Senior living providers in the Northeast U.S. ran into significant challenges as Covid-19 spiked last spring, and Benchmark was no exception.
The Waltham, Massachusetts-based senior living provider is currently working its way back to more stable operations, according to Benchmark Founder and CEO Tom Grape.
The effort is evident in two news announcements this week. Benchmark has acquired an ownership stake in the largest continuing care retirement community (CCRC) in Connecticut, and assumed operations of the campus. The provider is also navigating the pandemic with guidance from its coronavirus advisory council of medical and public health experts. The council includes a former U.S. surgeon general and a former secretary of the U.S. Department of Veterans Affairs, as well as the former secretary of the Massachusetts Executive Office of Elder Affairs.
All the while, Grape is also readying the company to execute on potential opportunities ahead, such as new acquisitions that may not have been as feasible in the past, as Covid-19 continues to pressure operators.
Benchmark operates a portfolio of 63 senior living communities. The provider began working with a new capital partner in the summer of 2019, when investment firm KKR (NYSE: KKR) acquired an ownership interest from Welltower (NYSE: WELL) in a $1.8 billion transaction.
Assembling the experts
Benchmark first formed its advisory council over the summer after several months of coronavirus-related pain and pressure. The company was not spared last spring from disruptions caused by Covid-19 outbreaks in the Northeast.
“We felt it in terms of occupancy, and we had a number of positive cases,” Grape recalled.
Early on, Benchmark was able to solidify its supply chains and source personal protective equipment (PPE) and testing kits. The company also built a Covid-19 risk stratification tool with the help of outside medical experts, and helped some of its nurses become certified infection control specialists.
Grape declined to share Benchmark’s current average occupancy rate. But he believes these and other initiatives will help the company move closer to pre-Covid occupancy levels.
And Benchmark’s Covid-19 advisory council is helping inform that process, as well. The council includes public health officials such as Dr. Alice Bonner, former secretary of the Massachusetts Executive Office of Elder Affairs and current director of Strategic Partnerships for the Center for Innovative Care in Aging; Dr. Richard Carmona, who served as the 17th U.S. Surgeon General from 2002 to 2006; and Dr. David Shulkin, an Obama appointee who served as the ninth secretary of the U.S. Department of Veterans Affairs under the Trump administration until 2018.
The council also includes medical experts such as Dr. Brent Forester, who is the chief of the geriatric psychiatry division for Harvard’s McLean Hospital in Belmont, Massachusetts; Dr. Michael Jaff, former CEO of Newton-Wellesley Hospital in Newton, Massachusetts and current chief medical officer and vice president of clinical affairs, innovation and technology at Boston Scientific; and Dr. Timothy Johnson, former chief of emergency services at Union Hospital in Lynn, Massachusetts, and former medical editor for ABC News.
“Being in the Boston area, we’re blessed to have a lot of top-flight medical folks,” Grape said. “We had relationships with some of them before, and others we didn’t but had reached out.”
Benchmark is not the only senior living provider turning to a council of experts to help inform its infection control strategies. Bellevue, Washington-based provider Aegis Living also formed a Covid-19 advisory council last June. Like Benchmark’s, Aegis’ advisory council is staffed by physicians and medical experts representing various disciplines.
At Benchmark, the advisory council will provide advice and insights to help the senior living operator guide its Covid-19 response and long-term infection control strategy. Its members first met in September, and the issues it has since focused on include Covid-19 testing kits and vaccines, isolation of residents and staff burnout. The council also helped Benchmark develop an education campaign to increase vaccine participation among staff.
“All of the issues that we bring to them are ones that we’re facing and confronting, where we want the best advice possible to allow us to serve our residents, families and associates better,” Grape said.
While the Covid-19 vaccine is fueling hopes that the industry will be able to start turning the corner on the Covid-19 fight this year, Benchmark’s advisory council will continue to play an important role in the company’s operations for the foreseeable future.
“The kinds of questions we’ll be asking this council may evolve, of course, over time,” Grape said. “But I think Covid-19 will be with us for quite a while.”
Benchmark’s road ahead
Benchmark will initially focus on building occupancy in its portfolio this year, and the provider has already made some headway on its vaccination efforts with CVS Health. About one third of Benchmark’s 63 communities have held their first vaccine clinics, and all but one of the remaining communities have received clinic dates from CVS.
“It was a little bumpy in the beginning, and a little slower to get some of the dates than we thought, but it’s all coming together,” Grape said. “We’re pleased with the progress we’re making.”
While Benchmark’s residents have accepted the vaccine with enthusiasm, the provider’s staff have been more reticent in doing so, according to Grape. And that is a trend other providers are seeing, too, as some staff drag their feet in signing up for initial vaccine clinics. Still, the rate of staff vaccine participation is increasing at Benchmark, and Grape believes more will choose to get their shots over time.
The company is currently working through a development pipeline that includes the construction of a new community in Hanover, Massachusetts. Benchmark also recently took part ownership and operational management of Meadow Ridge, a continuing care retirement community (CCRC) formerly managed by Life Care Services in Redding, Connecticut. The community sits on 136 acres of land, is purported to be the largest senior living community in the state with 415 apartment homes.
The operator currently manages four CCRCs, a space it entered in 2011 by acquiring Edgehill from the Stamford Health system for $71.5 million.
“We’re not going to become a CCRC company, but it’s a very good line of business for us,” Grape said.
On the acquisition front, Benchmark believes there may be some opportunities to come, especially given the widening gap in quality among senior living providers as a result of the Covid-19 pandemic.
“A lot of people are expecting some dislocation, because of what Covid has brought on, … in the form of potential acquisition opportunities,” Grape said. “We’ll watch those carefully.”
Benchmark also wants to continue looking for ways to serve the middle market. The provider has three communities under its Branches brand, with rates that are about 20% to 25% lower than Benchmark’s core offerings.
“How to bring the pricing down even further from that, we haven’t quite cracked that nut yet,” Grape said. “We continue to be interested in it, but having already done it, we realize how difficult it is.”
Looking ahead, Grape believes that Covid-19 will continue to take center stage as the provider rebuilds occupancy at its communities. Beyond that, he also sees the availability of labor and retention as top challenges for the industry.
“I think that’s going to be a big challenge for us after Covid,” he said.
But Grape also believes that, as Covid-19 continues to disrupt the industry, companies investing the right amount of time and resources in beating the pandemic will stand apart from the crowd. And that is what Benchmark is trying to achieve.
“Those that are providing the proper training, the proper infrastructure, the proper equipment for their staff and who have the culture … are going to really distinguish themselves from those who aren’t making those investments or who aren’t focused on providing quality services,” Grape told Senior Housing News. “That gap will become more evident, and I think that’s a good thing for the industry [and] an opportunity for companies like ours.”