Solid partnerships with high-quality healthcare and ancillary service providers can help create better resident outcomes, longer length of stay, and added revenue streams. But what’s the best way to establish and manage a network of providers in a fragmented care system?

In an insightful discussion, a panel of experienced senior housing industry executives answered questions about how to implement innovative and effective partnerships. The session—“Leaning in and Leveraging Resources for Successful Partnerships”—was held at the 2022 NIC Spring Conference in Dallas.

The discussion was moderated by Brian Cloch, CEO and founder of Innovative Health; and Amy Kaszak, president, Special Needs Plans, AllyAlign. Panelists included Alan Fairbanks, executive vice president, Bickford Senior Living; Sheryl Marcet, chief investment officer, Arcus Healthcare Partners; Laurie Geschrey, director of value-based care and partner relations, Pathway to Living; and Chirag Patel, MD, chief medical officer, Hansa Medical Group.

Here are the key Q&As from the session, edited for length and clarity.

Q: What are the benefits of partnership?

A: Partners add value. For example, Hansa Medical Group offers its medical care services in 120 senior living communities. Medical teams provide daily support to residents, reducing emergency room visits, and increasing the length of stay. The availability of medical support also eases the stress on the nursing and executive directors. “Our involvement reduces the workload of the staff,” said Dr. Patel. “Turnover is reduced.”

Good provider networks can also provide preventative care to help keep residents healthier. “The result is better resident satisfaction, and better staff satisfaction,” said Bickford’s Fairbanks.

Q: What are the advantages of value-based care partnerships?

A: With value-based care, a case manager follows the beneficiary through the continuum of care. That way, residents can be tracked and typically return to the community. Residents in the fee-for-service Medicare system who go to the hospital can get lost in the shuffle. “They may never some back to the community,” said Geschrey.

Equity provider Marcet said that coordinated care models translate to the bottom line. Capital partners are looking for best-in-class operators. “You’ll be left behind if you are not looking at coordinated care,” she said.

Q: What should you look for in preferred partners?

A: Partners must meet certain criteria, said Fairbanks. Bickford is looking for ways to create win-win partnerships to keep residents healthy, instead of having to react to emergencies. The goal is to incorporate home health, primary care, hospice and other services under one umbrella. “It’s a win for the staff,” said Fairbanks. “They aren’t scrambling to work with multiple doctors.” Geschrey added that providers must agree to work with each other.

Also, providers must be continually vetted and track outcomes. “You need providers you can trust,” said Geschrey. “Our job is to hold them accountable.”

Q: How do you talk to residents about using preferred providers?

A: Residents have to feel they have a choice about their care plan, the experts said. “Choice is about education,” said Cloch. Pathway to Living starts the process when prospective residents and their families come in for a tour. “We are proud of our coordinated care model,” said Geschrey. It’s important to highlight the advantages of the model and that a team is there to take care of their loved one, she added. Also, share results. The value-based care model has been operating in five Pathway communities for two years. About half of the residents are enrolled, reducing the days in the hospital or in rehab from 23%-25%.

For residents who want to keep their long-time doctor, Patel suggests to families that his group act as an in-house back up provider. When the family sees that it is easier to use the in-house doctor rather than taking the resident to outside appointments, the family will often switch to Patel’s group for primary care.

Q: Considering the staffing issue today, who manages the providers?

A: Bickford has a coordinator at the property. “We help them build a network,” said Fairbanks. As the primary care provider, Patel’s group coordinates care with the other providers along with the executive and nursing directors at the property.

Q: Are provider arrangements formal or informal agreements?

A: Both Pathway and Bickford have a written third-party provider agreement that includes operating standards. Patel’s group contracts with the insurance provider, not the building operator. There is, however, an understanding with the operator that Patel’s group will track data to show increased length of stay and reduced hospitalizations.

Conference attendees may access 2022 NIC Spring Conference recordings anytime.

Join us for the 2022 NIC Fall Conference, September 14-16 in Washington, DC; registration is now open.

