Revera CEO: Pandemic Response Analysis Informs Operating Changes, Sunrise CEO Search Progressing

Like senior living providers of all sizes, Revera was affected by Covid-19 in myriad ways. But as one of the largest North American providers, the company had a big-picture view of the pandemic.

In an effort to analyze what happened in the first waves of Covid-19, and prepare for potential future infectious disease outbreaks, Revera worked with a panel of medical experts to create a detailed report.

“We tried to, as an organization, share a lens from an operator’s perspective — because the operator’s right in the middle of the system and you see both the wonderful, magical things that happened, that would warm your heart, and you see a lot of really challenging things,” Revera CEO Tom Wellner said on a recent episode of the Senior Housing News podcast, Transform.

Mississauga, Ontario-based Revera serves 20,000 older adults in long term care homes and retirement residences in Canada, and is the majority shareholder in Sunrise Senior Living, one of the largest U.S. providers.

During his Transform interview, Wellner discussed some of the findings of the Covid-19 report, provided an update on the search for a new Sunrise CEO, and shared his thoughts on the potential for a multi-brand strategy to serve different parts of the market.

Highlights of Wellner’s podcast interview are below, edited for length and clarity. Subscribe to Transform via Apple Podcasts, SoundCloud or Google Play.

On the process of choosing the next Sunrise CEO:

From a Revera standpoint, we’ve been invested in and supportive of Sunrise since mid-2014. We really are pleased to be associated with Sunrise and the Sunrise Senior Living brand. We think it is continuing to be the premium offering for assisted living and memory care across the U.S., also here in Canada. We continue to want to move things forward with our partners Welltower as well. So we’re really focused on making sure that Sunrise continues to balance the operational, quality/clinical side of delivery with the needs and desires of the property owners — Ventas, Welltower and Healthpeak, up to today. And with Chris’ transition, we’re very much looking to continue to keep the momentum going.

From an operational standpoint, we have a very active development pipeline of projects. The Sunrise team has done a great job from that perspective. And we have been — the board and the majority shareholders —very actively seeking the next leader. I would love to tell you more today. I may be in a position to do that relatively shortly. We obviously want to make this period as concise as possible, and continue to enable the team at Sunrise to continue to grow the business the way we want it to grow, and also to continue to grow the Sunrise brand resonance in the market as well.

On the potential for multi-brand portfolios for Sunrise and Revera:

I think I tend to try to approach it from the actual client perspective or market segments first, and then worry about how the brand and the brand expression serves that segment second. So I think as it relates to Sunrise, what I would say is, right now with the leadership transition, I would believe that is an open area for a strategic relook. I would expect we’ll be having a dialogue with the new CEO, when we put he or she in the chair.

As far as my personal views, I think our Revera operating brands in the Canadian market, we have a range where we’re trying right now to tighten it up. Our portfolio that we operate in Canada was initially put together through a series of acquisitions over time, hence, locations, asset age, mix of amenities and positioning within the economic part of the market tends to be more heterogeneous than homogeneous. Sunrise, the mansions are very homogenous. We may look at the Villas. We have a desire to continue to see that concept brought forward. But generally, I think our main focus at Revera, in our Canadian business, has been to really be much more clear on where we want to operate, meaning our location … secondly, what we want to operate, so we’re looking at the physical asset, the segments that it’s serving. Then thirdly, we’re trying to tighten up and focus on linking our operating model and the operating experience to that.

So for us, we’ve been recycling non-strategic assets, and will continue to acquire assets that fit the locations, fit the segments. We’re trying to serve a premium luxury market segment with a range of services within that model, from some seniors apartments through to mostly independent supportive living with usually 32 [units] to multiples of 32 [of] assisted living/memory care, depending on the size, and we tend to be in the 160 to 220 range and sometimes larger. So for a Canadian offering, we’re trying to strengthen the core brand within those parameters, before we’re seeking to put multiple brands under our operating platform.

To my original point, we are seeking to service what I would call the middle market economy segment. But we would not do that with the current Revera operating model. I believe that segment is needing to be served. But to serve it with the current operating model probably makes less sense in my mind; I think we would look at a different build profile, a different set of locations, a different set of offerings. And our focus is really to make sure that we get the right delivery of those services or make it as streamlined as possible, versus trying to get one operator to do multiple things. I think that’s harder to do.

