Accelerating Move-Ins Drive Memory Care Optimism as Costs, Staffing Remain Top Issues

With a recent quickened pace of move-ins, the memory care segment of senior living is gearing up for a potentially years-long period of growth and high demand.

Operators are preparing in the second half of 2023 by prioritizing growth, programming, technology and cost efficiency.

The impact of rate increases, broader factors like cost inflation and interest rates make the next 6 to 12 months critical for memory care operators.


“We had a great 2022 that led to growth opportunities for us, but then it slowed down. I think there was a lot of built-up absorption that got absorbed,” Anthem Memory CEO Isaac Scott told Senior Housing News.

Still, the trends are headed in the right direction, albeit not as quickly, he said.

“Occupancy is coming back slowly — and I underline the word slowly,” Scott said.


He added that the goal is to get Lake Oswego, Oregon-based Anthem’s portfolio stabilized in the next 12-18 months, which he said is at an 88% occupancy rate per building.

Anthem is preparing for the future in part through growth, including taking on a 9-property portfolio of memory care communities in 2022 that were previously operated by Sinceri Senior Living.

Anthem is not the only company growing or adapting its operational model for a new generation of memory care residents. Memory care upstart Bella Groves is preparing to open the doors on a second community a year and change after initially launching its first, according to Founder and CEO James Lee.

Meanwhile, operators including Aegis Living are revamping programming and training for residents and staff.

Memory care move-ins accelerate

Move-ins accelerated for memory care units in the last 30 days, according to a newly published NIC Executive Insights survey.

More than half of operators in all care types — 56% in assisted living and memory care and 52% in independent living — responded in the survey that they saw an acceleration in the pace of move-ins in April.

Needs-based settings like AL and memory care have seen plenty of demand since the start of the pandemic, which is likely why they were most optimistic about the occupancy recovery timeline ahead.

About 40% of memory care and 41% of assisted living operators anticipate occupancy recovery in 2023. Even so, only about a quarter of operators anticipate occupancy to recover to pre-pandemic levels in 2023.

Operators’ ability to make debt service payments is a big concern for the industry in 2023. Even so, 41% of memory care operators told the survey organizers that current operational headwinds did not impact their ability to service debt this year.

About half of the memory care operators reported that the higher cost of debt is having a “significant impact” to their development pipelines.

That hasn’t stopped Bella Groves from forging ahead with its long-term growth plans, which include growing both its footprint and its membership-based resource and training business.

“We’re starting to meet with initial clients for our Dementia Navigator service,” Lee said.

To date, Bella Groves has leased up 19 of 32 units in its first community.

“We anticipated that it would take 18 months to lease-up, with about half coming in the first year and the second half coming in the following six months,” Lee told SHN.

Scott said that Anthem is planning to capitalize on new opportunities in the next six months, particularly among memory care operators looking to exit the space or developers looking to expand their portfolio.

While Anthem has in the past developed large portions of its portfolio, it has also added buildings through acquisitions. Both are possible in the coming months, according to Scott.

“What’s that number going to look like in the next 12-18 months? I’m not quite sure,” Scott said. “I would say it probably looks like somewhere between eight to 10 buildings.”

For Bella Groves, that number would be a good endpoint for its operations business, according to Lee. He wants the industry to shift its mindset to one of knowledge and care.

“Our industry has tried to figure out how to monetize our units as effectively as possible,” Lee said. “The change that we need to make is how do we monetize our knowledge as effectively as possible.”

Scaling is not the only way memory care operators are preparing for the new era of demand. Aegis Living, for example, is prioritizing programming for its residents and training for its staff, according to VP of Clinical Health Services Schekesia Meadough and VP of Life Enrichment Chris Corrigall.

Insurance, labor drive costs

After the Covid-19 omicron variant led to cost explosions for senior living operators in 2021 and 2022, they are still playing catch-up in 2023 as they seek to cut down on the use of agency staffing and become more efficient elsewhere in operations.

So far, rate increases have been a vital tool in those communities’ expense-fighting toolbox.

“Has the cost of our food gone up? Yes. Has our cost of goods gone up? Yes,” Scott said. “But, we have been able to overcome those with rent increases.”

Even so, he added that labor and insurance costs are still outpacing rent increases in 2023.

New data shows the industry is likely making progress on the labor front. Health care was among the sectors that added jobs in the U.S. Department of Labor’s latest jobs report, while labor agencies were among those that cut jobs.

Last summer, 72% of memory care operators told NIC researchers that their liability insurer raised rates, and 19% reported the increases were “significant.” Liability insurance weighs heavier on memory care operators due to falls, which are still a top driver of paid insurance claims in 2023.

In a report by Marsh earlier this year, more than 75% of all insurance claims paid by an operator were the result of a fall. The cost of fall settlements amounted to an average just under $190,000 over the past decade.

But the biggest expense for high-acuity operators is still labor, which is why Anthem spent the last year focused on trimming those costs, according to Scott.

Scott told SHN that Anthem’s year-over-year use of agency labor dropped by 54% from Q1 of 2022 to Q1 of this year, with rates declining each month since last summer.

Although staffing headwinds are not quite as fierce as they were a year ago, pressure is ramping up to find long-term solutions to an old industry problem.

“I think we do an excellent job providing care from a psychosocial and a clinical perspective, but we are seeing the aging population increase so we need more caregivers,” Aegis’ Meadough told Senior Housing News.

Aegis’ focus has been on retention, which the company’s leaders believe will improve as training improves.

“We are doubling down on our training initiatives to make sure that not only our frontline staff, but our directors are receiving refresher courses on dementia,” Meadough said.

Tech as programming and care

Technology is a cornerstone in many memory care operators’ ability to offer the kind of care and services residents want. In 2023, memory care operators are wielding a wide variety of tools, everything from fall-detection to high-tech sensory experiences and virtual reality.

On the consumer side, Anthem’s Scott remembers when a plasma TV cost thousands of dollars and was prohibitively expensive to purchase.

“Now you can get them for 150 bucks at Costco,” he told SHN.

To Scott, the rapid proliferation of new and advanced technology means that operators must be prepared to offer the same kind of tech in their communities.

While the newest tools are expensive now, Scott believes that those companies can expect competition that will help operators.

Aegis makes use of an interactive video engagement tool called Obie, which has found adoption in other communities as well.

Obie works using a ceiling-to-floor projector equipped with infrared sensors that track movement. Users can interact with items like bubbles, sand, flowers or baseballs and move them with their hands as though they were real physical objects.

“What’s really difficult in memory care is how to cater to patients who are maybe further along in the dementia cycle – they might, at times, look a bit like a wilted flower,” Corrigall said.

That term, “wilted flower,” is one he uses in dementia training courses for Aegis staff. It refers to patients with dementia whose disease has progressed enough to significantly alter their cognitive and physical ability.

Technology like Obie is for them, Corrigall added.

The rapid proliferation of technology is at times hard to track. But it is providing new ways for operators to stand out from their competitors, according to Scott.

“There are a lot of opportunities out there for folks to potentially prolong their stay in an assisted living community – and technology is certainly assisting them with that,” Scott said. “But that provides an opportunity for us to up our game.”

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