The baby boomers are coming — and Priority Life Care CEO Sevy Petras believes the industry will need to market to them in an entirely new way.
The Fort Wayne, Indiana-based operator recently put that philosophy into action by revamping its website and digital marketing strategy to better cater to the next generation of senior housing residents.
Instead of gatekeeping information to move them along in the sales process, Petras believes the boomers and their families want to have as much information as possible when searching for a new community.
“We’re into a different generation right now, and they are tech-savvy, they are internet-savvy,” Petras said during a recent appearance on SHN+ TALKS. “Boomers do their research.”
At the same time, after many months of relying on contract labor to get by, the operator has substantially reduced agency usage in its 40 communities, and has found its footing with regard to setting new employee wages.
“I don’t think that the sky is falling anymore,” Petras said. “We still have agency problems, but for the most part, agency [usage] has been eliminated in any of the areas that we really didn’t have those problems prior to the pandemic.”
Even as some of the company’s staffing challenges have abated, labor costs and other expenses are still elevated from where they are pre-pandemic. And that has compressed margins in the short-term. There, too, Petras sees the company moving in the right direction, albeit slowly.
“It’s going to take a couple more years in my opinion, we can’t hit everybody with 10% increases,” she said. “We have to inch it along and we have to take that into consideration.”
We are pleased to share the recording and this transcript of the SHN+ TALKS conversation with SHN+ members. Read on to learn about:
- How Priority Life Care is gearing digital marketing toward the baby boomers
- What the company has planned for its Celebration Villa brand with Ventas (NYSE: VTR).
- The current state of staffing, and where Priority Life Care is still feeling pain
[00:00:06] Tim Regan: Morning, everyone. I’m Tim Regan with Senior Housing News. Welcome back to SHN+ Talks. We have Sevy Petras, CEO of Priority Life Care.
What’s the state of the company right now, over the past few months, and what are you focused on at this point in 2022?
[00:02:36] Sevy Petras: A lot has happened during that time. One, I think we were rounding the corner for what I would consider to be the biggest and the last real point in Covid at that time, it was around the holidays, we were coming into that January, February. Everybody was still I think a little hesitant to understand what the new normal was going to be. I think first and foremost, since then, we’ve really kind of understood and settled into what we’re dealing with in Covid.
I think travel is back. People are back out, moving around, we’ve settled into the inclusion of the Celebration Villa brands, as well as adding a lot of our support staff and really digging into and living in the new structure that we had set into place. Really we’re almost halfway through the year here.
I’m very happy to report we’ve been really doing a good job at hitting our goals, staying on budget, exceeding expectations from within from that perspective.
[00:04:05] Tim: We’re just about a week away from the start of the third quarter of the year, which is kind of crazy. This year is really flying by. In the third quarter, I typically hear from operators that this is when they will grow occupancy.
As you look ahead to the third quarter, do you see that seasonality? Do you expect to have the robust demand you might usually have in the third quarter? And what are you seeing ahead in terms of things leads and move-ins?
[00:04:50] Sevy: I think it’s a really interesting question to discuss today versus when we were talking about this a couple of quarters ago.
One, for the Celebration Villa brand — we did bring those communities in November — we’re up just under 10% from an occupancy perspective, which I think is relatively consistent with what we’re seeing across the board.
What’s working with us right now is when we utilize WelcomeHome and we also utilize Enquire, we utilize OneDay to get those videos out; but when I’m looking across the board at what we have scheduled, it’s all in-person.
The biggest difference between our in-person events today versus pre-Covid is that the majority of our in-person events were scheduled post-business hours, like past five o’clock, even on the weekends. And today, what we found is — because so many more adult children, their actual work-life is more fluid and flexible and so many more people work from home — they actually want the events during the day. When I look at our calendar, it is chock-full of stuff during the day, which is fantastic for us, because it really allows us to highlight what’s happening at the communities.
They can really see the activities that we have, they can see our residents being engaged, they can see the teams that are there on-site because those post hours were always a little bit different, they were after dinner, there were maybe a little bit of this going on, but being able to do that and meeting the timing demands of the adult child has been I think very much an eye-opener, so we’ve been really trying to play to that.
