“A key underlying theme that can be derived from looking at the findings of the Wave 15 NIC Executive Insights survey as a whole is uncertainty. Uncertainty around the need for seniors housing and care operators to use temporary and agency staff, ability to grow NOI amid rising costs of labor and PPE, the pace of sales in light of consumer concerns about being able to visit loved ones, and the direction of record low occupancy rates. When (and how) life as we knew it will settle into a new normal are all being driven by the durability of the pandemic.”      –Lana Peck, Senior Principal, NIC

NIC’s Executive Survey of operators in seniors housing and skilled nursing is designed to deliver transparency into market fundamentals in the seniors housing and care space at a time when market conditions continue to change. This Wave 15 survey includes responses collected October 26-November 8, 2020 from owners and executives of 64 seniors housing and skilled nursing operators from across the nation. Detailed reports for each “wave” of the survey can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights.

 Wave 15 Summary of Insights and Findings

• Staffing is a growing challenge for many operators. More than two-thirds of respondents are using agency or temp staff to fill vacancies—70% up from 36% in Wave 3. Although down slightly from Wave 14, most respondents are continuing to pay staff overtime hours, putting ongoing strain on NOI. While fewer organizations in Wave 15 than earlier in the pandemic continue to allow staff to work remotely and offer paid sick leave, three-quarters are still offering flexible work hours.
• In Wave 15, similar shares of organizations with independent living units, assisted living units and/or nursing care beds reported roughly equal proportions of increases or decreases in month-over-month occupancy changes.
• The use of rent concessions may be providing some support to occupancy rates as month-over-month seniors housing care segment occupancy changes in Waves 14 and 15 trended higher than prior in waves of the survey. Between 62% and 69% of organizations with any independent living units, assisted living units and/or memory care beds reported offering rent concessions. Fewer organizations with any nursing care beds reported offering rent concessions (43%).
• The shares of organizations with assisted living units reporting increased month-over-month occupancy is the highest in the survey time series (42%). Just under one-half of organizations with memory care units (45%), 40% with nursing care beds, and roughly one-third with independent living units (30%) noted upward changes in occupancy rates in the past 30-days. Regarding the change in occupancy from one week ago, between two-thirds and three-quarters of organizations (63% to 79%) reported no change.
• The shares of organizations reporting no change in the pace of move-ins and move-outs in the past 30-days for the independent living, assisted living and memory care segments remained high in Wave 15 (between 49% and 52%). That said, while smaller in proportion, the shares of organizations reporting accelerations in move-ins outpaced decelerations in the independent living, assisted living and memory care segments. However, the nursing care segment had the largest share of organizations reporting both a deceleration in the pace of move-ins and acceleration in the pace of move-outs in the past 30-days.
• The share of organizations citing increased resident demand as a reason for acceleration in move-ins in Wave 15 also remained high. Organizations citing hospital placement in Wave 15 (29%) is up from a low of 13% in Wave 12 and down from a high of 41% in Wave 10. Resident or family member concerns was cited most frequently as a reason for deceleration in move-ins and reached the highest point in the survey time series (88%), followed by slowdown in leads conversions/sales (75%). Interestingly, there appears to be a relationship between these two primary reasons.
• Respondents citing an organization-imposed ban as a reason for deceleration in move-ins increased from 0% in Wave 14 to 17% in Wave 15. While still a small percentage, about one in five respondents (19%) indicated their organizations were increasing move-in restrictions in one or more of their properties. This is up from an average of 7% in Waves 11 through 14 (surveyed early August to the end of October).
• One-third of organizations with nursing care beds (33%) reported an acceleration in the pace of move-outs. This was the largest share since the Wave 5 surveyed in late April to early May.
• Three-quarters of organizations (77%) reporting acceleration in move-outs cited resident deaths (reason unspecified), which was up from 61% in Wave 13. Resident or family member concerns declined from 52% in Wave 13 to 45% in Wave 15, followed by residents moving to higher levels of care (41%).
• Accurate and timely testing (within 48 hours) and access to PPE is crucial for operators to keep residents safe from contagion and grow occupancy. Over one-half of respondents find it easy to obtain COVID-19 test kits and PPE. A significant improvement since the late summer months, more than one-half of respondents (56%), received their COVID-19 test results within 2 days, up from 13% in Wave 10, surveyed late July to early August.
• About one-quarter of organizations (24%)—more than in the Wave 10 survey (13%) and similar to the Wave 3 survey (27%)—expect their development pipelines to decrease. The reason cited by all of the respondents was uncertainty.