On potential changes to senior housing design and operations to enable middle-market prices:

We’ve learned a lot. Again, we’re the majority capital partner in the province of Quebec and Canada to our partner group Selection. The Quebec market in Canada’s quite a well-developed market, and well penetrated from the perspective of the percentage of seniors over the age of 75 that choose a congregate setting.

What I would say is the things that we’re learning and building are one, the size and scale through which you can spread your amenity spaces needs to be the right balance. That would be point one. And then secondly, we are looking at both the per-square-foot suite versus amenity space allocations as well. Obviously, things like finishes and that type of thing, to be able to both project value as well as make asset longevity work. We’re not looking at the multiple suites or the different operating models per se, but … our thinking is along the lines of lowering your volume of staffing that you would need to be overseeing as an operator. So what I mean by that is, having more opportunities to bring in service offerings that are contracted in and done by others so that your volume of people within residence that are actually on your property management payroll is more flexible.

… Certainly in Quebec, there are [Revera communities] that absolutely fit that profile. We do not yet have anything in the English Canada market that that fits that exact profile; however, we have a partnership with Smart REIT, who is a large retail REIT in the Canadian market that has locations as well as a desire to grow in the senior space, that we have been doing a lot of work on that particular model [with], to bring it in. They have a lot of sites. They were the largest shopping mall REIT in the Canadian market. They did all the Walmarts in Canada, as an example. So that just gives you a flavor of the type of location and the type of mix of clients that they serve as their core.

On the potential for such a model in the United States:

I believe there’s applicability in multiple markets. To be frank, I definitely think there’s opportunity in the U.S. The multi-res, the residential market in the U.S. is obviously highly developed; if I compare that the U.K., as an example, it’s far less developed. I definitely think there is applicability in the U.S., I think we just have to be very smart as to which markets make sense.

On Revera’s Covid-19 report from an independent panel, and the recommendation to forge closer collaboration between senior housing and other parts of the health care continuum:

The report was a response to wave one of the pandemic. We more or less opened the kimono, so to speak. Revera, in Canada, the core business is 76 long-term care [homes], so 10,000 residents in long-term care, and 10,000 residents that we serve in our retirement portfolio. So, it is focused a lot on the learnings around those two experiences.

This independent panel had some of the top gerontologists in the country. We had a chair, Dr. Bob Bell, former deputy minister of health in Canada’s largest province, we had infection control experts, et cetera. To your question … In Canada, we experienced the public health system that, even though the recommendations from the SARS experience were to strengthen public health surveillance, successive governments made decisions to underfund it.

The structure you’ve got in the Canadian context [is] a federal set of funding and parameters, but it’s left to each of the 10 provinces to more or less implement the health care system or health care services within the province. So, there’s a high level of variations. It’s almost like we’re living in 10 separate health care systems in a country of 34 million people. They’re almost like 10 separate health maintenance organizations in the U.S. So, the links between the public health directives were very confusing. We would have in the province of Ontario, Canada’s largest province, 34 separate public health units all giving different directions, different directives, and it’s very challenging for a chain operator like Revera is. It’s similar to how the U.S. system may work in one hospital system versus others. So, that was one of our significant experiences.

The other dynamic I think that comes out in the report is the differences between the acute-care setting versus the community setting. It’s just been fascinating to me, as we’ve gone through this, the sort of lack of understanding and appreciation, frankly, by acute-care experts, to what actually happens in either retirement community or long-term care settings or other community settings. The differences between staffing models, funding models, the way infection control is done, the expectations for physicians to be on site, et cetera … So, I think there’s a lot of opportunity to look at this whole design of how seniors move through the system.

When I started in my job many years ago, in 2014, we owned 29 specialized nursing facilities in nine states in the U.S., and one fo the things I think the U.S. system is actually relatively good at compared to the Canadian system is incenting movement of patients through that continuum. So, there’s incentives and disincentives for hospitals to make sure that patients are moving out of the hospital at the right time, and that there are step-down spots and then physiotherapy or whatever can help them get to a home setting but with the right support. The Canadian system doesn’t have a lot of those things. So, I think you see that a lot in the report, as well.

On bringing health care into senior living communities through on-site clinics or partnerships with hospitals and physician groups:

I think that’s certainly a trend we see in the U.S. And, certainly, one of the things that’s been laid bare in Canada is the need to have that be more robust.