[00:06:47] Tim: This is a good segue into something else I was curious about. Obviously, sales and marketing, that’s a big topic right now. What’s working right now to drive leads and move-ins? It sounds like in-person events, that’s maybe one of those. What other strategies?
[00:07:11] Sevy: I think when you’re looking at your ratios from tour to move in, our biggest thing, and we’ve always utilized [Bild & Co. CEO] Traci Bild’s platform from the beginning.
We are really working that circle of influence when we have people at the community level who are focused in on and very consistent at that, moving them from outside that circle to the inner circle from a referral perspective and really driving them into the communities; working on getting them in and understanding doing that pre-work ahead of time and then getting them in the building. I think that’s probably been one of the biggest driving forces in increasing occupancy most recently.
[00:07:56] Tim: We talked about this just a moment ago as we were bantering before the event started today, but I learned Life Care updated its website and its digital marketing presence. Obviously it’s something that a lot of operators have said is just really crucial to do these days. First off, what did you do on that front? Tell us a little bit more about that change that you made, and generally your philosophy on effective digital marketing in the age of Covid.
[00:08:23] Sevy: It’s funny. If I go back to when we really started in 2009, 2010, we were kind of a younger group coming into it. We were really adamant about not advertising in the phone book. We were like, “I think this is a waste of money. I don’t think this is long-term.” Some of the people we were working with were like, “No, no, no, you have to do it.” I think we’ve always been an early adopter of utilizing the digital attack. We also understood it was going to be significantly cheaper from a money spend.
During Covid, obviously we couldn’t drive people into the buildings, but what could we do? We could drive them to our websites. We spent a significant amount of money on updating the website, we added all brand-new pictures for every single one of the communities. It’s one of the things that we insist on whenever we’re coming in as a new operator. If we’re doing a refresh, we have to wait until we do the refresh, having those up there.
One, we spent a ton of money on search engine optimization. Two, we’ve been working with a company called Digital Wolf. They have been really, really adamant about posting this stuff and to show that engagement.
Where we are right now in the process, I know a lot of companies have been doing this: We had been trying to really find the best way to do those virtual tours, because I do some of them, and it’s all over the place. So, it was really important for us to identify how we could provide a good visual virtual tour without frustrating somebody and needing to have the best internet to make that possible.
Those were probably two of our biggest ones, and then also, as I mentioned, utilizing those OneDay videos and then being able to post those and show those individually as well as out there. But, yes, we needed new pictures. I know ProMatura did an amazing amount of research on what people wanted to see.
Some of it I do believe is as a result of Covid, but I also think that we cannot forget the group that we are marketing to. We’re into a different generation right now, and they are tech-savvy, they are internet-savvy. Boomers do their research. They do have brand awareness, but they really, really do their research, and they rely very heavily on their ability to do that digitally.
[00:12:01] Tim: How much of your operating budget do you devote to marketing?
[00:12:09] Sevy: When we’re looking at it across the board from a PPD perspective, and that’s probably more of how we’re looking at it versus like on a percentage of operating budget, et cetera.
It varies from community to community. That’s one of the things about us at Priority Life Care, we look at things kind of globally in what we have to do from an SEO perspective.
Going back to the Traci Bild model, we also very much look at each community individually really working that circle of influence, really understanding how you’re getting those referrals. I think that is our best spend.
I don’t think we’re spending the money right now to host events. I don’t know how much is allotted for it. The other piece that I think that is a little bit unique in trying to understand, but we’ve seen a significant increase in the cost for pay-per-referrals. I think part of it is, again, going back to the generation, if we’re looking at your adult child who are getting into, some of the X Generation, some of those boomers, they go to the web.
They’re going on those search engines, and they’re going to those pages. We’ve seen an increase I think from that perspective, which I can’t really put a percentage on because in some markets they’re just a little bit better than others, but they’re definitely utilizing those. That’s why it makes sense in certain markets where we can actually pay for those search optimizations to hit it, but as we all know, there’s just some places it doesn’t matter how much we spend. We’re never going to outspend those guys.