Wave 15 Survey Demographics

• Responses were collected October 26-November 8, 2020 from owners and executives of 64 seniors housing and skilled nursing operators from across the nation. Half of respondents are exclusively for-profit providers (52%), one-third (33%) are exclusively nonprofit providers, and 15% operate both for-profit and nonprofit seniors housing and care organizations.
• Owner/operators with 1 to 10 properties comprise 56% of the sample. Operators with 11 to 25 properties make up 24% of the sample, while operators with 26 properties or more make up 20% of the sample.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 72% of the organizations operate seniors housing properties (IL, AL, MC), 33% operate nursing care properties, and 33% operate CCRCs (aka Life Plan Communities).

Key Survey Results

Pace of Move-Ins and Move-Outs

Respondents were asked: “Considering my organization’s entire portfolio of properties, overall, the pace of move-ins and move-outs by care segment in the past 30-days has…”

• Showing the most recent waves of survey data in the chart below, the shares of organizations reporting no change in the pace of move-ins in the past 30-days remained high for the independent living, assisted living and memory care segments (ranging from 49% to 52%).
• Between one-quarter and one-third of organizations (25% to 34%) with independent living, assisted living and/or memory care units, and 19% of organizations with nursing care beds reported accelerations in the pace of move-ins. Accelerations outpaced decelerations in assisted living and memory care. The nursing care segment had the largest share of organizations reporting declaration in move-ins.
  
• Wave 15, the smallest shares of organizations with independent living units and/or nursing care beds reported accelerations in the pace of move-ins, and the largest shares of organizations with nursing care beds reported decelerations in the pace of move-ins since Wave 8 (surveyed at the end of May to early June).

Reasons for Acceleration or Deceleration in Move-Ins

Respondents were asked: “The acceleration/deceleration in move-ins is due to…”

• • The share of organizations citing increased resident demand as a reason for acceleration in move-ins in Wave 15 remained high (71%); up from a low of 66% in Wave 10 (surveyed mid-July to early-August) but down from a peak of 88% in Wave 12 (surveyed mid- to late-September). Organizations citing hospital placement in Wave 15 (29%) is up from a low of 13% in Wave 12 and down from a high of 41% in Wave 10.

• Resident or family member concerns cited as a reason for deceleration in move-ins in the past 30-days reached the highest point in the survey time series (88%), followed by slowdown in leads conversions/sales (75%). Interestingly, there appears to be a relationship between these two primary reasons.
• While government-imposed ban cited as a reason for deceleration in move-ins remained steady from the prior wave (25%), respondents citing organization-imposed ban increased from 0% in Wave 14 to 17% in Wave 15.

• Between two-thirds and three-quarters of organizations in Wave 15 (63% to 76%) with independent living, assisted living, and/or memory care units note no change in the pace of move-outs in the past 30-days. While greater shares of organizations with independent living units reported deceleration in move-outs than in the prior three waves of the survey (20%), greater shares of organizations with assisted living units reported acceleration in move-outs than in the prior two waves (24%).
• One-third of organizations with nursing care beds (33%) reported an acceleration in the pace of move-outs. This was the largest share since the Wave 5 surveyed in late-April to early-May.

• Resident deaths (unspecified reason) were cited most frequently as a reason for acceleration in move-outs (77%). This is up from 61% in Wave 13. Resident or family member concerns declined from 52% in Wave 13 to 45% in Wave 15, followed by residents moving to higher levels of care (41%).

Change in Occupancy by Care Segment

Respondents were asked: “Considering the entire portfolio of properties, overall, my organization’s occupancy rates by care segment are… (Most Recent Occupancy, Occupancy One Month Ago, Occupancy One Week Ago, Percent 0-100)”

• The shares of organizations with assisted living units reporting increased occupancy is the highest in the survey time series (42%). Just under one-half of organizations with memory care units (45%), 40% with nursing care beds, and roughly one-third with independent living units (30%) noted upward changes in occupancy rates in the past 30-days.
• In Wave 15, similar shares of organizations with independent living units, assisted living units and/or nursing care beds reported roughly equal proportions of increases or decreases in month-over-month occupancy changes.

• Regarding the change in occupancy from one week ago, between two-thirds and three-quarters (63% to 79%) of organizations reported no change. Among organizations with nursing care beds, slightly more reported declines than increases (23% vs. 13%). Occupancy increases were reported in similar proportions to the prior wave by organizations with independent living and/or assisted living units. There were no organizations with memory care units reporting declines in week-over-week occupancy.
  

Organizations Currently Offering Rent Concessions to Attract New Residents and Organizations Experiencing a Backlog of Residents Waiting to Move-In

Respondents were asked: “My organization is currently offering rent concessions to attract new residents,” and “My organization is experiencing a backlog of residents waiting to move-in”

• • More than one-half of respondents in Wave 15 (57%) were offering rent concessions to attract new residents. Organizations offering rent concessions has been above 50% in the survey since mid-September.