NIC’s Skilled Nursing COVID-19 Tracker, featuring the most up-to-date CMS data,^* shows that rates of new COVID-19 infections in skilled nursing facilities are rising once again for both residents and staff.

The per-resident rate of new COVID-19 infections increased to 0.50% (50 in 10,000 residents tested positive) for the week ending May 8, 2022, up 0.08 percentage points from May 1 (0.41%) and 0.40 percentage points from just a month earlier (the recent low of 0.10% reported on April 3). Roughly 10% of skilled nursing facilities reported newly confirmed cases among residents on May 8.

Regionally, skilled nursing facilities in the Northeast region reported the highest per-resident rate of new COVID-19 infections at 1.02% (up 0.16pps from May 1 and 0.87pps from April 3), followed by the Midwest (0.42% – up 0.1pps from May 1 and 0.33pps from April 3), the West (0.32% – down 0.06pps from May 1 but up 0.17pps from April 3), then the South (0.25% – up 0.07pps from May 1 and 0.20pps from April 3).

Other highlights from the latest data are noted below.

• Virus cases among staff increased by 13% for the week ending May 8, 2022 — from approximately 4,800 cases on May 1, 2022, to nearly 5,500 new cases on May 8, 2022.
• Weekly cases among residents rose by 16% over the same period, from 4,500 cases on May 1, 2022, to 5,300 new cases on May 8, 2022.

• According to CDC data, U.S. weekly COVID-19 cases among the general population increased by 21%, from 411,000 cases on May 1 to 496,200 on May 8. Weekly cases among the general population increased further by 45% from May 8 to May 22, to 719,400 new cases.
• 71% of residents within skilled nursing facilities have received at least one COVID-19 vaccine booster as of May 8, 2022 and. 46.2% of staff have received a COVID-19 vaccine booster.
• Fatalities as percent of skilled nursing facility residents stood at 0.01% on May 8.
• Staffing shortages persist. Over 25% of skilled nursing facilities reported shortages of aides, 24% reported shortages of nursing staff, and 14% reported shortages of other staff according to the May 8, 2022 data reported by CMS.

The high caseload recorded in January 2022 exacerbated staffing shortages due to sickness-related absenteeism among skilled nursing facility workers. However, since January 2022, staffing shortages started to alleviate, and the decline in facilities reporting shortages of nursing staff is likely due to the fast retreat of Omicron and the reduced level of illness among nursing staff. It is still difficult to say whether the industry is in recovery from its pandemic shortage, especially while rates of new COVID-19 infections in the country and within skilled nursing facilities are rising once again.

NIC’s Skilled Nursing COVID-19 Tracker shows the week-over-week change rate for new resident cases of COVID-19 within skilled nursing facilities on a per-facility basis, by geography. The data is displayed in an easy-to-use interactive dashboard that allows sorts down to the county level. The Tracker and Supplemental Data provide an indicator on the rate of virus spread within skilled nursing communities by geographic location, offering a way to better understand where and why cases are spreading, slowing, or remaining flat. Historical data are available back to June 2020.

Visit the NIC Skilled Nursing COVID-19 Tracker for details and the latest data.

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^*Data referenced in this blog are based on Skilled Nursing COVID-19 Tracker reports updated and published with the CMS data (cases in skilled nursing facilities) as of May 8, 2022, and CDC data (U.S. cases) as of May 22, 2022.

Here are some actionable insights.

Amid an industry-wide frustration with an exceptionally tight labor market and quickly rising wages, new approaches to recruit and retain good workers were detailed at the 2022 NIC Spring Conference in Dallas. The session, “Fostering Meaningful Engagement: Industry Staffing and Labor Needs,” included presentations by four experts followed by a brainstorming session for industry stakeholders to share ideas on effective strategies.

“We have a problem,” said panelist Jacquelyn Kung, CEO, Activated Insights, which runs the Great Place to Work certification program for senior care. She breaks the problem into three parts: recruitment, retention, and growth. Based on data from 500,000 residents and family members, she made three recommendations.