[00:13:56] Tim: I’ve talked to some operators who said, “We’re working with new referral sources, companies that have just launched, and we’re trying to create a new model for this.” How do you think about referrals coming into your community these days and how does Priority Life Care fit into that whole piece of the puzzle?
[00:14:36] Sevy: I really think that Covid has just really snowballed a lot of tech for our industry in particular. I think that we’re going to see some really cool stuff coming out. There are some things coming out soon in the next 45 to 60 days. Everyone is going to hear about what our industry is looking for in terms of some changes from our referral perspective.
I do think that going online and doing the research, it’s a natural thing that we all do. It’s very logical to me that people would be doing that in our industry. Now, it’s different because that’s not what we’ve been pushing in the past. We want you to first come in and then find this out prior to, but when we’re talking about our customer base, as an operator or an investor, I think those things have to digitally change.
I think that we have to make more things available to everybody online. I know that we generally don’t like to post pricing online, but let’s be honest, if you like some place and you can’t afford it, why even bother going? I think that’s the wrong way, and I think that has led to some dissatisfaction from a consumer base in our industry. “Why can’t you just tell me the price?”
When you’re talking about health, one of your biggest expenses is where you live. If you can’t afford to live in Beverly Hills, why would you even start looking there? I think that we’re not doing the best job as an industry with setting the stage for what could be in their price range. Why then also go through all of that to then say to the consumer at the end of the day, “Oh, well, you can’t afford it.”
00:16:54] Tim: Do you still sense that people are pretty confused about senior living? Why do they need it, what it’s for, how much does it cost?
[00:17:13] Sevy: One-hundred percent. Starting with how much it costs I think it is really important, because most people believe that until there is some type of a health event that occurs, either with themselves personally or with one of their loved ones, that Medicare pays for this, or that it pays for anything that has to do with their health care in the long term.
Whether that is the decision to go from living in a single-family home, from a multifamily building to living with a loved one; I think the boomers in particular and even part of the Silent Generation that we’re still working with, they want that independence, and the community-based setting gives them some independence.
It gives them independence to continue to be a wife, it gives them the independence to continue to be a mother. And with us not setting the stage appropriately from a pricing perspective, with people not understanding that Medicare doesn’t cover this, I think it has created some frustrations from our industry, and I think that people are getting a better understanding of the difference between assisted living– what you can get from home health, what you can get in assisted living, and then when and why you would need skilled nursing, but what we’ve done a poor job as an industry is really setting the stage for how that is all paid for.
Even when you’re talking about trying to understand how to navigate Medicare benefits, even if you’re just home and you’re a very independent-savvy person, just understanding what those benefits cost is difficult enough, then add onto that some type of a life event, a health event. Now you’re in a situation where you have to make these decisions. We don’t do that when it comes to our own, past retirement, when we’re talking about that, and we don’t talk about it, and I think that that needs to be something that our industry needs to start setting up to help with.
[00:19:52] Tim: Yes, that’s a great point. I want to switch gears here. Let’s talk about the Celebration Villa brand. I want to start with just these communities. Last year, you took on 17 former Eclipse communities for Ventas. What was it like turning those communities around? When you came into them, what was the first thing you did and how did you approach making those into the Celebration Villa brand?
[00:20:29] Sevy: The first thing we always do is we’ve got to say, what are they doing right? We always want to make sure that when we come into any situation, that we aren’t taking something away, that we are only there to add too. One of the very first things that we did, we were really able to identify ahead of time the team that was in place that made sense to continue to stay in place.
We wanted to create some sense of stability for the people at the buildings. It was about to be a huge shake-up. They had already gone through a huge shake-up. They had just gone through Covid. We were really trying to use some EQ to understand how to make everybody feel comfortable that this is going to be a good thing
The very first thing we did is we were really fortunate and had an amazing team in place. It was for the former Elmcroft buildings. What was the culture there and how do we think they would mesh well?
I think they did a very good job of pairing us up with the communities that were in Pennsylvania as well as in West Virginia, understanding the culture that they came from, that we were going to bring a similar culture, that we had this family culture there, and my brother and I, our family, we’re going to get down at the community level. We’re going to get in there and do what we need to do.
