built.
“Covid shifted the value proposition completely.” — Matt Stevenson, COO of Oakmont Senior Living, June 29, 2020
The pandemic immediately forced senior living operators to adjust how they run buildings on a day-to-day basis. By summer, it was clear that an even larger shift was occurring: Covid-19 was forcing providers to re-consider the fundamental value proposition of their communities for consumers.
Providers known for their luxurious communities were investing substantially to upgrade their health care capabilities, and pivoting their sales and marketing to emphasize safety and security.
“Pre-Covid, our value proposition was the luxury of a highly amenitized building, hospitality, renowned five-star dining experiences, amenities like massage rooms, fitness centers, pool, spa and sauna … and that’s what enticed many seniors to move into our community,” Oakmont Senior Living COO Matt Stevenson told SHN. “Covid shifted the value proposition completely.”
Oakmont set up a multi-discipline task force aimed at Covid-19 mitigation, converted some of its senior housing units to quarantine rooms, linked up with a laboratory, hired a medical director and “completely transformed” its sales process.
Other providers — including Aegis Living, Solera Senior Living, Artis Senior Living and Koru Health — have made similar adjustments and investments. Among the most common moves: Partnering with health systems and medical experts, implementing new technology aimed at infection control and other health-related objectives, and rolling out new marketing materials that emphasize safety.
Senior living providers are not abandoning the social model that has driven much success across the industry, but rather are making more strenuous efforts to integrate clinical capabilities. In other words, the pandemic has settled the longstanding “health care versus hospitality” debate — going forward, any provider will have a tough time arguing that senior living is not, or should not be, a health care product. This may end up being one of the most significant long-term effects of Covid-19 for the industry.
“Unless we are intentional about seeking out historically underrepresented classes, I don’t think we can move the needle in any positive direction.” — Aaron Webb, CEO of CHI Living Communities, July 21, 2020
The killing of George Floyd sparked massive protests and gave momentum to the Black Lives Matter movement in 2020. As part of the larger social reckoning, voices within senior living once again drew attention to longstanding problems related to diversity and equity in the industry.
A particularly glaring problem is the imbalance between the diversity of the frontline workforce and the lack of diversity within the industry’s leadership ranks. In July, Aaron Webb became one of the few Black senior living CEOs when he took that role with CHI Living Communities. One of his first orders of business was to ask for a breakdown of all of the company’s different employees and residents, organized by their race.
“The numbers were nowhere close to where they could be, or should be, on either count,” Webb told SHN.
Remedying this is one of Webb’s top priorities, beginning with an evaluation of how and where the organization is recruiting new employees. Other providers have also launched concerted efforts to increase diversity and equity, including National Church Residences, Eclipse Senior Living and Presbyterian Villages of Michigan.
But the road is a long and hard one. As Kendal Corp. COO Marvell Adams told SHN, there’s no “flip to switch” that can make leadership more diverse overnight. Investment in young people who are just joining the industry is needed.
And while encouraged by the changes being made in light of Black Lives Matter, Adams also emphasized that successful efforts are rooted in a genuine commitment to hard changes.
“Just being able to say, ‘Okay, yeah, we just did this training so we’re good,’ or ‘We sent out a letter, great,’ — I don’t think that’s what we’re talking about,” he said. “I think we really are talking about recognizing what the challenges are for people of color to be a part of our organizations as residents, staff, or board members. And then, how can we remove those barriers?”
“We’re going to try to be the Tesla of senior housing.” — David Freshwater, Chairman of Watermark Retirement Communities, Oct. 14, 2020
All the challenges of 2020 did not dampen the ambitions of many senior living providers, and for some the pandemic fueled further innovation.
Watermark certainly remains committed to innovation, as Chairman David Freshwater made clear during a fireside chat at SHN’s BUILD event, held virtually this year. The Tucson-based provider is moving ahead with a “precision wellness” model, which takes the company’s long-standing interest in whole-person wellness to new levels. Aras Erekul, formerly a leader with pioneering wellness organization Canyon Ranch, is on board to help drive the effort.
Watermark also recently opened a new community in New York City, having repositioned a historic building in Brooklyn Heights at a project cost of about $330 million. The community is one of several coming online in the Big Apple, which are redefining what the top of the market can look like in senior living.
But other providers also are incorporating lessons learned during 2020 as they adapt and evolve for the future. Louisville, Kentucky-based Atria Senior Living, for example, is touting its “community of the future” in Newport Beach, California.
Covid-related uncertainty will persist into 2021, and providers will be focused on rebuilding occupancy and carefully managing their strained budgets — but as efforts at Watermark, Atria and other companies demonstrate, forward-thinking organizations also will be innovating and taking risks to meet a changing market.
“We know [Biden’s] focus moving forward is going to be around home- and community-based services with an emphasis on residents aging in place, which is what we offer.” — James Balda, CEO of Argentum, Nov. 8, 2020
As the year comes to an end, the political order in Washington, D.C. is changing.
A Biden presidential administration could increase the likelihood of federal assisted living regulation and might dampen prospects for robust litigation protections related to Covid-19. But the Biden White House also might prioritize the pandemic-related needs of senior housing and care providers more highly, while creating a more predictable environment overall.
“With a moderate Democratic president, a Democratic House, and what will certainly be a closely divided Senate, that will push us toward more consistency in policy, more moderation in policy, more likely to be steady as she goes — and that’s quite a favorable backdrop for Ventas, and hopefully for the country as well,” Ventas CEO Debra Cafaro said during the company’s Q3 2020 earnings call.
Biden’s specific policy proposals have centered on greater support for home- and community-based services, which conceivably could include policies that relate to senior living. For instance, he floated the idea of a “long-term services and supports innovation fund” to create alternatives to institutional care for older adults.
Given the balance of power in Congress is yet to be determined, pending the Georgia run-offs, the new political reality is still taking shape. But one thing is certain: After a year of massive change, senior living providers are again getting ready to adapt.
Companies featured in this article:
A Place for Mom, Aegis Living, Argentum, Artis Senior Living, ASHA, Atria Senior Living, Chelsea Senior Living, CHI Living Communities, Eclipse Senior Living, Kendal Corporation, Koru Health, LCS, Minka, National Church Residences, NIC, Oakmont Senior Living, Perkins Eastman Architects, Presbyterian Villages of Michigan, Solera Senior Living, Sonoma House Assisted Living, Ventas, Watermark Retirement Communities, Welltower