In 2021, Adam Marles joined senior living operator Lutheran Senior Services (LSS) as President and CEO. Since then, the organization has been on the move with a new strategic framework and a growth plan focused on a changing customer demographic.
Today, the St. Louis-based organization has eight life plan communities, nine affordable housing communities and a suite of home- and community-based services. In 2023, the organization’s budget was $232 million.
Marles has helped reshape the organization since coming aboard less than three years ago, including by initiating a strategic review process.
He also has helped the organization manage a transition away from skilled nursing and into more traditional senior living services such as independent and assisted living. And last year the organization kicked off a three-year deep-dive on memory care with an interdisciplinary task force meant to help it become “best-in-class serving people in all settings as they live with dementia.”
As the organization embarks on operations in a new year, Marles said the target will remain on helping the organization evolve to meet the demand of an incoming senior living resident.
“For us a laser focus right now is making sure that we have sustainable communities for the long-term, recognizing that boomers’ demands are going to be so much different than our current consumer,” Marles told Senior Housing News.
Preparing for the ‘future of our business’
Senior living operators know it all too well: As the baby boomers age into senior housing, they are bringing with them a new set of preferences than the previous generation. It is thought they will desire flexibility and affordability in care while avoiding settings that are too clinical or hospital-like.
A decade ago, LSS dove head-first into short-term rehab, even renovating “huge parts of our buildings” to accommodate short-term stay units.
“Shortly thereafter, we realized that that wasn’t going to be the right direction,” Marles said.
So, the organization in the pre-pandemic years began to shift away from short-term rehab and more toward the kinds of products and services that tomorrow’s older adults will want.
The quest to meet changing preferences is reflected in the organization’s recent projects. For example, the organization acquired a 200-bed nursing home in 2013, and is currently engaged in downsizing the skilled nursing units to just 35. In their place, the organization is adding in assisted living and memory care units. The organization also added 153 units of independent living community in 2021.
At another community, LSS is converting a 60-bed skilled nursing facility into a new assisted living and memory care neighborhood.
He added that, as the organization builds new functionality into its portfolio, it is aimed at delivering a comparable service to all residents and served older adults, no matter where they live.
To that end, LSS is further deepening its focus on home- and community-based services. In December, the organization announced the acquisition of St. Louis Home Health, a home health agency based in St. Louis with a specialty in orthopedics and a footprint in the neighboring state of Illinois. The agency augments an already long list of LSS’ provided services that includes private-duty home care and home health, hospice, rehab, palliative and care navigation services.
“For us, it’s trying to figure out how much we can safely provide … while honoring people’s wishes to be where they want to be,” Marles said. “That’s the future of our business.”
Home health and home care are also ways to help reach the millions of middle-market consumers for senior living.
“We are actively working on … how we can construct a sliding-scale product where the middle-market can have access to services to stay safe and healthy and engaged at home,” Marles said.
Much of the company’s current growth and evolution has been informed by a strategic framework the organization rolled out last summer. The company has set goals relating to four main categories: Culture, evolution of product and services, growth and financial sustainability.
As it has grown, LSS has seen occupancy dip and then rebound during the pandemic. The organization’s overall occupancy rate is about 90%, Marles said.
Although the organization is in “good shape” with regard to occupancy, he said staffing has proved to be a persistent issue. Nursing, housekeeping and dining workers are still hard to come by, and Marles said the organization is continuing to invest in benefits and higher compensation for workers as a result.
“Assuming the last quarter ends up like the first three quarters, we will have better turnover numbers this year than we’ve had in four years,” he said. “So, we’ve basically returned to the pre-pandemic baseline.”
A ‘pivot year’ in 2024
Although the news of the home health acquisition is not long behind it, LSS is gearing up for even more growth in 2024. In fact, Marles said he hopes the coming 12 months will amount to a “pivot year” for the organization as it builds on strong occupancy rates.
The company in 2021 acquired an assisted living and memory care community across the street from one of its life plan communities, and Marles said other acquisitions are on the table for the organization in the year to come.
“We’re looking at acquisitions, if it makes sense, and we’re absolutely interested in collaboration and partnership,” Marles added.
Another avenue of growth is through repositioning projects like the ones LSS is undertaking to swap out skilled nursing for senior living units.
LSS also is considering affiliations with other nonprofits, should opportunities present themselves. That is taking place amid a larger trend of non-profit senior living operators across the country considering joining forces to confront the challenges of tomorrow.
Among the organization’s new projects underway is an affordable housing community in St. Louis being developed in partnership with a local organization focused on “responsible development” and other socially minded services.
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