I think the second thing is, and this has always been part of our M.O., is that we really do include the people at the building level in decision-making. We get in there and ask. One of the highlights of my career was recently actually visiting, I think I got to 11 of the buildings in a six-day drive by. I did this with Dave, and it was so much fun to go drive around and do all this. What did I do when I went there? Pretty simple. I went around and I thanked everybody.
It was the first time I’d really been able to go into the buildings and see everybody, especially since every time I tried to go, there was Covid.
Then, all I did at the buildings was I went around, thanked everybody, hugged them, and then I just asked two very, very simple questions. One was, “Hey, what do we do really well here?” I did this not just to the leaders. I went into the kitchen and people were like, “You want to know what we do?” They were like, “Oh.” “We take care of our residents really, really well.” I’m like, “I love that. What’s something we could do better?” I really just wanted to hear it. I wanted to hear what we were doing better. I think it really resonated with people.
I think sometimes as leaders, when we’re looking at doing these massive turnarounds and making changes, I think that we need to keep it simple sometimes. I think that our teams are there to do the work, keep everybody on budget and do the training and make sure that we’re giving them the support and the tools that they need, but really just going around and spending the time to listen as the leader leader, I think it’s so much more — and thanking people, just a simple thank you.
I can’t tell you how many people thanked me for thanking them. I’m like, “I’m the least important person here in the company. You are so much more important than me, and I am just here to thank you.” I think that is what has really led to our success in turning things around there.
[00:25:49] Tim: Could you ever see the portfolio growing beyond the 17 communities?
[00:26:16] Sevy: Ventas has been such a great partner, especially for us as a third-party manager, they have longevity in their assets—that’s their goal. For us, we develop these teams, we build up the census, we create profitability. Then, obviously sometimes the play is a real estate play and it’s to trade. To have a partner like Ventas who is in it for a long haul is phenomenal for us because it takes us a while to get the buy-in and to actually get the plan in place.
They really have done a great job in allocating capital for one deferred maintenance and then refreshes. I think that when we talk about middle market, it’s really, really important to understand what that spend is and that you’re doing it frequently enough so that you can stay relevant and so that you can stay competitive, because there’s always going to be something new that comes up, and while from a price point, we may not be considered competitive, it still is something that gets taken into consideration.
They’re trying to understand the middle market. I think we’re having a lot of people, bankers in particular, that want to understand the middle market.
If you really, really want that community, then you probably will say, “Well, I can afford the studio, so I’ll go with the studio,” but if the one-bedroom is important to you and then understanding how far your dollar is going to go, perhaps you need to also understand maybe mom is going to be in memory care soon, and we have the memory care, and can we afford to go into the memory care? Or if we stay in the studio over here and they need to move to memory care, I can’t afford the memory care, and then I’m going to have to make that move.
I think that is a big piece of that middle market. Keeping your buildings relevant, keeping them up to par from a physical perspective I think is one of the things that allows us to say why, one, Ventas has been a good partner and why, if and when new opportunities present themselves for the Celebration Villa brand, we at Priority Life Care are ready and able to do those things.
[00:29:01] Tim: Tell me your philosophy, Sevy, on meeting the middle market and how Priority Life Care does that today.
[00:29:30] Sevy: The biggest piece in the middle market is I can’t offer less wages, I can’t offer less benefits, I can’t say my staffing ratios are going to be any different. I have to have good programming, and I have to offer similar options in terms of access to things.
Again, I think that the rates are especially poised to be able to do that because their basis is already there. They already have these communities, they already have their basis. That mortgage piece, while obviously it’s important, it’s a little different, but the most important part for us when we are evaluating it is really looking at talking to our vendor partners. Our vendor partners are what allow us to do more than just provide the day to days like our dining, et cetera. I think that again, Covid really brought to light the importance of our vendor partners that we cannot do it alone.
It really does take a village. Understanding that while there are a lot of new options out there in terms of technology and vendors, it’s really working with the ones that understand your price point and understand your needs. For instance, we had been working with iN2L for a very long time, particularly in our memory care neighborhoods.
