For the last year, our profession has been laser-focused on preventing and managing the spread of COVID-19 in our communities. This has been a challenging journey—mentally, physically, and emotionally—for every senior care professional and caregiver. We are grateful and hopeful for the promise of a significant reduction in severe illness and death thanks to effective COVID-19 vaccines, which have been prioritized for our residents and their caregivers.
As we enter a new phase of the COVID-19 era—with vaccines, the slowing of stimulus funds, and continuing consumer confidence and staffing issues—the long-term financial impact of the pandemic has moved into focus. 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:
Census across the continuum has declined significantly. This started as 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. According to the National Investment Center for Seniors Housing & Care (NIC), senior housing declined from 82.0 percent occupancy in the third quarter of 2020 to 80.7 percent in the fourth quarter. More recent nursing home statistics, reported by the Centers for Medicare & Medicaid Services (CMS), show that census dropped by 3.9 percent from January 3 to January 24 of 2021.
As we move into the second quarter of 2021, there will continue to be ongoing, and pent-up, demand for our services. As hospitals begin to offer elective surgeries again and people are more comfortable seeking acute care, post-acute census will gradually increase. However, it may be years—if ever—until census returns to pre-pandemic levels. Health Dimensions Group (HDG) advises leaders to project reasonable census growth over the next six months to make responsible decisions on staffing, expense management, and cash flow.
Even as leaders adjust operations to their new census reality, they must also take firm steps to create a new reality. This might include adjusting the size and offerings of care levels; diversifying services offered, including home- and community-based services; and expanding clinical capabilities. The latter is necessary to be an integral part of the care continuum that can manage complexity outside of acute care.
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.
While short-term strategies require rapid decisions on expense management for sustainability, longer-term planning should involve comprehensive strategy discussions and development for the community’s future. Planning should address an organization’s optimal size, service offerings, and integration with the larger senior health ecosystem.
As we move into a new phase of the pandemic, it is important that organizations have a detailed strategic plan in place, featuring tactical steps to achieve both short- and long-term goals. Given the already low margins in the field, it is vital that such plans include realistic financial analysis and modeling to plan for cash and capital needs for the health of the organization both now and in the future.
For a deeper dive into these strategies, join Health Dimensions Group and Prime Care Technologies on our webinar, “Repositioning Senior Care for Post-Pandemic Success,” on March 4.
If you would like to discuss these three key elements of repositioning or need assistance with market dynamics and demand, strategy development, or financial modeling, please reach out to the HDG team at firstname.lastname@example.org or 763.537.5700.
Authored by: Erin Shvetzoff Hennessey