Be great. Senior living providers are not getting enough applicants. Other industries with hourly pay receive 21-25 applicants per job compared to 13-15 applicants for senior living. In order to get more applicants, senior living companies need to be great and stand out, according to Kung.

Engage more. Retention is linked to worker engagement. The annual turnover rate among senior living workers is currently about 85%. Prioritize employee engagement especially at the properties that tend to receive less attention.

Promote from within. Only 17% of promotions in senior living come from within, compared to 46% at hospitals. Try to fill 40% of promotions internally to grow a pipeline of leaders.

Panelist Myra Norton, CEO, Arena Analytics noted, “The labor market is not going back to the way it was. We have to navigate the new reality.”

Norton offered five strategies that address the current labor environment.

1. Tap non-traditional labor pools by considering those with different backgrounds, experience, and education.
2. Support work/life integration. Help employees integrate meaningful work into their lives.
3. Hire for outcomes. Focus on the qualities in applicants to produce the desired outcomes for residents.
4. Rethink your staffing mix. About 40% of part-time workers want more hours. Take advantage of that reality.
5. Co-create solutions. Look for answers to problems from your staff.

How to Boost Engagement

Speaker Ed Frauenheim, co-founder of The Teal Team, an organization of consulting executives, offered leadership tips. He suggested that leaders should know their strengths and weaknesses and take time off to reduce personal stress. Understand employees and support them as people, not just workers. And create a culture of mutual care where workers can support each other.

Engaged workers produce better results. But engagement and satisfaction are not the same thing, said panelist Craig Deao, managing director at Huron Consulting Group. Satisfaction is a measure of what the worker gets from the relationship, such as a paycheck. Engagement is about putting forth discretionary effort when no one is watching. “Engagement is the difference between commitment and compliance,” he said. Commitment is built on a foundation of trust.

Leaders can boost engagement by promoting the company’s mission and values. Compensation and benefit packages should be competitive. Also, create a feedback loop to collect information from workers and build relationships. Help workers find their own solutions to problems. “Relight the flame so people realize they can bring their best selves to work,” said Deao.

Small group brainstorming sessions followed the experts’ presentations, allowing audience members to discuss and generate actionable insights to apply in their own workplaces. Some of the suggestions included: educational scholarships for employees, mentorship programs, internships, and flexible scheduling.

Speaker Deao concluded by emphasizing that the senior care profession is rewarding because it makes a difference in people’s lives by caring for the elderly and helping families ease their caregiving duties. “Everyone is here for intrinsic reasons,” said Deao. “You can unlock that energy that was there when your staff decided to join the profession.”

2022 NIC Spring Conference recordings are available to conference attendees.

Join us for the 2022 NIC Fall Conference, September 14-16 in Washington, DC.

NIC Leadership Huddles returned on May 11 with a timely focus on the state of senior housing and skilled nursing and the path to recovery. Beth Mace, chief economist and director of outreach at NIC, Brian Beckwith, chief executive officer of Arcus Healthcare Partners, and Craig D. Hanson, chief executive officer of Omega Senior Living, shared insights on potential regulatory changes, market activity, and ongoing workforce and occupancy challenges that continue to impact owners, operators, and investors.

It is no surprise that the COVID-19 pandemic had a tremendous impact on skilled nursing occupancy. But what exactly happened? This article provides the insights on supply and demand dynamics and the disparities between property level occupancy rates for freestanding skilled nursing properties.

Demand and Supply Dynamics for Freestanding Skilled Nursing Properties (2017 – 2022)

The COVID-19 pandemic caused an unprecedented global health crisis and human tragedy. Among the most affected groups and property types were older frail adults and skilled nursing properties. Indeed, the health crisis led to a dramatic loss in occupied beds for the skilled nursing sector. From the first quarter of 2020 to the first quarter of 2021, demand, as measured by occupied stock or the change in net absorption, fell by about 62,000 beds on a net basis for freestanding skilled nursing properties for the 31 NIC MAP^® Primary Markets aggregate. This was equivalent to 15% of the pre-pandemic (1Q 2020) occupied bed stock. Net absorption rates averaged about negative 4% on a quarterly basis over this four-quarter period.