We had been looking at and part of our mission for this year was communication coming out of Covid, being able to communicate in different ways with our family members as well as with our staff was really, really important. We had been evaluating these different engagement tools that could also help utilize and highlight and communicate with our family members.
We had recently taken over a couple of the Poet’s Walk’s memory care communities, two in Virginia and one over in Texas and they were using LifeLoop. We were already talking to the LifeLoop teams and we said these guys loved them. They were so paranoid we were going to take it away. The family members were paranoid, the staff was paranoid, and we were like, “Wow, while we were about to pilot a couple of these, they’re already using them. We already see best use scenarios.”
When they merged with iN2L and were already integrated with PointClickCare, they’re integrated with WelcomeHome. We could very easily utilize our one day. For us, a vendor partner, particularly on the tech side, was fully integrated.
Now, maybe there’s one or two things that they’re not doing yet or we wish that this other product did or that product did, but having something that makes efficiencies for our teams, our staff, and then can fit within our budget, those are some of the ways that we make the middle market work, so we can utilize those now. Maybe this one is a little bit better in class and this one does this, but it all stacks up. Now I have one price point that talks with all of my stuff and is giving me the best bank from my buck.
I think that that’s really what that middle market is. It’s about working with your vendor partners to say, how can I have one so I have less people inputting multiple things which is going to make less work for my team so that we can afford to be able to utilize technology that helps access communication and engagement and calendars and activities with all of our family members and our staff?
Again, my big thing is always to talk to your vendors, understand what they can be doing. How can they be working with some of your other vendors? How do you make things easier for your staff? You cannot have the price point. The price point has to always work. You have to work backwards, I think sometimes. Not that they’re not doing that in the higher-end private pay but it really is just understanding what you can afford to do and still be able to do.
[00:33:51] Tim: Do you have any big thoughts on the topic or any thoughts on maybe how the industry can be more creative to meet all this head-on? I know you just said a lot, but any other thing that you might have left on the table?
[00:35:38] Sevy: I was at a really great conference where they brought in a panel of people who actually live in active adult communities, and they asked them why they chose it. I have to tell you, those are not the people that are in assisted living. They’re not, and they’re not the people that need assisted living for probably 10-plus years.
I think that post-Covid, the environment for assisted living is significantly higher acuity and I think that as a result of that, we also have higher staffing ratios and so the labor costs have gone up just merely because the level of acuity of the individual who’s living and moving into our community is different. I think a recent report also just came out that on average, we used to see 36 months plus, 3 years, 4 years people living in assisted living. I think that people are waiting longer because they can, people are waiting longer because they had to.
I don’t even think it’s a competitor of independent living. It is a true lifestyle choice for people who don’t want to take care of their homes anymore, they don’t want to deal with paying real estate taxes. Honestly, they don’t want to live in a multifamily because they want to be around people. They want to feel safe. That they want to use the pool. They don’t want to worry about the 25-year-olds who are down there drinking with their buddies until midnight. They don’t want to worry about the random people going in and out of their hallways. You know what? I don’t blame them but they also are at a place where they need that assistance like bathing or food, they don’t need help.
Some of them are still working. I think it is an amazing product, particularly for the middle market who can’t afford to maybe maintain the homes that they had and they have an opportunity to sell their home and have some real financial freedom.
I think for the true baby boomer, it’s their dream to have the financial freedom, to have the actual freedom to be around people they want to be around, to be with their grandchildren and their children when they want to be. If they want to pick up and go, they can lock that door and not worry about it. I think it is different than any retirement situation has ever looked like.
If we know the boomers, they need to have something that is theirs, unique, and different. It can’t look anything like what their parents’ retirement looked like. To be honest with you, I think that the sector has real stickiness because our generation, me and you, we think our parents are cool. We think everything they’ve done is cool. We listen to their music. We go to the same places they went to. We want to relive some of the cool stuff that they did. We dress like them. The generation prior wanted nothing. Everything needed to be different.
