A Realistic Look At Your Senior Care Operations

A Realistic Look At Your Senior Care Operations

For over two years, our profession was focused almost solely on preventing and managing the spread of COVID-19 in our communities. This was absolutely the right focus, given the impact of COVID-19 on seniors and senior living communities. However, as the impact of COVID-19 lessens with vaccination and weaker variants, the labor challenges remain at crisis levels, and stimulus funds running out, it is time for a fresh and realistic look at our senior living and care operations.

It is imperative that senior care leaders accept the new reality of census decline and expense increases to lead their communities into a realistic and sustainable future. This process must include three key elements:

1. Accepting Census Reality

Census across the continuum declined significantly with a sudden drop in March and April of 2020 with the stop of elective procedures, the slowing of family decision-making, and the growth of consumer fears when the COVID-19 pandemic hit the United States. Occupancy rates hit pandemic lows of 74.2% in assisted living, 81.7% in independent living, and 74.1% in skilled nursing. (NIC MAP Vision)

Our profession has been hopeful for census rebounds—and they are happening—slowly. There are slight increases in recently released NIC MAP Vision data in assisted living and skilled nursing- up .4% to 77.6% in skilled care and .5% to 77.9% in assisted living. The less needs-driven nature of independent living remains only 1.4% of pandemic lows.

It may be years until occupancy returns to pre-pandemic levels. Health Dimensions Group (HDG) advises leaders to project reasonable census growth over the next six to twelve months to make responsible decisions on staffing, expense management, and cash flow. Operational changes, both short-term and strategic, need to be made swiftly using current realities and reasonable increases in census based on market need and staffing availability.

2. Unique Position and Strategy In Labor Crisis

While increases in occupancy are good news, and there may continue to be ongoing and pent-up demand for our services, there are newer and more significant operational limitations from labor availability. Our profession has been uniquely and more significantly impacted by the labor crisis for three reasons: in addition to challenges with front-line staffing, we are seeing an exodus of leadership from the profession altogether; we cannot adjust most service hours or delivery, and we cannot adjust pricing as rapidly other consumer businesses.

There is talk of an impending recession in the United States, and while we know this can positively impact our staffing availability, we don’t want to see this for our country or rely on this for survival.

Senior care operators must find unique ways to survive the labor crisis. In addition to the ongoing focus on recruiting, retention and satisfaction, this may include:

  • Adjusting availability of service levels, for example, opening more independent living units vs. assisted living units.
  • Making overhead and leadership staffing adjustments based on new census realities and balancing expenses with high-cost front-line agency labor, for example, temporarily moving managers into new or combing roles.
  • Temporality suspending certain high-labor service line expansions like memory care to focus on revenue growth in lower expense areas like independent living.

3. Embracing Strategy

In addition to accepting this new reality, leaders must also take firm steps to create a new reality. During a crisis, this pause for strategy can be difficult, but it is the role of leaders to ensure this is in place. HDG recommends taking a very methodical approach to operational and strategic changes.

  • To understand market needs and demand, HDG recommends that communities complete detailed market demand studies. This type of in-depth analysis allows organizations to align services to meet the needs of consumers and referral sources. This study should also include an updated market study of available labor, now and into the future.
  • Longer-term planning should involve comprehensive strategy discussions and development for the community’s future. Planning should address an organization’s mission, healthcare environment needs, size and service offering availability, and sustainability.
  • It is vital that all plans include realistic and complete financial analysis and modeling to plan for cash and capital needs for the health of the organization both now and in the future.

Contact Us

If you would like to discuss evaluation of operations or need assistance with market dynamics and demand, strategy development, or financial modeling, please reach out to the HDG team at info@hdgi1.com or 763.537.5700.

 

Photo of Erin Shvetzoff HennesseyAuthored by: Erin Shvetzoff Hennessey
CEO

 

Share:

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Archives