The long shadow of the pandemic continued to recede in 2023, although the senior living profession continued to feel its effects. The COVID-19 public emergency ended May 11.
Wage growth has declined but remains elevated, according to a December report from Fitch Ratings. Wage inflation at continuing care retirement / life plan communities is higher than at assisted living communities, but favorable rate and occupancy growth are offsetting higher staffing expenses. Providers, the ratings agency said, will “continue focusing on efficiency and productivity efforts in 2024 considering the tight labor market and high cost of increasing headcount in the current environment.”
Good news as 2023 comes to a close is that senior living occupancy is on its way to 10 consecutive quarters of positive growth, according to a November report from NIC MAP Vision. The positive growth trend in senior living (independent living and assisted living) marks the longest period of uninterrupted gains since the National Investment Center for Seniors Housing & Care and NIC MAP Vision began reporting data in 2005.
Year-over-year inventory growth remained relatively modest compared with pre-pandemic times, but sustained supply-demand trends could drive senior living occupancy rates to return to pre-pandemic levels in 2024, according to NIC and NIC MAP Vision.
Some providers, such as Maplewood Senior Living, are seeing healthy occupancy across their portfolios. Westport, CT-based Maplewood recently reported that occupancy averages 95% across its senior living portfolio, with multiple communities currently at 100% occupancy. In August, Thrive Senior Living reported that three of its communities in Georgia had reached 100% occupancy, with one community at full capacity for the past 19 months. Pegasus Senior Living and Watercrest Senior Living Group were two other organizations reporting 100% occupancy news in 2023.
Here are some of the other major stories in senior living in 2023.
Federal regulation
Senior living provider groups in 2023 continued to work to maintain regulation of the industry primarily at the state level, with leaders from the National Center for Assisted Living and Argentum addressing the topic at various gatherings.
Provider groups, however, continued to advocate for passage of the federal Expanding Veterans’ Options for Long Term Care Act, which would establish a three-year pilot enabling some veterans to have their care needs met in assisted living communities rather than a Veterans Affairs home. The bill was reintroduced earlier this year after going nowhere last year. Its fate in 2023 appears to be the same, although at a House Committee on Veterans’ Affairs Subcommittee on Health hearing in June, the US Department of Veterans Affairs expressed support for the legislation — with conditions.
Meanwhile, provider advocates said that a proposal that the Centers for Medicare & Medicaid Services says is meant to “support and stabilize the direct care workforce” in home- and community-based settings, if it becomes final, ultimately could lead to fewer jobs, stagnant pay for caregivers and a reduction in older adult access to home- and community-based services — the exact opposite of what the government intends.
The American Seniors Housing Association, Argentum, LeadingAge and the NCAL were among the more than 2,000 groups and individuals submitting comments to CMS on a rule it had proposed in April titled “Medicaid Program; Ensuring Access to Medicaid Services.” The proposed rule — with an overall goal of increasing access to HCBS — in part would require that providers spend at least 80% of Medicaid payments for personal care, homemaker and home health aide services on compensation for direct care workers as opposed to administrative overhead or profit. It also proposes quality measures, which some of the associations said have the potential to burden assisted living providers financially and administratively. A final rule has not been published.
2023 also saw CMS propose a minimum staffing mandate for nursing homes that provider groups say would affect assisted living communities because providers would be competing for nursing staff.
Federal agencies also proposed an overtime pay rule and issued a new definition for “joint employer.”
The proposed overtime rule, under which most salaried workers earning less than $1,059 per week, or about $55,000 per year, would be eligible for overtime pay, was introduced in August. The Labor Department said that 3.6 million salaried workers would be affected. Senior living industry representatives said that the proposal was “ill-timed” and would worsen workforce issues for providers, threatening access for residents.
Under the final joint employer rule, from the National Labor Relations Board in October, “an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or co-determine one or more of the employees’ essential terms and conditions of employment,” the NLRB said.
Long-term care providers that use temporary or contract workers, as well as operators that are part of franchises, are among those that could be affected.
The rule will have a “particularly negative impact on senior living arrangements,” the top Republican member of the Senate Special Committee on Aging and three other Republicans on the committee told NLRB Chairman Lauren McFerran in November.
