The higher expenses, lower revenues and reduced cash flows of the pandemic were only aggravated by 2022’s inflationary economy. Interest rate hikes intended to keep costs in check put even more pressure on profit margins as wages (for fewer and much-needed employees) and food and construction costs continue to escalate. Those communities with floating debt rates also are feeling the squeeze.

In addition, although expenses were up due to hyperinflation, the revenue side has not kept pace, as many communities can’t simply “raise their price” or “charge more,” especially if the majority of their revenue is from the federal government. 

On a brighter note, occupancy rates continue to rebound from the pandemic-related decline, and a huge push is likely to gain momentum by the end of 2023.

Operators that have a steady management hand, especially on the manageable and less-manageable risks, will be in the best position to emerge whole, despite the test of their resiliency.

Here are key trends for management of senior living organizations to prepare for in 2023.

Worrisome staffing shortage

Long-term care facilities in the United States have shed more than 300,000 workers since the pandemic began. This isn’t a new situation, just a worsening one made difficult by losing out on two years of immigration.

Now more than ever, operators need to find a way to add value to jobs, to give people a reason to seek them out. The work itself has less than attractive aspects, but better pay and benefits can make it more palatable.

A more robust package of benefits that, importantly, anticipates their needs as individuals, can go a long way — and that doesn’t have to mean healthcare. Voluntary benefits have huge effect and often at a minimal cost. Programs that address financial wellness, for example, have tremendous value; consider employee purchasing programs to put big ticket items within reach.

And getting creative can pay off, too. In lieu of surplus salary dollars, community partnerships can be developed to educate a new workforce. Why not recruit high school graduates for nonclinical work but pay for their in-house nursing training at the same time?

Further, environmental and cultural factors play a role in recruitment and retention. Think collegial atmosphere and safety, not just from the physical stress and strains, but from resident or outside violence as well. People leave for many reasons, but they also stay for many reasons. Leveraging them all can stem the losses.

Prioritizing value-based care

As the senior living and care sector struggles to rebuild its COVID-battered infrastructure to sufficiently care for the fast-growing population of older adults, everyone is concerned about how to provide quality care despite the pressures the industry faces.

The shortage of staff stymies how well care actually can be delivered. As McKnight’s Senior Living sister media brand McKnight’s Long-Term Care News recently reported, skilled nursing providers can be incentivized to provide quality care (whether through pay-for-performance or value-based care) by tying Medicare payments to safety and quality measures.

But do those incentives support staff by improving working conditions, wages and benefits or improving staffing ratios? Historically, they haven’t been adequate against operators’ profit motivation, especially after the financial battering of the pandemic. And what about private-pay senior living, where healthcare increasingly is provided?

This issue will continue to be a top one in 2023 and beyond, as value-based care is viewed as an important route to improved older adult health outcomes. It merits serious attention by the industry in 2023 and beyond, and it is especially urgent for nursing home operators, as CMS intends to have at least the Medicare portion of skilled nursing facilities part of value-based care by 2030.

Blocking, tackling against extraordinary risks

Managers also need to stay on their toes to keep ahead of the risks that keep the pressure on operations as they try to rebuild resiliency.

Violence in residential living and care settings is a huge risk to residents and staff members alike. It’s a risk with a huge cost, not the least is the ability to attract and retain qualified employees. Collectively, assisted living communities and nursing homes typically have had one of the highest rates of nonfatal occupational violence — 6.8 incidents per 100 full-time workers, with nursing assistants at the highest risk.

It’s led the Joint Commission to issue new workplace violence standards for some of the settings it accredits, with updated safety measures and requiring mitigation plans that identify triggers and include the implementation of appropriate physical safeguards. The depth and scope of the problem may affect the cost of general liability and workers’ compensation insurance. Creating a safe environment can reassure underwriters and create a sense of safety and security to the workplace when it’s needed most.

On a different risk front are the intensifying side effects of global warming. Whether it’s hurricanes and the floods they cause, tornadoes or worsening wildfires given drought conditions, disaster preparedness has never been more important. 

Pete Reilly is the practice leader and chief sales officer of global insurance brokerage Hub International’s North American healthcare practice. Gerald Stoll serves as CEO, senior care, HUB Northeast, and Jordan Parnell is healthcare practice group leader, HUB Gulf South.