Subsequently, beginning in the first quarter of 2021 through first quarter 2022, demand patterns reversed course and the net absorption rate averaged 1.1% on a quarter-to-quarter basis — equivalent to over 15,350 beds absorbed on a net basis over this four-quarter period. Notably, 25% of the occupied beds lost for the Primary Markets aggregate during the first year of the pandemic (1Q 2020 to 1Q 2021) had been recovered during the second year of the pandemic (1Q 2021 to 1Q 2022). While this was a very welcome positive trend and does indicate light on the horizon, the sector continues to face concerning financial challenges unfortunately for a number of reasons. These reasons include very low occupancy rates, Medicare funding cuts and underfunding of Medicaid reimbursement in many states, incrementally higher expenses, and staggering staffing shortages restricting admissions of residents into some skilled nursing properties.

Interestingly, however, as Exhibit 1 below shows, supply and demand for freestanding skilled nursing properties were contracting even prior to the pandemic. Based on historical data since 2017, quarterly net absorption rates and inventory growth averaged negative 0.2% and negative 0.1%, respectively, over the period from 1Q 2017 to 1Q 2020, the three years preceding the pandemic.

Further, the data show that during the height of the pandemic and prior to widespread vaccination among residents (from 1Q 2020 to 1Q 2021), the decline in inventory for skilled nursing properties continued but at a much slower pace compared with historical patterns and averaged negative 0.03% quarter-to-quarter, less than one third the rate at which inventory had been declining prior to the pandemic (negative 0.1%).

Exhibit 1 – Supply & Demand Dynamics – Freestanding Skilled Nursing Properties

The question is, why did this slowdown in the loss of skilled nursing beds occur during the first year of the pandemic? Perhaps fewer beds were taken offline because bed capacity was simply needed during the height of the pandemic to take care of the unprecedented numbers of ill older adults.

In hindsight, skilled nursing properties generally stood their ground and navigated through extremely uncertain and decentralized responses to COVID-19 when they were needed the most to care for individuals at high-risk for severe illness from COVID-19 and went even further by accepting COVID-19 patients from overwhelmed hospitals in many states.

During the second year of the pandemic (1Q 2021 to 1Q 2022), skilled nursing inventory decline accelerated once again, averaging negative 0.2% quarter-to quarter, twice the rate recorded prior to the pandemic (negative 0.1% quarter-to-quarter over the three years leading up to the pandemic, from 1Q 2017 to 1Q 2020), and nearly seven times the rate recorded during the first year of the pandemic (negative 0.03% quarter-to-quarter over the period from 1Q 2020 to 1Q 2021).

While vaccines have proven to be effective at limiting severe illness, hospitalizations, and fatalities from COVID-19, and the level of agility, preparedness and responsiveness among skilled nursing properties has never been higher, these statistics show that inventory nonetheless contracted during the second year of the pandemic. The inventory decline may have been the result of:

• Closures due to inadequate funding leading to financial stress among some operators amid very low occupancy rates and incrementally higher expenses,
• A move to more private rooms thereby removing some bed capacity at properties, and
• The staffing shortages limiting admissions and occupancy recovery.

Occupancy Overview – Freestanding Skilled Nursing Properties

Since the outbreak in early 2020, the COVID-19 pandemic has challenged every aspect of the skilled nursing sector. In the span of one year, occupancy for freestanding skilled nursing properties for the Primary Markets fell 12.8 percentage points, from 86.3% in 1Q 2020 to a record low of 73.5% in 1Q 2021. Since then, occupancy climbed to 77.3% in 1Q 2022, up 3.8 percentage points from its lowest level but remaining 9.0 full percentage points below 1Q 2020 pre-pandemic levels. Additionally, 21% of freestanding skilled nursing properties reported an occupancy rate in 1Q 2022 at or above pre-pandemic 1Q 2020 levels, according to NIC MAP^® data.