The NLRB has extended the effective date of the rule by two months, to Feb. 26.
Crime and punishment
In December, the US Supreme Court declined to hear an appeal from former assisted living community and nursing home owner Philip Esformes, clearing the way for federal prosecutors to retry him on six charges in a case that the federal government once described as “the largest healthcare fraud scheme charged by the US Justice Department.”
It was the second time in 2023 that the high court denied appeals from Esformes. In April, Justice Clarence Thomas rejected an emergency appeal seeking to stay a decision from the 11th US Circuit Court of Appeals affirming his 2019 conviction on 20 charges.
Esformes was convicted on charges including conspiracy to defraud the United States, money laundering, paying and receiving kickbacks, bribery, wire fraud and obstruction of justice. The jury, however, did not reach a verdict on six counts.
Former President Donald Trump comminuted Esformes’ 20-year prison sentence in December 2020 but left intact the remaining parts of his sentence, including three years of supervised release, the payment of $5.5 million in restitution and the forfeiture of $38.7 million equivalent to property traced back to Esformes’ money laundering offenses.
In other news, Billy Chemirmir, convicted in 2022 for two murders and suspected in the deaths of more than 24 older adults in Texas, most of whom were women residents of senior living communities, was murdered in prison in September.
Mergers, acquisitions and affiliations
Several notable mergers, acquisitions and affiliations were announced in 2023.
In early February, for instance, Newton, MA-based AlerisLife, parent of Five Star Senior Living, announced that it was being acquired for almost $44 million by a subsidiary of ABP Trust, where Adam D. Portnoy, a managing director of AlerisLife and chair of the company’s board of directors, was the sole trustee and controlling shareholder as well as an officer. The deal was finalized in March, at which time AlerisLife became a private company.
In October, Denver-based real estate investment trust Healthpeak Properties, with a portfolio that includes 15 continuing care retirement communities operated by Life Care Services or Sunrise Senior Living, announced plans to merge with Milwaukee-based Physicians Realty Trust in an all-stock deal valued at approximately $21 billion.
And as the year was drawing to a close, Roanoke, VA-based Retirement Unlimited Inc., announced that it was acquiring Mt. Laurel, NJ-based Brandywine Living’s senior living management platform, forming a combined company that will consist of 59 communities with more than 6,739 independent living, assisted living and memory care units.
Some other activity:
- The year started with Westerville, OH-based Ohio Living and Grand Rapids, MI-based Brio Living Services (formerly UMRC & Porter Hills) announcing that they were exploring a potential strategic affiliation aimed at expanding aging service offerings in the Great Lakes region by the end of the year.
- Westminster Communities of Florida in August announced an affiliation agreement with Florida Presbyterian Homes, a CCRC in Lakeland, FL.
- Also in August, California-based HumanGood and Pleasant Spring Communities, based in Massachusetts, announced plans to affiliate.
- Lancaster County, PA-based Garden Spot Communities and Montgomery County-based Frederick Living announced their planned affiliation in September, saying that the decision was driven by a belief that “the era of the single-site and small-system organization is coming to a close.”
- In October, CCRC Mease Life of Dunedin, FL, and Fort Washington, PA-based Acts Retirement-Life Communities announced the finalization of their affiliation after signing a letter of intent in April to explore the possible arrangement.
- Also in October, Louisville, CO-based Balfour Senior Living became an affiliate of Carlsbad, CA-based Kisco Senior Living.
- Minnesota providers Three Links and St. Francis Health Services of Morris were set to merge Nov. 1.
But just as newsworthy as the deals that were announced were the deals that fell through.
In July, for instance, the planned merger of the parent companies of two of the largest not-for-profit senior living and care organizations in the country was called off for good after being delayed several times. Sioux Falls, SD-based Sanford Health, which includes the Evangelical Lutheran Good Samaritan Society, discontinued the merger process with Minneapolis-based Fairview Health Services, which includes Ebenezer Senior Living, Minnesota’s largest senior living operator.
