The NIC MAP Data Service recently released national benchmark data through mid-year 2018 for actual rates and leasing velocity.  Key takeaways include:

• Average initial rates at the time of resident move in were below average asking rates for both majority independent living and majority assisted living properties, with monthly spreads larger for majority assisted living properties throughout the entire reported period.
• As of June 2018, initial rates for majority assisted living properties averaged 9.2% below the average asking rate, which equates to an average initial rate discount of 1.1 months on an annualized basis, up from 1.0 months in December 2017. The discount for majority independent living properties was smaller at the equivalent of 0.6 months rent and was down from 0.9 months in December 2017.
• Average in-place rate growth for majority assisted living properties has accelerated since year-end 2017, with the average in-place rate in June 2018 up 1.5% from the year-earlier average rate. Similarly, for majority independent living properties, in-place rate growth accelerated during the past six months, with year-over-year rate growth of 1.7% in June 2018. The acceleration could be seasonal, as leasing activity generally picks up during spring and summer months. Compared with year-earlier growth rates, the June pace is relatively steady.
• Growth rates for average majority independent living initial rates were 4.8% above year-earlier levels in June 2018, registering the strongest pace in the 17 months that NIC has reported annual growth rates and significantly more than the in-place rate growth of 1.7%. In the time that NIC has reported this data, annual growth in initial rates have generally been negative and underperformed rate growth for in-place rate, so the June pattern bears watching.
• Growth rates for average majority assisted living initial rates averaged 2.0% from year-earlier rates in June 2018, also above the in-place rate growth of 1.5%. Annual growth in majority assisted living move-in rates has been stronger than in-place rate growth, however, for only four of the past 12 months.
• The rate of move-ins exceeded or equaled the pace of move-outs in nine of the last 12 months for majority assisted living properties. In January and February, the rate of move-outs exceeded move-ins which may be related to the severity of the flu season. There was no clear monthly pattern for majority independent living properties in the past 12 months.

This Seniors Housing Actual Rates Report provides aggregate national data from approximately 250,000 units within more than 2,500 properties across the U.S. operated by 25 to 30 seniors housing providers. Note that this monthly time series is comprised of end-of-month data for each respective month.

The second quarter 2018 NIC Skilled Nursing Data Report was released last week.  The report includes key monthly data metrics from October 2011 through June 2018.  The report also includes the latest urban vs. rural and revenue mix trends.

Here are some key takeaways from the report:

1. Pressure on skilled nursing occupancy continues as the latest data shows occupancy decreased 79 basis points to a new low at 81.7% as of the second quarter 2018. Year-over-year occupancy decreased 137 basis points from 83.1%.  The decline in occupancy is not unexpected as the data has shown a decrease from the first quarter to the second quarter in past years as well.  The second quarter decrease in occupancy was evident across all geographic areas with rural areas experiencing the sharpest decline, dropping 89 basis points quarter-over-quarter.

2. Quality mix declined 127 basis points at the national level to end the second quarter at 34%, which is the lowest level within the time-series data going back to October 2011. Year-over-year quality mix decreased 142 basis points from 35.4% in June of 2017. The main driver of the decrease in quality has been the decline in Medicare patient day mix which fell 129 basis points quarter-over-quarter and now stands at a time-series low of 12.1%. Medicare patient day mix has declined 452 basis points since October 2011.  However, the trends in quality mix are completely different when looking across geographic areas as quality mix has increased 135 basis points in rural areas since October 2011.
3. Managed Medicare patient day mix also saw an expected seasonal dip from the first quarter to the second quarter 2018 as it decreased 41 basis points ending at 6.4% at the national level. When compared to a year ago, the data shows that the growth in managed Medicare patient mix has been relatively flat with a 4 basis point decrease, which is an interesting trend considering the discussions about the increase in managed Medicare throughout the sector.  However, this could also be reflecting more pressure on length of stay from managed Medicare which could result in lower overall patient days.  This recent trend also shows up when looking at managed Medicare revenue mix year-over-year as it decreased 11 basis points to 9.9%.  Although the data shows a drop quarter-over-quarter in managed Medicare across all geographic areas, the managed care penetration varies when comparing urban vs. rural areas.  Rural area managed Medicare patient day mix stands at 3% whereas urban area is at 7.7% as of the second quarter 2018.  Managed Medicare plans can choose to operate in more densely populated and/or more affluent and healthier areas which could explain the lower penetration in rural areas.

4. Private patient day mix at the national level increased slightly from the first quarter to the second quarter 2018. However, the longer term trend continues downward as year-over-year it declined 78 basis points to 8.8%.  This downward trend persists across all geographic areas, but the level of private day mix is considerably different in urban vs. rural areas.  Private patient day mix is highest in rural areas at 15.4% which is a significant portion of patient days and reflects the fact that there are fewer options for private pay in rural areas.  This is also evident in the revenue mix reflecting the financial importance of private pay for rural skilled nursing properties as 13.9% of revenue comes from private pay as of the second quarter 2018.

The NIC Skilled Nursing Data Report is available here. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form. NIC maintains strict confidentiality of all data it receives.

At the upcoming 2018 NIC Fall Conference, the “Innovations That Work” session will share ideas on innovative technologies and tools that are changing the way operators and investors care for residents. Rapid-fire, seven-minute presentations on five key topics and moderated by Arnold Whitman, Founder and Chairman of Formation Capital, LLC, will address real-world examples of innovative solutions to some of the most pressing challenges in the industry today. Topics include how to:

• reduce staff turnover
• decrease re-hospitalization rates
• use artificial intelligence to help memory care patients
• apply predictive analytics to achieve 5-star rating and advance patient care
• implement cloud-based software to improve quality at the end of life

Further descriptions are below:

Jayne Keller, vice president of operations at Capella Living Solutions, will share ideas to reduce staff turnover that include how to use innovative thinking to develop a sense of community between staff and residents. Keller will tell us how high staff turnover impacts residents and will explain how the implementation of new perspectives has helped to decrease staff turnover at her properties.

