Brenda Connelly and Erin Shvetzoff Hennessey have dedicated nearly their whole lives to senior living and care, and they both believe the sector has reached an inflection point.
“We’re just entering a reinvention stage,” Connelly told Senior Housing News at the recent National Investment Center for Seniors Housing & Care (NIC) conference in Washington, D.C.
Connelly began her career in the field at the age of 16, as a water girl in a nursing home. About two months ago, she was named president of The Springs Living. The McMinnville, Oregon-based provider has a portfolio of 20 senior living communities across Oregon, Washington and Montana.
Shvetzoff Hennessey traces her roots in the sector back even earlier in life than Connelly — to before she was born.
“My mom’s baby shower for me … was in the activity room of a skilled nursing facility,” she told SHN at NIC.
Skilled nursing is especially meaningful to Shvetzoff Hennessey, but in recent years she has led a rebalancing of HDG’s portfolio toward private-pay senior living. Five years ago, HDG’s operations were about 90% SNF and 10% private-pay senior living. Today, that is closer to an even split across a portfolio of about 30 communities in seven states.
This shift has called for some hard choices, but Shvetzoff Hennessey believes that such decisions are necessary because, as she put it, “The world is changing.”
‘You have to love problems’
Connelly is thinking big about how senior living needs to be reinvented, in order to engage the rising generation of older adults while still serving current residents.
These are just a few of the changes she sees on the horizon:
- New community designs
- Engaging more with older adults beyond the walls of the senior living community
- Fostering more purpose-driven lifestyles, so residents “have authorship in how they live”
- Continued emphasis on technology to streamline operations and engage residents
- More robust data analytics to become a provider of choice within the health care system and prove quality to consumers
Several of these shifts are already in evidence at The Springs. For example, the company is elevating building design in a 12-story community under development as part of a 32-acre master planned project on the Columbia River in Vancouver, Washington. On the tech front, The Springs has deployed robots in its dining venues.
And given current labor challenges and Connelly’s career trajectory, it’s no surprise that she is also highly focused on workforce development and engagement.
From being a water girl, Connelly became a certified nursing assistant (CNA), then went to nursing school. She knew from the outset of her career that her heart was in senior care, and she rose through the ranks in skilled nursing. She became a director of nursing and also oversaw operations for a large continuing care retirement community (CCRC) in Fargo, North Dakota. Twelve years ago, she moved with her family to Montana and started with The Springs Living, as executive director of The Springs at Whitefish.
“Having started as a frontline worker … the projects that I work on that bring me the most joy are the ones that [involve] collaborating with all levels of the organization and truly listening to what the most important people in our company have to say the problems are,” she said.
In particular, she draws satisfaction from hearing feedback from frontline workers that their feedback or ideas made a positive difference in operations. Engaging workers in this manner has never been more important, given the severe labor disruption in the wake of Covid-19. And soliciting honest input from workers is not easy, demanding that leaders “love problems,” Connelly observed.
“You have to love problems and celebrate that, so that people will feel comfortable bringing them to you and … you have the energy and excitement about solving them,” she said.
Connelly also is focused on “making life better” for frontline caregivers, and this has informed an “overhaul” of the employee experience, with new programs and tools to recruit top talent while boosting retention.
Reevaluating wage rates has been a key part of this effort. The Springs awarded larger than average merit increases over the summer and has been adjusting wages internally to ensure “equity,” so that wages for existing staff keep pace with the pay rates that new workers are able to command in the current market.
“We’re not waiting to have competitive wage discussions until someone is leaving us,” Connelly said.
The labor force has changed in some fundamental ways, Connelly believes. In particular, she pointed to the rise of workers with a gig economy mindset — they want flexibility in when they work, and they want to get paid immediately.
But Connelly also sees a “core group” of senior living workers who want to have a strong and consistent relationship with their employer and with the residents they serve.
“There is no one-size-fits-all anymore,” she said. “And it is such an employee market that unless an operator has many different mechanisms to retain people and source employees from different places, we will not survive.”
Despite these challenges — and high stakes — Connelly is upbeat about the future. She believes that future leaders can arise from the frontline, benefiting from the same sort of mentorship and opportunities that she has had.
