The COVID-19 Pandemic.
NIC Co-Founder and Strategic Advisor Robert Kramer has identified “Six Key Drivers” that will shape the senior living industry over the next 10 years. Kramer is also Founder & Fellow at Nexus Insights, a think tank to advance the well-being of older adults through innovative models of housing, community, and healthcare. NIC Notes will publish a bi-weekly series detailing each key driver. View the introduction to the series. What follows is an analysis of the first key driver: the pandemic.
The pandemic has had a major impact on the senior living industry. Beyond lower occupancies and added expenses, the crisis has changed the way the industry is perceived and operates.
Certain trends have been accelerated such as the greater use of technology. At the same time, the pandemic has exposed the limits of our healthcare system, dramatically worsened the labor shortage, and underscored the crushing effects of isolation experienced by many of our elders.
The wide-ranging consequences of the pandemic will play out over the next decade. Here are six ramifications of the crisis that will change the senior living industry.
A loss of consumer trust in our setting, leading to a demand for transparency.
The loss of trust is not the same as the consumer who hopes to avoid senior living altogether. Rather, there is a real concern about the health threat of a congregate setting. Is it dangerous for me to put my mom in your building? We’ve never experienced that before. Transparency is key to reestablish trust. We must obviously provide transparency around health, infection control and prevention. This should include COVID-19 vaccination and booster rates in our buildings. More transparency in other areas is needed too. For example, operators should consider posting details on pricing and be prepared to share information on staffing levels, especially for night and weekend shifts. Consumers are also starting to ask about wage levels for the hourly staff. They want to know how you care for your staff because that serves as a proxy for how you will care for them or their loved ones.
Forced entry into the 21st century world of digital.
Healthcare has notoriously lagged behind other major sectors in its adoption of technology and senior living has lagged far behind the healthcare sector. COVID-19 quickly forced senior living into the 21st century digital world. The old ways of doing things didn’t work anymore. Modes of communication with residents, families and staff changed. We couldn’t ship residents out to hospitals or take them to doctors’ offices. Those were dangerous places that didn’t want them. So, we had to learn new ways to deliver care. Our multipurpose room was closed. Our van was going nowhere. So, how were we going to engage our residents when they were in their rooms? What about sales and marketing? The tours, lunches, and in-person appointments couldn’t happen. The change impacted pretty much every aspect of the business with the emergence of telehealth, Zoom calls, and virtual programming and tours. We were forced to enter the 21st century digital world and there is no return.
Mental and behavioral health emerged from the shadows and will not fade away.
The pandemic has exposed issues around mental and behavioral health. This is true for society at large, as well as for our workforce and our residents. They have suffered greatly from stress, anxiety and fear. Many residents, in particular, have endured isolation and loneliness, a risk factor for cognitive disorders and other mental disturbances. The need to address mental health issues will not recede. Programs to address mental and behavioral health for staff and residents will be necessary.
The moat around our buildings has collapsed.
What do I mean by that? During my entire career in the industry, particularly in private pay senior living, and especially with lawmakers in Washington D.C., a moat has encircled our buildings. We didn’t admit that any healthcare happened inside our buildings. Therefore, there was no need for the federal government to take an interest in our industry and regulate us. After 30 years of advocating that position, the two largest private pay senior living associations quickly did a 180-degree turn when the pandemic hit. They pointed out the frailty of our residents and that senior living is the front line of defense of the entire healthcare system in the face of a virus to which frail, older adults are the most vulnerable. If the government didn’t help us to meet our residents’ healthcare needs, the hospital ICUs would be overwhelmed.
It was a tough sell at first because Members of Congress said, “We just thought wealthy, healthy, older seniors lived in your buildings, played golf and had fun. What do you mean they’re frail, and have all these ADLs and chronic conditions?” Senior living is now considered part of the healthcare continuum, which will impact the industry.
Infection control and prevention are the new table stakes.
The bar has been raised. It will never be lowered again. People won’t move in because of your infection control and prevention programs, but they will not move in if their concerns about infection control are not addressed. So, good infection control is necessary, but not a sufficient condition for a move. There’s going to be a flu season every year, complicated by the ongoing pandemic. Consumers want to know what protocols are in place. How does the community plan to handle mom’s engagement in the middle of flu season or when a new wave of COVID hits?
COVID has punctuated the end of the 2nd generation of senior housing and care.
From 1960 to 1990, we had the first generation of product. Primarily, these were not-for-profit retirement communities or board and care homes, driven by a mission. The Great Society legislation of 1965 launched Medicare and Medicaid. The explosive construction of nursing homes took off, and half of those homes are still in operation today, some with three and four bed wards. From 1990 to 2020, we saw explosive growth of independent living, assisted living and dedicated memory care properties driven by the entry of countless for-profit providers into the industry.
A few senior living pioneers opened properties in the ‘70s and ‘80s, such as Bill Colson at Holiday Retirement and the Klaassen’s at Sunrise. But the industry really took off in the ‘90s because of baby boomer daughters. Prior to this time, long lived elders were cared for by their adult children, usually their daughters. But for the first time, most of these daughters were in the workforce. The Klaasen’s, for example, realized they weren’t marketing to the mother. They were marketing to the daughter, and she wasn’t going to put mom in a nursing home. The daughter saw the chandelier, the Queen Anne furniture, the curved stairway and assisted living took off.
The 3rd generation of senior living, from 2020 to 2050, will have new products and new leaders. About 70% of all not-for-profit providers in the country expect their leadership to change in the next three to five years. The for-profit space will see a lot of acquisitions and changes in operational leadership. The 3rd generation of senior living will also have a new kind of customer. This new consumer is one of the “Six Key Drivers Shaping the Future of Senior Living.” A future blog post will detail our changing customer profile and what these consumers expect from senior living.
Next Up—Key Driver #2: The Endemic Staffing Crisis. The labor shortage will continue. How can providers recruit and retain the best workers?