• Of the organizations that operate any independent living and/or memory care units (including a combination of other seniors housing and care segments), around two-thirds (69% and 64%, respectively) indicated they were currently offering rent concessions, followed by 62% of organizations with any assisted living units, and fewer than half of organizations with any nursing care beds (43%).
• Separately, in NIC’s 2Q 2020 Actual Rates Report, the average discount for assisted living care units averaged 4.4% ($226) below average asking rates. This equates to an average initial rate discount of 0.5 month on an annualized basis. Learn More About the Actual Rates Initiative.
• Approximately one-quarter of respondents (26%) indicate that their organizations have a backlog of residents waiting to move in. This has remained steady since Wave 12 surveyed mid- to late September.

Improvement in Access to PPE and COVID-19 Testing Kits

Respondents were asked: “Considering access to PPE (personal protective equipment) and COVID-19 testing kits, my organization has experienced that access has improved… Very little, it is still difficult to obtain enough PPE/testing kits in most markets/Somewhat, in some markets it is easier to obtain PPE/testing kits than in others/Considerably, we typically have no difficulty obtaining PPE/testing kits, regardless of market”

• While there’s been some improvement in recent waves of the survey, just over one-half of respondents find it easy to obtain COVID-19 test kits. Respondents reporting easy access to PPE remains roughly one-half.
  

Time Frames for Receiving Back COVID-19 Test Results

Respondents were asked: “Regarding COVID-19 test results (either for staff, residents or prospective residents) results typically come back within…”

• More than one-half of respondents (56%), received their COVID-19 test results within 2 days, up from 13% in Wave 10, surveyed late-July to early-August. Nearly all respondents (97%) received test results within 5 days.

Labor and Staffing

Respondents were asked: “My organization is backfilling property staffing shortages by utilizing … (Choose all that apply).” Note: this question was asked in Wave 3, and then again in Waves 10-14.

• In Wave 15, more than two-thirds of respondents are using agency or temp staff to fill staffing vacancies—70% up from 36% in Wave 3. Although down slightly from Wave 14, most respondents (81%) are continuing to offer staff overtime hours.

 Supporting Property Staff

Respondents were asked: “My organization is supporting property staff who may be experiencing challenges by providing… (Choose all that apply)” Note: this question was asked only in the three survey time periods shown in the chart.

• While fewer organizations in Wave 15 than earlier in the pandemic continue to allow staff to work remotely, three-quarters are still offering flexible work hours (78%). Additionally, fewer are offering additional paid sick leave.

Development Pipeline Considerations

Respondents were asked: “My organization’s projected development pipeline going forward is expected to… (Choose all that apply)” Note: this question was asked only in the three survey time periods shown in the chart.

• About one-quarter of respondents (24%)—more than in the Wave 10 survey (13%) and similar to the Wave 3 survey (27%)—expect their development pipelines to decrease. The reason cited by all of the respondents was uncertainty.

• One in five organizations in Wave 15 (20%) expect their development pipelines to increase. Reasons respondents cited for increase included lower interest rates, planned projects continuing to make progress, growth opportunities in the market, and favorable acquisition pricing.

Owners and C-suite executives of seniors housing and care properties, we’re asking for your input! By providing real-time insights to the longest running pulse of the industry survey you can help ensure the narrative on the seniors housing and care sector is accurate. By demonstrating transparency, you can help build trust.

“…a closely watched Covid-19-related weekly survey of…operators
conducted by the National Investment Center for Seniors Housing & Care…”
The Wall Street Journal | June 30, 2020

The Wave 16 survey is available until Sunday, November 22, and takes just 5 minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please click this link or send a message to insight@nic.org to be added to the email distribution list.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and transparency into market fundamentals in the seniors housing and care space at a time where trends are continuing to change.

As the leading data provider for the seniors housing and care sector, the NIC MAP^® Data Service (NIC MAP) tracks occupancy, asking rents, demand, inventory and construction data for independent living, assisted living, memory care, skilled nursing and continuing care retirement communities (CCRCs), also referred to as life plan communities, for more than 15,000 properties across 140 metropolitan areas. NIC MAP currently tracks 1,208 not-for-profit and for-profit entrance fee and rental CCRCs in these 140 combined markets (1,137 in the 99 combined Primary and Secondary Markets).

CCRCs offer multiple care segments (at a minimum independent living and nursing care) typically by a single provider on one campus. This analysis breaks the care segment types apart from the CCRC community type that NIC MAP includes under the main category of seniors housing. Care segment type refers to each part or section of a property that provides a specific level of service, i.e., independent living, assisted living, memory care or nursing care. The following analysis examines current conditions and year-over-year changes in inventory, occupancy, and same store asking rent growth—by care segments within CCRCs (CCRC segments) compared to non-CCRC segments in freestanding or combined communities to focus a lens on the relative performance of care segments within CCRCs.