Creating this sector and making sure that there is the higher end, there is the middle-end, and there is a more affordable end is going to be very important for it going forward.
Now, I think that from a middle-market perspective that it is important because of the price point, that is going to come probably 10 years down the road or eight years down the road. How are we going to meet them there to help them stay where they want to stay, but at some point, that care needs to advance beyond home just like it does today.
It’s very limited what we can do with home health. There’s a lot of new cool technology that’s coming out that’s going to help. I have multiple people in many, many of our communities are well over 100 years old, moving in post 100 years old. The likelihood in the next 10 to 15 years of people living well into their hundreds, past 110, is super high but the needs are going to be high. They’re not going to be living as an active adult at that point. They’re probably not going to be living an active adult most past 85, unless there’s like some other health instances.
Do we still have a long way to go in the middle market? Yes. I think that LIHTC is going to continue to help serve things that are making it like income restricted based on the MSA. I think the government’s going to have to pick up a little bit more to help meet those needs. Nursing homes just can’t do it. It’s just too expensive, but we’re going to have to.
A Medicaid waiver is one thing, but that’s when you’re on this side of it. We really need to have those. We’ve been doing it in multifamily for decades in terms of making things that are income-qualified and based on where you’re living. We have just not really cracked into that very well, I think, from that perspective.
It can’t just be Medicaid based, and right now the LIHTC world, that’s pretty much the only one that is making sense for it. It’s going to take a lot more, I think, interactions with our national more federal government and less on the state levels from that perspective. In the meantime, the cost of construction is going to make it tough to build new for those things, for that price point.
[00:41:32] Tim: Yes. That makes sense. I want to loop in a comment we got from the audience. This is a comment and a celebration to Sevy and PLC leadership and caregivers for being a leading senior living operator in a challenging market. Their success is contagious when you have intelligent strategic leaders like Sevy, so kind words from our audience today. It sounds like people are enjoying it.
What technology are you seeing right now that’s out there that’s catching your attention? What do you think is cool and dare I ask, is there anything that you think is maybe a little overblown?
[00:42:35] Sevy: Well, one, I love technology. I love low tech, I love high tech, but first and foremost, when it comes to understanding the technology while I might witness some like you said, I always go back to our teams because when we go into the communities, one of the first things that we say is most people think I’m here for the residents. I’m not here for the residents, I’m here for our staff, I’m here for our coworkers, I’m here for our teams because I want them to be there for our residents.
When it comes to technology, the very first thing that I always say is what’s going to make their life easier. When I go back to LifeLoop, for instance, one of the things that I loved about it is that it’s making our teams easier. Why? Because of its integration with PointClickCare which we use.
Our team and Welcome Home, at very first, all they have to do is they input the information in the lead generation. Once it clicks over from being a lead, it goes into moving in, now it’s in the PointClickCare, now it’s in the light, it’s already in that.
For me, any utilization of technology where it’s already integrated, it’s less work for somebody. I think part of the problem with technology right now it’s that technology is my biggest concern, it’s also the thing I’m most excited about.
One of those issues is for instance, in Pennsylvania, I can’t use Alexa in our buildings. I can’t use SafelyYou in our buildings because it is illegal to have these cameras throughout. It’s the thing that I’m most concerned about because we have so much going on in technology that I think can be outrageously helpful to our staff, and labor is our biggest expense right now. It’s the thing that’s keeping all of us up. How, if you look historically throughout time, have we combat a labor cost issue? Technology.
Look back at the industrial revolution. Look at the invention and the birth of the automobile, look at even what McDonald’s did. If you’re looking back at when labor really fed into and hurt the margins of a business, technology exploded.
My concern is, unlike the other industries, the regulatory environment that our states have on our licensing, it is impeding our ability to really adopt and utilize that technology. We have to be sitting at the table with these policymakers. As an operator, as a tech vendor, as a partner, get involved with Argentum, get involved with ASHA, contribute to your PACs. If we don’t do it, it’s never going to change.
I think that our biggest opportunities are in technology. I think that, for instance, we’re utilizing Arena [Analytics]. [CEO] Mayra [Norton] is such a rockstar by the way, can I just say, a mathematician woman-led company, and here we are, this is something we’re just starting to adapt to, we think we need more applicants.