One of the things to make clear is that in the long-term care setting, there are usually one or multiple physicians assigned to a particular long-term care home, that are associated with the hospital and appropriately do their thing and are interested in the space. I think that’s not as consistent as it should be, and the expectations of medics and what they need to be doing and how frequently they need to be doing it in long-term care sites is an important part that would enhance that movement, as well, and that integration.

In the retirement setting, it’s different from the perspective that there’s a blend of positions that may be associated with one or multiple long-term care or retirement communities, but because they’re independent settings, seniors will potentially have their own existing physician. So, there’s the complexity of trying to make sure that the integration of all the services happens in a smooth manner. I think it’s an important dynamic that will get accelerated as a positive outcome of post-pandemic life.

On recommendations related to staffing changes, including creating new positions in the workforce and new scheduling practices:

This is a people serving people business, whether it’s retirement [homes] or long-term care. Every market that we invest in or operate in has the same sort of strains on both quantity and ability of systems to provide adequate credentialed staff and regular support staff that want to be in the space. So, part of our efforts as it relates to enhancements to staffing, [is that] we did a lot of external recruiting.

One of the differences between Canada and the U.S. is in Canada, health care is highly unionized. So, we’re probably in the 90s as a percent of the health care workers unionized versus, in the U.S., maybe that number is 20% to 25%. So, there’s a dynamic there that’s different, but I think the basic challenges are making sure that there’s the right number or volume of hours per clinical need or resident acuity. The acuity, especially in the Canadian long-term care setting, is significant. It’s a very needs-based business. There’s almost two people for each available bed. So, in Ontario, there’s 38,000 people on waiting lists for 60,000 to 70,000 beds. So, it’s a significantly challenging space. The acuity most residents have five and six comorbid conditions and a significant amount of cognitive challenges.

So, from a staffing perspective, it’s not just the volume of hours on average per resident, it’s also that there’s some highly specialized needs. We need to be able to train and give people support to be able to learn the skills and be able to practice their profession. We continue to do additional specialized infection control training in the short term, but are looking for ways to grow other skills and specializations.

And then on the clinical side, on the registered side, I would say we just need more practical training combined with academic training.

So, we’re trying to make sure that the retirement settings and the long-term care settings enable people to have the experiences that they might otherwise need to be able to practice and grow their practical application and the skills they’re learning in either community colleges or nursing colleges, which I think will help, as well.

And then I guess the third area would be around the use of technology for as many repeatable tasks as possible. There’s a whole series of technology tools that we’re using to screen resumes, whether it’s A.I. or tools like Bookchain that we’ve put in that really help with reachouts and scheduling and various other things, similar to what we use with Sunrise and OnShift. So, more ability to integrate technology will help as well.

On the possibility of designated family members as essential caregivers, to enable visitation in senior living, and whether this idea has gained traction in Canada:

There was a Globe article the other day, where there was highlighted a daughter who worked out — it wasn’t a Revera site — but basically worked out a way to stay with her mother for six or eight weeks within the long-term care home. There a whole bunch of challenges with that. But, yes, there’s more societal support, would be my first message.

What is most apparent to me through that first wave and into the June timeframe is both residents as well as families just had been so isolated from each other, there was a groundswell of how to get them together.

… We basically designate two essential caregivers per resident in most of our retirement communities. We work with them to make sure their skills and capabilities and understanding of infection control [are good], so there’s a bit of training that we do. We know the screening component, and certainly the vaccines will make it better … but from a psychological and from a human connection and human communication perspective, it’s very, very helpful to both our residents and also to our own staff, but also very engaging for the family members who want to do that. So, we’re doing everything we can to try to enable it.

On the goals for the report:

We tried to, as an organization, share a lens from an operator’s perspective. Because the operator’s right in the middle of the system and you see both the wonderful, magical things that happened, that would warm your heart, and you see a lot of really challenging things.

I think overall we have put in place almost all of the short-term recommendations. With the second and third wave, we’ve been able to predict better where the virus is likely to show up. And through the work we’re doing, implementing the pandemic playbook that we put in place, the additional [infection control], additional training, the extra staffing that we’ve put in place, [we’re trying] to at least limit spreads in the second wave and catch more quickly infections that are coming in.

Hopefully, it’s a helpful document and really a tribute to all the excellent work that our frontline teams have been doing over the last year.

Click below to listen to the complete episode:

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