Current CCRC Occupancy by Payment Type and Profit Status

In the third quarter of 2020 (two quarters into the COVID-19 pandemic) CCRC occupancy, which is inclusive of stabilized and non-stabilized units, entrance fee and rental payment types, in both not-for-profit and for-profit communities across the Primary and Secondary Markets fell 260 basis points from 2Q 2020, when it was at its lowest point since NIC MAP began reporting the data (89.2%). Prior to the 2Q 2020 trough, CCRC occupancy oscillated around 91% for 22 consecutive quarters. Non-CCRC occupancy averaged 77.7% in 3Q 2020—a very wide 8.9 percentage points lower than CCRC occupancy. Entrance fee CCRC occupancy (89.0%) was 6.4 percentage points higher than rental CCRCs (82.6%), and not-for-profit CCRC occupancy (88.2%) was 6.0 percentage points higher than for-profit CCRCs (82.2%).

 
The wide discrepancies in occupancy rates during the COVID-19 pandemic are varied. They can be explained, in part, because new CCRC residents are generally healthier than residents in other types of seniors housing resulting in lower resident turnover in CCRCs. CCRCs also typically have larger campuses and differentiated residential environments separated by care segment—which may allow operators to mitigate spread of the virus by protecting more vulnerable populations in autonomous settings. Additionally, the contract stipulations of entrance fee CCRCs, which tend to be varied and unique, may attract retirees who may have been less inclined to move out during the pandemic. A special report from NIC’s Executive Survey Insights, regarding CCRC performance for two time periods during pandemic (March 24-April 12 and April 27-May 24) from owners and C-suite executives of operators of seniors housing and care properties across the country, can be found here for additional insights regarding move-in and move-out rates, and changes in occupancy.

Another potential reason for the difference in occupancy rates may be a result of the relative influence of the majority inventory mix in CCRCs compared to non-CCRC communities (freestanding and combined). As shown in the chart, in aggregate, CCRCs are comprised of a majority of independent living care segment units (55.4%), followed by nursing care units (27.0%), assisted living units (13.8%), and memory care units (3.8%). Compared to CCRCs, non-CCRCs have lower proportions of independent living care segment units (14.5%), and higher proportions of nursing care units (52.1%), assisted living units (24.7%) and memory care units (8.6%) than CCRCs. Thus, the overall CCRC occupancy rate, compared to the overall non-CCRC occupancy rate, may be influenced positively by majority unit mix.

CCRCs vs. Non-CCRCs in Detail

The CCRC independent living care segment (which represents 55.4% of CCRC units) garnered the highest occupancy in the third quarter of 2020 (90.4%), as well as the least drop in occupancy year-over-year, falling 2.2 percentage points. The current nursing care segment occupancy rate in non-CCRCs, which represents 52.1% of non-CCRC units, was much lower at 75.5%, and fell 10.4 percentage points year-over-year.

The table below compares each of the care segments—independent living, assisted living, memory care and nursing care—in the Primary and Secondary Markets. The table shows the 3Q 2020 total open units, occupancy and average monthly asking rent—and year-over-year changes for CCRCs and non-CCRCs.

Click to Expand

Higher Occupancy at CCRCs

The CCRC independent living care segment had the highest 3Q 2020 occupancy (90.4%), followed by CCRC memory care (86.2%), assisted living (86.1%), and nursing care (79.0%). Among non-CCRCs, the independent living care segment had the highest 3Q 2020 occupancy (82.6%), followed non-CCRC assisted living (79.3%), memory care (77.7%) and nursing care (75.5%).

The difference in 3Q 2020 occupancy between CCRCs and non-CCRCs was the highest for the memory care segment (8.5 percentage points), followed by the independent living care segment (7.8 percentage points), the assisted living care segment (6.7 percentage points) and the nursing care segment (3.5 percentage points).

Occupancy declined, year-over-year, for each of the care segments. However, CCRCs had lower declines in occupancy than non-CCRCs Among CCRCs, independent living care segment occupancy declined the least (-2.2 percentage points), followed by memory care (-4.5 percentage points), assisted living (-5.5 percentage points), and the nursing care segment   (-9.7 percentage points). Among non-CCRCs, independent living and memory care segment occupancy declined the least (-5.6 and -5.7 percentage points, respectively), followed by assisted living (-6.1 percentage points), and the nursing care segment (-10.4 percentage points).

