Faith-based senior living nonprofit Bethesda Senior Living is nearing a full turnaround from the Covid pandemic. With recovery close at hand and a new operational leader on board, the organization is now thinking about its next chapter of growth.
According to CEO Dana Rasic, the organization’s average occupancy rate has grown at a faster pace this year compared to the prior two years. At the moment, the Colorado Springs, Colorado-based nonprofit is averaging in the low 90% range for occupancy, indicating a 4.5% increase over the course of the year, he said.
The organization also recently announced a new chief operating officer, Kimberly Erickson, who is slated to fill the role following the retirement of current COO Rick Summers in November.
“Her background offers a different lens or a different viewpoint than what our current leadership structure does. Most of our leadership team comes with nonprofit experience,” Rasic told Senior Housing News. “Kimberly will bring a more recent view of how the two different sides of the industry view the need and the offerings that can be made to the senior living community at large.”
With a new leader on board and positive momentum, Bethesda Senior Living is planning out its next steps. The organization has plans to continue focusing on recovery and building out its offerings for residents as well, with campus expansions and extending its continuum of care to include an independent living component.
Bethesda currently has 24 communities and over 2,000 units of senior housing, making it one of the top 50 largest nonprofit senior living providers in the country according to the LeadingAge-Ziegler 200.
‘Sales blitz’ aids recovery
To recover occupancy lost during the pandemic, Bethesda used a “sales blitz” approach in order to bring in new residents for its independent living offerings. The organization also reevaluated its independent and assisted living offerings in key Arizona markets.
“We had a few properties that operate at a more affordable level … they struggled in occupancy,” Rasic said. “We modified our offerings at those three locations, made sure that we got our pricing accurate and then set out on a campaign so that everybody in those markets would understand what we were offering.”
The organization pivoted from assisted living to active adult and independent living with an affordable price point by renovating its Glendale and Youngstown communities.
Under the model, independent living and active adult residents pay a base rate and can purchase additional services including meals, housekeeping and transportation. The organization has partnered with provider Curana for additional services, which are paid for under a value-based arrangement.
Using that approach, the company has successfully grown occupancy in markets in states like Arizona, where the company’s communities grew from a 73% average occupancy rate in January to 99% at the end of August.
Looking out through 2030, Bethesda is going to be largely focused on campus expansions, as the organization has a land bank with a few of its locations that were purchased and held for years. The organization is mulling adding product types such as memory care either as standalone buildings or add-ons to existing assisted living communities. The organization also is planning to potentially add independent living cottages in order to supplement existing offerings.
For now, the organization is seeking additional growth in the form of acquisitions, particularly in markets where it’s looking to build out regional operations, such as the Dallas metroplex and Kansas City, Missouri.
“We’re looking to fill out those regions, unless there would be a nonprofit affiliation opportunity in a different state – but we would still keep it very regional,” Rasic said. “We’re thinking about two-hour flight times from the home office.”
‘Can’t take our foot off the pedal’
With a new COO and Covid recovery nearly complete, Bethesda Senior Living has the wind at its back looking ahead to 2025, according to Rasic. If the organization was a car, it would be moving full speed ahead – and Rasic said Bethesda “can’t take our foot off the pedal.”
“We can’t slow down in the race because we think we’re winning,” he said.
The organization will continue to focus on sales, occupancy, staffing and margins into the new year. So far, margins have improved by “a couple of percent” throughout 2024, Rasic said.
Bethesda is looking to selectively trim the fat where it can, without compromising quality or other resident-facing programs, amenities and services.
“It’s the fight for simplicity,” Rasic said.
Bethesda has improved staffing over the past year in part by focusing on recruitment. Rasic said the organization has been able to reduce its reliance on using staffing agency workers by 80%, with further reductions potentially coming down the road.
Rasic said he doesn’t believe the industry will fully recover from the effects of the Covid-19 pandemic by the end of next year due to the current economic pressures facing the industry, particularly in regards to food costs, increased utility costs, inflation and the increased costs for building maintenance and upgrades. The costs have been escalating at a rate faster than most middle market senior living rate increases can afford, he said.
Because of these pressures, Rasic added he believes there will be continued affiliations and consolidations on the nonprofit side of senior housing in the coming years, especially with smaller family-owned organizations and single site operators.
“If you’re part of an organization that doesn’t have scale, and the pressures of margin compression or agency usage or lack of labor and resources, those can become overwhelming,” Rasic said “We’re seeing that consolidation within the nonprofit side of the industry and I do see that that will continue through 2025.”
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