This is saying actually, you need less just quality, it’s quality over quantity.
That’s next level futuristic stuff because I think the industry wins when we do that better. I think those kind of technologies are the ones that I get real excited about because I think we all think robots and cameras, and while that stuff is cool, I think we’re decades away from being able to utilize other than the robot that can keep your food warm and put it out there, make it a little easier. Real AI robot interaction, I think that’s a little bit further away. Again, I just don’t think the regulatory environment is going to keep up with that unfortunately.
[00:47:42] Tim: What is staffing right now for Priority Life Care? Has anything gotten easier and what’s working to recruit people?
[00:48:13] Sevy: One, I agree. I think that it’s leveled off. I don’t think that the sky is falling anymore. I think that we’ve leveled off into what we actually like and what our new hourly rates are. I think that we’ve leveled off in the places, the areas or communities where we had historically had agency problems.
We still have agency problems, but for the most part, agency has been eliminated in any of the areas that we really didn’t have those problems prior to the pandemic. There are certain areas that just are more challenging in recruitment and retention given where they’re just geographically located. I don’t know that it has anything specific to do with our industry in general.
One of the things that I think is most interesting and I’m curious to hear what other people think is we are now budgeting the ED position, that market is still outrageously competitive and not just in assisted living, but also in the nursing home world, and whatever we are budgeting for for ED, we are finding that we have to go up 20% to meet it because the demand is so high.
I think that the ED position has always been very important. I just had a conversation with somebody recently about this. We’ve always been looking for people from the ED perspective to grow up through our community, and we’re going to continue to do that and training is, I think, a key of that and finding those leaders. One of the things that I think that we’ve been doing wrong from a mind frame perspective is we expect we find this great ED and that he/she is going to stay in that position for all of time. We don’t want them to leave, we expect they’re going to stay there.
I think that’s unrealistic for us. Who would take a job that has zero opportunity for career advancement other than just making the extra money every year? I think that we’re finding that that’s probably the most difficult and we’re probably as an industry need to do a better job of showing the ED once you’re here or once you get to that, that this isn’t the ceiling that you’re going to have more opportunity.
[00:50:26] Tim: Let’s talk a little bit about the future. As you look out to the next 12 months, how do you expect the recovery to play out? What are you preparing for over the next year?
[00:51:11] Sevy: I think that from a pre-pandemic occupancy perspective, we’re getting there. I think the difference is pre-pandemic margins and that’s because expenses have gone up. I think it’s going to take us another year or two to pass on those rate increases so that we can start to meet those margins back there. It’s going to take a couple more years in my opinion, but we can’t hit everybody with 10% increases. We have to inch it along and we have to take that into consideration.
[00:51:40] Tim: I’ve heard that some operators now are prioritizing sales, selling value with the intention that, “Hey, in the future your rates are going to go up, we want to show you the value of this community and why it’s important that you live here.” Is that something that you’re doing in your sales operations, showing people the value of senior living?
[00:51:59] Sevy: I think we’ve always had to do that in the middle-market, and really explain the difference between what it’s going to cost you — not just from a price perspective, but just from a lifestyle perspective as the adult child as well as the individual. We’ve always been selling from that perspective.
[00:52:17] Tim: You are an advocate for women in leadership in senior living. How do you think about diversity, equity, and inclusion at Priority Life Care and how do you actually turn those words into action?
[00:52:40] Sevy: I couldn’t be more excited about our industry right now. I think that when we’re talking about the future in senior housing, the future is female.
Think about it, we’ve got [CEO] Debbie [Cafaro] at the head of Ventas, we have [CEO] Wendy [Simpson] over at the head of LTC, we’ve got Talya Nevo-Hacohen who’s the CIO over at Sabra, Kristi Gaines is the CFO at NHI. We have [President and CEO] Brenda Bacon over at Brandywine, [Belmont Village Senior Living CEO] Patricia Will, We have [Founder and CEO Lynne Katzmann over at Juniper.