Higher Annual, Same Store Asking Rent Growth at CCRCs

CCRC same store year-over-year asking rent growth in the third quarter of 2020 was 2.5%, down from the time series high of 4.7% reached in the first quarter of 2019, but higher than the time series low of 2.1% at the end of 2010, beginning of 2012, and the end of 2013. Year-over-year asking rent growth did not vary significantly across the CCRC care segments unlike the non-CCRC care segments; the variation was only 20 basis points for CCRCs but 210 basis points for non-CCRCs. Among CCRCs, the highest year-over-year asking rent growth was 2.1% in the independent living segment; among non-CCRCs it was highest in the nursing care segment (2.1%). The lowest year-over-year asking rent growth was noted for CCRCs in the assisted living care segment (1.9%); in non-CCRCs it was noted for the independent living care segment (0.0%), followed by the memory care segment (0.6%).

Significantly Weaker Inventory Growth at CCRCs

Non-CCRCs had significantly higher rates of inventory growth (year-over-year change in inventory) by segment, than CCRCs. The highest rate of inventory growth was reported for non-CCRCs in the memory care and independent living care segments (4.3% and 4.0%); the lowest was reported for both CCRCs and non-CCRCs in the nursing care segment (0.1% and -0.4%, respectively).

Regional Occupancy Differences are Highest in the Mid-Atlantic, Northeast, and Pacific The current occupancy rates for CCRCs and non-CCRCs by region are shown in the table below. Overall, CCRC occupancy was stronger than non-CCRC occupancy by 8.9 percentage points. Seniors housing and care communities in the Mid-Atlantic, Northeast, and Pacific regions, which were more significantly impacted earlier in the pandemic than other regions, currently have the strongest CCRC occupancy rates ranging from 89.2% to 88.0%. The weakest CCRC (and non-CCRC) occupancy is in the Southwest at 80.9% and 71.5%, respectively—a 9.4 percentage point difference.

Look for future blog posts from NIC to delve deep into the performance of CCRCs. For further information on NIC, its reports, data, and analytics available to providers, please visit the NIC website at www.nic.org.

To learn more about NIC MAP® Data Service, and the latest metro-level data available to support your organization, schedule a meeting with a product expert today.

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The 2020 NIC Fall Conference, though held on a virtual platform, presented all the relevance, insight, and expert analysis that attendees have come to expect from the industry’s premier event. Always a staple, sessions focusing on valuations this year were, for some, of particular interest. Amidst a historic global pandemic, which has driven sharp declines in occupancy rates, increased costs, drawn unprecedented media attention, and hastened operational disruption, NIC hosted two discussions on how all of this is impacting valuations across both seniors housing and skilled nursing property types.

Some themes ran through both sessions. Chief among these was the sense that there is plenty of opportunity for investors and operators. While some capital providers appear to be sitting on the sidelines, others are seeing long-term value, along with market fundamentals that will remain long after the pandemic is behind us.

“Valuations in Seniors Housing: How Have Trends Changed and Why?” began with a calming assessment of the realities of a market that, despite major setbacks, is still seeing deals get across the finish line. Moderator Manisha Bathija, former senior investment officer, independent consultant, kicked off the discussion by asking “What’s happened in the acquisitions market since COVID began?” In his response, Ryan Maconachy, vice chairman, healthcare & alternative assets, Newmark Knight Frank, observed that he’s seen, “new deals, and different types of deals, than we’ve ever had to bring to market.” He continued, “There is a lot of volatility. The market is moving on a daily and weekly basis. The one thing we all have going for us is that there’s never been more capital looking at the seniors housing industry to invest in.”

Maconachy also observed that, “We’re seeing folks get very creative, which again, shows you the resiliency of our industry, that we’re not so in a box that we can’t pivot when necessary, and I think folks are getting more comfortable with that by the day.”

For his part, Ben Firestone, executive managing director & co-founder, Blueprint Healthcare Real Estate Advisors, agreed with his co-panelist, but added that, while capital is available, investors are looking for operators who are able to adapt and survive during this time of disruption. He said, “There’s all sorts of capital – tourists and mainstay investors – but the scarce commodity remains the operator that’s going to get it right.”

In agreeing with that point, Maconachy underlined just how important operators are, saying, “Never before has the operator impacted valuation more than today…the operator premium today is as big as it’s ever been. That’s a huge factor in our opinion, on valuation of a deal with operator A and operator B.”

While pricing is being depressed by drops in occupancy, uncertainty, and higher costs associated with COVID-19, both experts indicated that they are looking at a more positive long-term value in the market. Firestone summarized his outlook, saying, “While pricing might be down a little bit, driven largely by NOI, I think we’ll see a rebound. We’ll see rent growth prevail, we’ll see cash flows continue to grow, and we’ll see absorption. Ultimately, I think we’ll get back to where we were, and then some, in the next 12-18 months.”

In “Valuations in Skilled Nursing: How Have Trends Changed and Why?” Moderator Zach Bowyer, managing director/ head of alternatives, JLL Valuation Advisory, discussing the complexity of skilled nursing, reminded the panel, “There’s an old adage in the space: if you’ve seen one skilled nursing facility, you’ve seen one skilled nursing facility.”