“I had some early mentors in my life that saw potential in me and believed in me probably before I even did, and that was really impactful for me, to have women leaders saying, ‘Brenda, you can do this,’” she said. “You’d be surprised how many of us who are here would love to grow and cultivate future women leaders in the industry.”
And while the path toward a more stable workforce — and broader senior living reinvention — will not be easy, she does not fear failures along the way.
“The best moments in my career have come out of times when it has not worked out, when something has failed, and we come back around again and make it better and strengthen it,” she said.
Everyone at the table
As Shvetzoff Hennessey considered HDG’s strategy after she became CEO in 2018, the difficulties of the skilled nursing business were impossible to ignore.
Tight margins and uncertainty over Medicare and Medicaid reimbursement, as well as regulatory complexities, have long been issues for SNFs — and she also saw assisted living taking market share from skilled nursing.
As a result, the AL operating model was changing, with acuity on the rise. While some providers were — and are — concerned about serving a higher-needs AL resident base, Shvetzoff Hennessey has viewed this as an opportunity.
“When I looked out at what made a great senior living operator, it’s now becoming more regulated, it’s becoming higher acuity … and high staffing,” she observed. “We’re good at all those things.”
So, HDG built a bench on the hospitality side, bringing in experts in dining and resident services, strategically creating a private-pay offering rather than “just throwing our name on an assisted living,” Shvetzoff Hennessey said.
The company also has engaged in dealmaking to restructure its book of business, growing its large consulting practice while rebalancing its portfolio of managed communities to a more even split between senior housing and skilled nursing.
Doing so has demanded some tough choices, including the decision earlier this year to sell two skilled nursing properties. Though the price was right, one of those SNFs held special meaning for Shvetzoff Hennessey.
“One of the ones we did divest was where I started working when I was 19, and my grandma lived there for many years while I was the ED,” she said. “That one was emotional.”
For Shvetzoff Hennessey, a long tenure in the industry has made the business personal but also has given her a broad skillset across many levels of care. While many other companies stick to a narrow focus in terms of acuity or geography, HDG manages and consults across all care levels and has a diverse portfolio of communities under operation, from a 30-bed SNF near the Boundary Waters in Minnesota to a 250-unit campus in Texas. The company has ownership in some communities and third-party manages others.
Shvetzoff Hennessey believes that being able to work across care levels and effectively interface with other parts of the continuum, including hospital systems, is increasingly important. Value-based reimbursement models and the stresses of Covid-19 have created more pressure for integrated health care for older adults.
“It’s this big ecosystem we’re part of in senior care,” she said. “It’s not a solution where the hospital can just push people out anymore — it has to be everyone at the table.”
Once at the table with hospitals and other players, those discussions include how to support staffing in post-acute and senior living settings, how to diversify the patient profiles that senior housing and care communities can serve, and what payment arrangements can incentivize and reward all parties fairly.
Staffing of course is a major pain point at the moment, not only creating bottlenecks in the flow of patients from hospitals to senior care, but even limiting occupancy growth.
“We’ve gotten in situations where the cost of agency has gotten so high that it’s actually more profitable to shrink occupancy, which is different than all of us have ever been taught, which is everything’s about occupancy, occupancy; well, at the end of day it’s really about cash and operating income,” Shvetzoff Hennessey said. “So we purposely shrank capacity at one of our really large communities, because we were able to run it without agency and we had better quality outcomes.”
As a leader who served on the front lines — like Connelly — Shvetzoff Hennessey said she is highly attuned to the needs and desires of these workers, and is focused on all the elements under HDG’s control in meeting current labor challenges.
“What we control is paying as high as we can to still be a feasible business, treat our employees well, and work on retention, engagement, satisfaction,” she said. “We do same-day pay. We really work on our hiring process and employee appreciation.”
Granted, there are many factors that HDG cannot control, from Medicare and Medicaid reimbursement rates to overall U.S. labor market participation. But, Shvetzoff Hennessey has an optimistic outlook, and shares Connelly’s confidence that today’s problems — however thorny — can be solved. Living and working through Covid-19 cemented this perspective.
“Covid was unpredictable and stressful because you didn’t know what was coming,” she said. “Now, all of us … are business people. We can solve these problems, and it’s not as frightening.”
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