The occupancy loss for skilled nursing in the Primary Markets during the first year of the pandemic was mainly a function of a demand contraction. Whereas the occupancy loss for the private pay senior housing sector over the same period was a function of both an increase in supply and a decrease in demand. As background, occupancy for private pay senior housing properties for the Primary Markets fell by 9.2 percentage points from 1Q 2020 to 1Q 2021, 3.6 percentage points less than skilled nursing.

While the uncertainty bands remain wide in terms of when occupancy rates for skilled nursing properties will return to pre-pandemic levels, a key question is whether obtaining a sustainable level of occupancy and revenue growth will be sufficient to grow NOI and recoup the losses from the severe downturn in occupancy rates, the incrementally higher expenses, and inflationary impact associated with the pandemic.

Exhibit 2 – Occupancy Recovery – Freestanding Skilled Nursing Properties vs. Senior Housing Properties

Occupancy Distribution

Average occupancy rates provide a window into an overall market’s performance. But in a time of severe and prolonged downturn, it is important to assess occupancy distribution to get a better understanding of property level performance. Exhibit 3 below depicts occupancy distribution for freestanding skilled nursing properties for the Primary Markets aggregate.

The pandemic triggered significant disparities between property level occupancy rates. For example, the spread between quartile 3 property level occupancy rates and quartile 1 (known as the interquartile range, which represents the middle 50% of the data), jumped to roughly 20 percentage points in 1Q 2021, the highest it has been since NIC MAP began reporting the data in 2005. In 1Q 2020 before the pandemic began to influence the skilled nursing sector, the interquartile range was relatively smaller at 14.2 percentage points, 5.7 percentage points below 1Q 2021.

Further, 75% of freestanding skilled nursing properties within the Primary Markets had an occupancy rate equal to or above 80.8% (quartile 1) in 1Q 2020, as depicted in the box plot in Exhibit 3 below. At the height of the pandemic in 1Q 2021 and based on the detailed distribution compiled by NIC Analytics, only 35% of skilled nursing properties had an occupancy rate above 80%, 15% had occupancy between 80% and 75%, and 50% had an occupancy rate below 75% (median), including 25% of properties with an occupancy rate below 64.1% (quartile 1).

In 1Q 2022, as demand increased for four consecutive quarters, the share of properties with occupancy rates above 80% grew to about 50% (median 79.4%). While 1Q 2022 stats have improved, 25% of skilled nursing properties continue to experience occupancy below 68.9% (quartile 1). Owners of these properties may find access to capital challenging since many may have been relying on COVID-19 era policies to support operations.

Exhibit 3 – Occupancy Distribution – Freestanding Skilled Nursing Properties

The recent improvements in skilled nursing market fundamentals have demonstrated that vigilance and preparedness among skilled nursing properties are key elements for protecting staff and residents from COVID-19 and restoring occupancy.

Methodology

In this analysis based on NIC MAPdata, powered by NIC MAP Vision, we discuss recent market fundamentals for the skilled nursing sector and how it is faring after two years of the pandemic. We evaluate supply and demand dynamics for freestanding skilled nursing properties within the 31 NIC MAP Primary Markets (Primary Markets) since 2017. Additionally, we examine property-level occupancy distribution to get a better understanding of how widespread the effects of the pandemic have been.

The analysis examined approximately 4,000 freestanding skilled nursing properties within the Primary Markets. Note that combined properties offering at least two types of service and life plan communities (LPCs)/continuing care retirement communities (CCRCs) were excluded from this analysis.

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To learn more about NIC MAP data, powered by NIC MAP Vision, an affiliate of NIC, and accessing the data featured in this article, schedule a meeting with a product expert today.