When asked who’s buying and who’s selling in the space, Josh Kochek, CIO, Hana2.0, indicated that activity is far from grinding to a halt, “There are still tremendous amounts of opportunity in the marketplace. We have a fairly robust pipeline today.” He explained, “Some of the traditional buyers in terms of public owners of real estate have pulled back a little, either working through maybe some owned assets they’re having difficulty with, and figuring out how to reposition, transition, and recapitalize. Paired with a little bit of depression in the stock prices that has put some of those traditional buyers on the sidelines, for what will probably be the near term, I would expect that at some point before long they’ll be back in the market.”

Panelist Aaron Becker, senior managing director, Lument (formerly Lancaster Pollard), agreed that activity continues. On valuations, he observed that they appear to be holding up better than expected. He said, “Valuations are remaining relatively stable…We’re not seeing as much distressed property as I think some people would expect…”

Not everyone, however, is making capital available at pre-COVID prices, or at all. According to Kochek, “What we’ve seen are lenders that don’t necessarily convey that they’re out of market, but have changed their terms so substantially vs what they were six to twelve months ago, either with LIBOR floors that were either non-existent or 25 basis points, historically, now starting to get into the 50 to 100 basis point range on the LIBOR floor, which in effect is driving up your cost of borrowing.”

Cap rates have been much discussed in recent months. Becker indicated they aren’t the major problem some may have feared, “on the cap rate side, they haven’t risen as much as we feared early on. The cap rates haven’t been much of an issue on the valuation side. The challenge for lenders is focusing on the cash flows.”

Becker seemed in agreement on that point, and offered his outlook, which echoed the optimism expressed in the seniors housing session. “We will get back to a period where its more “normal,” where things will look better on an income statement, the balance sheet, etc., so just navigating this difficult time right now is really just a function of the passage of time.”

The Labor Department reported that nonfarm payrolls rose by 638,000 in October and that the unemployment rate fell to 6.9% from 7.9% in September. This suggests that the employment recovery from the COVID-related drop in March and April continues. Moreover, the increase is stronger than it seems on the surface because it includes a 147,000 decline in temporary Census workers. The consensus estimates for October had been for a gain of 580,000.

Roughly 12.1 million jobs have been recovered during the May to October period. This is a little more than half the 22.2 million jobs lost since the pandemic began. The pace of improvement is slowing, however. In July, the economy added almost 1.8 million jobs and another 1.5 million in August. Gains slowed to 672,000 in September and 638,000 in October

Health care added 58,000 jobs in October, with the largest gains occurring in hospitals, offices of physicians and dentists and outpatient care centers. These increases were partially offset by a decline of 9,000 workers in nursing and residential care facilities.

The 1.0 percentage point drop in the October unemployment rate to 6.9% was good news and marked the sixth consecutive month of improvement. It still is above the pre-pandemic level of 3.5% seen in February, however, but well below the 14.7% peak seen in April. This jobless rate fell for adult women (6.5%), adult men (6.7%), teenagers (13.9%), Whites (6.0%) and Asians (7.6%), Hispanics (8.8%) and Blacks (10.8%). The number of unemployed persons fell by 1.5 million to 11.1 million.

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 1.2 million to 3.6 million, a figure that suggests that is continues to be a very challenging time for many Americans. Long-term unemployed persons account for 32.5% of the total number of unemployed persons. The number of permanent job losers fell 72,000 to 3.7 million. Moreover, a separate report issued yesterday on unemployment insurance claims showed that more than 21 million workers remain on government assistance in the week ended October 17.

The underemployment rate or the U-6 jobless rate fell to 12.1% in October from 12.8% in September. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.

Average hourly earnings for all employees on private nonfarm payrolls rose by $0.04 in October to $29.50, a gain of 4.5% from a year earlier. The large employment fluctuations over the past several months, especially in industries with lower-paid workers—complicate the analysis of recent trends in average hourly earnings.
The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work increased by 0.3 percentage point in October to 61.7% and is 1.7 percentage points lower than in February. The employment-population ratio increased by 0.8 percentage point to 57.4% in October but is 3.7 percentage points lower than in February.

The change in total nonfarm payroll employment for August was revised up by 4,000 from 1,489,000 to 1,493,000 and the change for September was revised up by 11,000 from 661,000 to 672,000. Combined, 15,000 jobs were added to the original estimates. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

While the October gain in jobs is welcome news, the labor market continues to be strained and the recent spike in the virus across many states could hamper further gains. Indeed, many states are backtracking plans to reopen as coronavirus infections are rising again. As a result, many economists continue to urge Congress and the White House to implement further fiscal stimulus to keep the recovery on track. Some anticipate that without a fiscal stimulus package the recession will deepen further. Moreover, uncertainty about the path of the COVID-19 virus as we enter the fall and winter months as well as the lack of a vaccine continue to weigh on business owners hiring decisions.