All these amazing women are leading the way. And by the way, they’re all getting asked to speak on panels, we’re seeing them on podcasts. I think that there’s just so many great things happening that they’re actually getting that seat at the table.
I’m super excited that Argentum now has this Women in Leadership program. Colette’s been doing an amazing job with getting these panels out, Lynne Katzmann has one later today. They’re making a presence at the different conferences. We’ve started a senior housing women’s initiative, which is an actual 501(c)(3) led by Kathyrn Burton Gray. Lori Alfred is also involved, other people from the debt side — Melissa Russell.
Part of that is really to be something that’s more encompassing to support the advancement and the inclusion of women as well as professionals in senior housing. I think that when it comes to inclusion and diversity, that’s really what this is about. We have to start having these conversations. Especially post-Covid, we’re working from home, we’re juggling our children, we’re all dealing with this.
At Priority Life Care, we just on June 1st implemented a new support program called Maven, which is specifically designed around providing 24-hour support. It is a combination of telehealth and app-based information for every single person for free at our company. It helps if you want to do counseling with you and your spouse, it offers support and counseling for a child who might be struggling with behaviors, it helps with identifying and figuring out how to afford childcare, iIt helps if you are having postpartum issues. It actually also has assistance and support for people who are trying to become pregnant or are pregnant.
It’s brand-new. I learned about it from a friend of mine who is in Silicon Valley and we’re the first to implement it here in seniors housing.
We made a three-year commitment to do this, so I’ll have a lot more data for you next year, but really what we were talking and listening to people in the field, and really a lot of times we know that we have a staff that’s 85% female.
We know between 40% and 50% are single moms, and so how are they dealing with this? Historically it’s been their adult parents that have been helping them, or their children are in school. This whole landscape has changed. When we’re talking about what they’re dealing with at home, whether their kids are being cyber bullied or struggling with their schoolwork, we are asking them to forget those things when they come to work so that they can help be present for our residents and for each other. But as a working mom, I’m struggling with my own day-to-day. I was really excited that I took a shower this morning to get ready for this that was uninterrupted. That was a win for me.
We can’t forget those things as leaders, and when somebody comes to work and they’re late, our first response shouldn’t be, “Oh my gosh, you’re late and this is it, and you’re getting written up.” It should be, “What happened? Tell me what happened.” If we can’t show that empathy to our coworker, to the person that is supposed to be comfortable with reaching out to us as the leader, how can we expect them to do that for our residents?
[00:57:31] Tim: I would be remiss not to ask you about the future of Priority Life Care. I should have asked you this at the beginning but how many communities do you guys have these days? Where do you think you’re going to grow this year?
[00:57:49] Sevy: We have about 40 communities right now under our management. My goal is to grow so that I can give the people at our communities and the people within our organization more opportunities. That’s my goal for them. I would love to continue to grow with the right strategic partners, institutional investors who are committed to our industry; and also continue to grow in support with other supportive technologies and other supportive services. I think that’s really where we’re leaning toward.
[00:58:29] Tim: Any quick, lightning-round advice for other operators on what they should be doing to raise all boats right now?
[00:58:43] Sevy: Collaborate. Talk to and make friends with other operators. Don’t pull that kimono in, share the cards. I think that we win as an industry when we know what each one of us does well. Don’t think of the person down the street as your competitor, think of them as your collaborator. If a person doesn’t move into your community, they’re going somewhere else.
How better can we be a resource to one another? During Covid, we came to everyone’s aid when somebody wrote something bad in the media about us. Let’s stick to that. Let’s not, whenever somebody says something bad about one of our competitors, say, “Oh yes, I heard that too. I heard they were bad about this.” Go talk to the other person and say, “Hey, I want you to know what somebody said. You need to be able to either combat this or face it head-on.” Collaborate, share, we’re only going to get better as an industry if we can do that.
[00:59:47] Tim: Well those are fantastic words to end on. Sevy Petras and Priority Life Care, I just want to thank you both for a great discussion.
[01:00:26] Sevy: Thanks, Tim. I’m always happy to be on and it’s always a great conversation.