The opinions expressed in each McKnight’s Senior Living marketplace column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines here.

The industry was under substantial pressure even before the pandemic. But now it’s at the brink, financially and operationally. By late November, The Atlantic magazine’s COVID Tracking Project found that infections at facilities, including assisted living communities and care homes as well as nursing facilities, had reached a new weekly high of 46,000, the worst week in six months. Cases among the sector’s residents and staff members made up just 5.7% of all the U.S. COVID cases but accounted for 39.3% of the deaths.

The 2021 outlook is grim. Getting through it will hinge, to a large extent, on financial rescue programs at the federal and state levels. In addition, it will be important how well operators manage developing and/or deepening trends. Here’s what to look out for.

Clinical risk management has never been more important

A San Francisco Jewish senior housing complex made it through the first three months of the coronavirus pandemic without experiencing a single case. How? It had stocked up on personal protective equipment and masks for employees and residents. It stringently screened everyone walking through the door. Everyone was educated on best mitigation practices and symptoms and infection prevention protocols. One executive said an early start mattered … and their doorknobs had never been so clean.

The right procedures and controls do make the difference in disease transmission. It’s a lesson that must drive improvements to the industry’s clinical risk management programs in 2021 and beyond. COVID-19 is not likely to be our last pandemic.

Now, the industry faces an as-yet undetermined liability over COVID deaths even as insurers are responding to the uncertainty. Before COVID, premiums were escalating dramatically and coverage availability was tightening. It’s much worse as we move into 2021, though, particularly for professional liability, general liability, management liability and workers’ compensation. It makes the case to reduce your exposures and strengthen ties with your broker. 

Repairing the damaged mental health of residents

The coronavirus pandemic also spawned a mental health pandemic; the Centers for Disease Control found that more than 40% of Americans had anxiety and depression, symptoms of trauma, more thoughts of suicide and were abusing drugs and alcohol.

But if the mental health crisis was bad for the general population, it has been exponentially worse for residents in long-term care. Being isolated in their rooms with no group dining, activities or in-person family visits was stressful for residents. This reality was aggravated by factors such as too much negative television, no exercise, limited direct sunlight or fresh air.

Compounding it all (especially for those with cognitive issues) was the confusing element of caregivers whose identities were obscured by protective garb. Reversing the decline will be a critical challenge well into 2021, the urgency heightened by the risk to residents’ physical health when their mental health is not addressed.

It’s more important than ever to encourage staff members to be alert to cues of issues. They are closest to residents, especially in group settings, and can spot when they are less engaged. It’s more difficult to monitor in independent living settings, but training helps. Communities must be ready to tap into the right resources for the setting, whether primary care practitioners or psychiatric home health nurses. And ultimately, balancing mental health and safety will be key in the post-COVID world, finding ways to stimulate residents so they can re-engage again.

Staff pressures also need addressing in 2021

The much vaunted “healthcare heroes” aren’t only found in hospitals. They were right there in trenches of our senior living and care communities, dealing with the same stressors of long hours; equipment shortages; fear for their families, their residents and selves; and grief over losses.

The toll the pandemic has taken on staff members’ emotional health needs to be addressed now. If nothing else, post throughout employee spaces information about community resources (suicide prevention hotline, food banks, etc.). Also consider sponsoring an Employee Assistance Program. Such programs offer confidential mental health counseling in a variety of formats (telehealth and, when it’s safer, one-on-one, for example). It’s key, however, that staff member are informed about the EAP and how to access its resources.  

The pandemic also has brought home long-standing understaffing issues that have aggravated the emotional well-being and performance of employees but also undermine the structural soundness of the industry. Understaffing makes providing basic care a challenge. It adds to the difficulties of monitoring residents – for COVID-19 now, but for any contagion. It also makes it more difficult for caregivers to follow protocols consistently.

The unprecedented events of 2020 make the case for addressing the deficiencies in the system; 2021 is the logical time to start if we are going to avoid a repeat.

Pete Reilly is the practice leader and chief sales officer for Hub International’s North American Healthcare Practice. Gigi Acevedo-Parker is national practice leader, critical risk management, for Hub.

The opinions expressed in each McKnight’s Senior Living marketplace column are those of the author and are not necessarily those of McKnight’s Senior Living.

Have a column idea? See our submission guidelines and answers to FAQs here.