Telehealth, telemedicine, virtual care, eConsult, store-and-forward…what does this all mean? More importantly, how do you better serve your resident populations — in a global pandemic and onward? Telehealth is a broad term that seems to get caught in a tangled web of policy, compliance, and reimbursement. However, telehealth brings incredible promise to our highest risk populations in this pandemic, and has transformational implications for the way healthcare will be delivered even once the pandemic is behind us.

Imagine an 87-year-old woman living in a senior living community. She falls on her way to the bathroom, hurting her hip and hitting her head. She is able to call for help and the night staff comes to her room. The young man on duty helps her back in bed, but knows she needs medical attention. He types her name into the iPad on the wall and is immediately connected with an ER doctor. The physician introduces herself, asks a few basic questions, and directs the night staff employee through a physical examination. She then directs the night staff employee to take a photo of the resident’s eyes to include in a neurology consult. The physician reassures the woman that everything is fine for now, but that she will need to get an x-ray in the coming days. The physician also explains that she will deliver the news from the neurologist in the morning, but there is nothing to worry about now. The woman is able to fall asleep and wakes up to a message from her ER doctor and a neurologist providing her detailed instructions around her care plan and the next steps — reassuring her she will be alright. She shares the videos with her senior living facility staff, children, and grandchildren.

How was this possible? First, the senior living community had synchronous primary and urgent care telehealth services. The operator of the property had already gathered key health data, emergency contacts, and consent, all of which was integrated into their in-room tablet and HIPAA compliant telehealth portal. The telehealth ER doctor was able to immediately access the key information and pair it with the incident requiring medical attention. Second, the operator and telehealth provider had asynchronous telehealth services for specialty care and video communication. This enabled the ER doctor to access specialists and receive care plan guidance within hours while also communicating key information to the resident in a shareable, repeatable, and personalized video message. This solution is what enabled the woman to have a neurology consult without leaving her room and receive a summary of her experience and next steps to re-watch, show her staff nurses, and share with concerned family.

Effective use of telehealth can result in reductions in ER visits, readmissions, and unnecessary COVID-19 exposures, while empowering front-line staff and improving the resident and family experience altogether. Telehealth has the potential to drive immense value for residents and providers alike within seniors housing. It may feel like this vision is a long way off, but the solutions are ready and available — operators need only understand what their options are and thus what best fits with their priorities.

A Brief History

The history of telehealth goes back several decades. Telehealth was first authorized in Medicare in 1997. Shortly thereafter, the internet boom democratized access to information, accelerating innovation across industries and instigating the rise of consumer choice (“consumerism”). The Affordable Care Act initiated a healthcare course correction toward value-based care, all while consumers were starting to expect the same kind of options, service, and convenience with their healthcare that they were experiencing when buying groceries, booking a plane ticket, or customizing a pair of shoes.

By the beginning of 2020, the majority of healthcare providers and hospital systems had started offering telehealth or at least had it on their strategic roadmap for the coming years, as it demonstrated the potential to not only please healthcare consumers, but also address rising healthcare costs and quality care access inequities. As such, telehealth has been on an upward trajectory for decades, albeit a slow one, until now.

When COVID-19 hit the U.S., cities, counties, and numerous states went under shelter in place policies. For millions of Americans, and thousands of healthcare providers, the need for telehealth options became urgent. CMS used emergency rulemaking to provide Medicare telehealth flexibilities for the duration of the pandemic. This expanded telehealth-eligible services, provided tech mode flexibilities, and expanded the types of practitioners eligible to provide telehealth services. Adoption skyrocketed, both by physicians and their patients, primarily older adults.

COVID-19 has significantly accelerated the proliferation of telehealth as a key element in care delivery. Now, telehealth is in the toolkit of nearly all providers and is an option for nearly all patients, including millions of seniors housing and care residents. According to a study done by McKinsey & Co, by May 2020, 76% of consumers said they are now interested in using telehealth going forward. User adoption coupled with telehealth’s impact potential on triage, coordination, productivity and convenience will ensure its continued presence in healthcare — and seniors housing — as we know it.

Telehealth Today

Telehealth can simply be defined as care delivered via virtual communication between patients and healthcare providers or providers to other providers.

There are many vendors offering a variety of telehealth solutions in today’s market. it is important to understand the defining variables that sit behind the vast array of options.