And in September, Diversified Healthcare Trust, with a portfolio that includes Five Star Senior Living-branded communities and properties operated by several other companies, and Office Properties Income Trust called off their planned merger. The deal had faced opposition from proxy advisory firms Egan-Jones, ISS and Glass Lewis as well as shareholders Flat Footed and hedge fund D.E. Shaw. Subsequently, as the Newton, MA-based REIT sought firmer financial footing, board changes and a new president and CEO, who will start Jan. 1, were announced.
More company news
Enlivant, with a motto of “Where senior living thrives,” did not thrive in 2023. An audit made public in February found “substantial doubt” about the company’s ability to continue as a “going concern,” affecting a 157-community joint venture with Sabra Health Care REIT and TPG Real Estate. In May, Enlivant announced the layoffs of 248 employees at its Chicago corporate support center. In July, the management of 11 other Enlivant communities owned by Sabra was moved to Inspirit Senior Living, with Sabra CEO Rick Matros saying later in the year that performance was “exceeding expectations.” In October came the news that Enlivant faced eviction from its corporate support center. The company ceased operations on Nov. 17.
The year had more positive news for Brookdale Senior Living, which in December reported its 25th consecutive month of year-over-year weighted average occupancy growth. 2023 also saw the country’s largest senior living company continue to roll out its value-based care coordination program for residents, after a pilot that CEO Cindy Baier said delivered “extremely promising” results.
Meanwhile, Westlake Village, CA-based real estate investment trust LTC Properties announced plans to sell approximately half of the 35 Brookdale Senior Living communities it owned and re-lease the other half after Brookdale opted not to renew its lease with the REIT. Ultimately, however, LTC Properties re-leased 17 of the 35 properties back to Brookdale under a new six-year master lease beginning Jan. 1, the REIT reported in October.
Irvine, CA-based memory care provider Silverado also had good news in late October, when a court dismissed all criminal charges leveled against it by the Los Angeles District Attorney’s Office related to 14 deaths that occurred early in the COVID-19 pandemic. “It’s a great day for the industry as a whole,” Silverado President, CEO and Chairman Loren Shook said at the time.
CVS Health, the parent of long-term care pharmacy Omnicare, in the first quarter recorded a $349 million loss on assets held for sale associated with the Omnicare business. In August, CVS said that it was laying off 5,000 employees but did not identify whether any of the layoffs would affect Omnicare, which CVS said in November 2022 that it planned to sell. In November 2023, however, the company said a sale wasn’t expected “in the near term.”
Newsweek launches CCRC rankings
Newsweek became the latest recognition program for senior living operators when in November, with global market research and consumer data firm Statista, it recognized 250 US continuing care retirement / life plan communities via the announcement of the first-ever “America’s Best Continuing Care Retirement Communities 2024” rankings.
Unlike the US News and World Report “Best Senior Living” results first published in 2022, the Newsweek / Statista effort focuses only on CCRCs, ranks them and includes feedback from surveys that were open to anyone choosing to participate who met certain criteria and were willing to provide demographic information and email addresses for data validation purposes. The US News program, by contrast, rates various types of communities — independent living, assisted living, memory care and CCRCs — as “best” if they meet certain criteria based on the results of consumer satisfaction surveys of residents and their families conducted at participating communities. The communities are not ranked.
Attention from the lay press
Late in the year, the senior living industry was the target of two packages of articles published by the national lay media, and industry advocates responded.
In December, the Washington Post published “Memory Inc.,” about assisted living and memory care community residents who had eloped and died. Since 2018, the authors said, “more than 2,000 people have wandered away from assisted-living and memory-care facilities unnoticed or been left unattended for hours outside,” and 98 had died. Read how the industry responded here.
Those articles came on the heels of a package of articles published in November by the New York Times and KFF. That report, titled “Dying Broke,” scrutinized an industry pricing structure that adds fees on top of basic charges, to cover additional services such as help with activities of daily living, insulin injections and blood pressure checks. Read how the industry responded here.
Expect more scrutiny of the industry from the mainstream media as a “silver wave” of older adults thinks about moving into senior living in the coming years.
Stay on top of the news
McKnight’s Senior Living marked the 20th anniversary of its first print magazine issue in October and will continue the celebration in 2024. The magazine has been published every other month since February 2004, with digital and other aspects of the brand starting in 2015.
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