1. Modality: Telehealth can be delivered through a variety of media — audio, video, or text. It is critical to consider the richness of the media. Video and other virtual media are the closest to in-person, while text may feel impersonal or automated.
2. Timing: Telehealth can be delivered both synchronously and asynchronously. Synchronous refers to live communication such as a phone call. Asynchronous refers to communication that is delivered and then stored until the recipient reviews it — think of a voicemail (this is also referred to as store and forward). The value of synchronous telehealth is that it most closely resembles an in-person appointment. Asynchronous telehealth can also provide significant value to both patients and providers, as it eliminates the need for scheduling and can be referred back to, shared, or re-consumed.
3. Participants: The most common use for telehealth is between patient and healthcare provider. Telehealth also empowers senior living care workers to take an active role in their residents’ care journeys, through three-way visits. The ability to include family or caregivers in the care process leads to better communication and decision-making for the resident. Telehealth also extends to virtual communication for care delivery purposes between two healthcare providers — think of a second opinion, or a consult. This mode of telehealth can collapse the care cycle by empowering frontline providers with specialist expertise — reducing wait times, coordinating care, and reducing medical costs.
4. Provider integration: Many telehealth companies offer hardware or software to facilitate care. Others offer integration with provider networks, and occasionally operate as their own health system. Doctor On Demand, for example, has a network of board-certified primary care physicians, psychiatrists, therapists, and physician-led care teams. Similarly, Sitka is supported by a vast network of specialty providers such as dermatologists, cardiologists, neurologists, etc.

There are a myriad of options, and there is a lot to consider, but this should help set structure around the landscape of offerings.

Telehealth and Senior Care

Senior housing and care providers are uniquely positioned to reap value from telehealth for residents, families, staff, and the senior living communities themselves. Seniors housing has a captive user base around the clock and immediate economies of scale upon adopting a new solution. These communities largely have the power to control access and devices, while the expertise needed for physical examinations is usually available on site, oftentimes eliminating the need for in-person visits to your community. By employing telehealth solutions, operators can significantly decrease the need for in-person trips to the doctor’s office, or the emergency department, which families and residents now prefer to avoid.

The seniors housing population itself has greater need and greater reward for telehealth. The senior population accounts for the highest proportion of medical costs in the US, driven by ER visits and inpatient stays. Many times, conditions are worsened by travel and unnecessary exposures — avoidable with telehealth. Also, the senior population is eligible for value-based care (e.g., capitated Medicare Advantage Plans), which eliminates the incentive for excessive doctor visits or procedures and instead encourages timely and preventive care.

Seniors housing and care communities are home to over three million older adults, most of whom have multiple chronic conditions. The pandemic has brought with it heightened fear by these seniors and their adult children of traditional healthcare delivery settings, such as the hospital, the emergency department, and even the waiting room of the doctor’s office. Seniors increasingly both want and need to have healthcare services brought to their residential communities.

A clear opportunity exists for every type of senior living property, but telehealth is not one size fits all. Each senior living type, brand, and property should be assessed to identify how telehealth can be implemented to solve its most pressing needs.

First, structural elements must be assessed: skilled nursing availability, staff coverage, resident health plan membership mix, technological infrastructure (e.g., wifi, device access). Each of these factors will be key considerations as you balance budgetary constraints and feasibility of the different telehealth offerings.

It’s also important to factor in the intangibles: brand, culture, family involvement, resident investment in community decisions, staff / management relationship. Think about the goals of your proposed telehealth solutions and how they fit into your organization’s identity. While telehealth poses significant value, does the solution you are considering align with your organizational strategy and mission? Consider making small adjustments to better fit with competing priorities.

As you set off on this journey, it will be important to remember the fundamental rule of change management: key stakeholders must be included in the conversation and bought-in at each step. Such stakeholders may change depending on the operator or property type, but consider leadership, staff, residents, and families. Inclusion may entail conducting a pilot with specific residents and staff that have high likelihood to champion the chance, or hosting a marketing event with families early on to communicate the goal for the new telehealth solution. Buy-in will be critical to early stage implementation and to long-term success of telehealth in your organization.

Telehealth is Here to Stay

Change management may be daunting, but telehealth is here to stay. The sooner your telehealth solution is up and running, the better your communities and your residents will be in the long run. Telehealth is a powerful way to offer your residents safe and timely care, and will only become more essential in the future.

In his recent “NIC Talk,” given at the 2020 NIC Fall Conference, Dr. Tim Ferris, CEO of the Mass General Physicians Organization, said that when it comes to the utilization of telehealth to bring services to seniors with chronic conditions, “We are not going back.” Indeed, telehealth offers senior housing providers opportunity for onsite triage and proactive management of residents’ chronic conditions, allowing this high-risk population to stay at home. Pandemic necessitated telehealth will hopefully diminish soon, but continued investment and change management will ensure improved healthcare services, outcomes, and comfort for seniors in years to come.

Sources: McKinsey report — Telehealth: A quarter-trillion-dollar post-COVID-19 reality?

This article was originally posted on Medium by Sitka, Inc.