Tim Reilly, vice president of human resources at Benchmark Senior Living, will also address how to reduce turnover rates in his lightning round talk. Reilly will share newly collected data from an analytics software package that can help predict the tenure of job applicants as Benchmark works to attract and retain staff.

Allen Pindell, senior vice president of information services and analytics at Lexington Health Network, uses telehealth solutions for after-hours management of unnecessary hospital readmissions. Pindell will share the win-win approach this innovation has had on patient experience, relationships with hospitals, physicians, and, most importantly, the bottom line.

Paul Liistro, managing partner with Arbors of Hop Brook, has also implemented artificial intelligence and predictive analytics to achieve 5-star ratings and improve patient care.

Alan Fox, executive director of WindChime of Marin, will share how memory care patients are most likely to suffer from falls and have a high rate of hospital admissions. Advanced artificial intelligence has allowed staff at WindChime to monitor resident falls and alert staff to assist in making quicker decisions on how to best care for memory care residents.

And finally, Phil Fogg, CEO of Marquis Company, will share cutting-edge, cloud-based software solutions used to help improve the quality of life at the end of life for patients and family alike.  Fogg will share how this software can help by providing regular patient updates and tutorials for difficult conversations.

If you will be attending the conference, we invite you to participate in this innovative and thought-provoking session on Friday, October 18, from 9:45 AM to 10:45 AM. Join us and learn how your peers are tackling everyday issues by incorporating innovative technology.

To learn more, please visit the NIC Fall Conference website.

The Labor Department reported that there were 201,000 jobs created in the U.S. economy in August, above the consensus expectation of 190,000.  However, revisions subtracted 50,000 to the prior two months as June was revised to 208,000 from 224,000 and July was revised to 147,000 from 157,000.  Payrolls have averaged 207,000 per month so far this year, up from 182,000 last year.

The unemployment rate was unchanged at 3.9% in August and was down from 4.4% one year ago. The jobless rate remains well below the rate of what is generally believed to be the “natural rate of unemployment” of 4.5% and continues to suggest that there will be growing upward pressure on wage rates.  The jobless rate is calculated from a different survey than the survey used to calculate the number of new jobs (the household versus the establishment survey, respectively).  Among major worker groups, the unemployment rate for adult men was 3.5%, adult women 3.6% and teenagers 12.8%.

A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—fell to 7.4% in August from 7.5% in July and was down from 8.6% in August 2017.  Last month’s U-6 rate was a 17-year low.

In August, employment in health care rose by 33,000. In the past year, health care has added 301,000 jobs.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work fell 0.2 percentage points to 62.7%, near its cyclical low of 62.5% in October 2015.  The low rate at least partially reflecting the effects of an aging population.

Average hourly earnings for all employees on private nonfarm payrolls rose in August by ten cents to $27.16. Over the past 12 months, average hourly earnings have increased by 77 cents, or 2.9%.  This was a nine-year high.  Last year, they averaged 2.6%.

The August jobs report and the acceleration in average hourly earnings will provide further support for increases in interest rates through 2018 by the Federal Reserve. As widely expected, the Fed increased the fed funds rate by 25 basis points at its June FOMC meeting, the second increase in 2018.  The Fed has raised rates by a quarter percentage point seven times since late 2015, and most recently to a range between 1.75% and 2.00%, after keeping them near zero for seven years.  The June projections by the Fed now show a total of four increases in the fed funds rate are anticipated in 2018 (two of which have already occurred), up from an earlier expectation of three.  This would bring the benchmark rate to a range of 2.25% to 2.5% by year end.  The Federal Reserve also upgraded its view of the economy by substituting the word “strong” for “solid” in the statement that policy makers released after its meeting.  Further increases in the fed funds rate are anticipated in 2019.  Their projection for the fed funds rate in 2020 is 3.4%.  Hence, it is likely that there will be another 25-basis point increase announced by the Fed at its September meeting in two weeks and another one at its December FOMC meetings.

Popular NIC Talks series returns to fall conference

Today’s disruptive innovations often determine the future. Uber has upended the transportation business. Amazon changed retailing.

The same holds true for the concept of aging. Disruptive innovations will change the future of the aging experience and drive how society responds to the needs of an aging population in the years ahead.

With this in mind, the future of aging will be highlighted this year at NIC Talks. The popular series of 12-minute TED-style talks returns for a fourth time to the 2018 NIC Fall Conference, Oct. 17-19, Sheraton Grand Chicago.

Over the course of two days, NIC Talks will feature eight thought leaders, primarily from outside the industry, who will address the topic, “How Am I Changing the Future of Aging?”

NIC Talks will be presented during sessions on Thursday afternoon and Friday morning. NIC Founder and Strategic Advisor Bob Kramer will moderate the program.

Speakers will not specifically focus on seniors housing, noted Kramer. “Instead, they will present the innovative trends that will disrupt the future of aging and aging services.”

NIC Talks will address several broad themes: culture and workforce issues; artificial intelligence and applied technology; and quality of life and caregiving. Here’s quick preview of some of the topics and speakers.

Culture and workforce issues

As the industry grapples with a shortage of workers, several speakers will provide new insights into the issue. As Kramer noted, “It’s not just the lack of caregivers.” The industry needs to connect with workers on a deeper level in order to recruit and retain talent.

NIC Talks speaker Dwayne J. Clark will spotlight the importance of company culture. As co-founder and CEO of Aegis Living, Clark has created a culture of innovation based on its most important asset: its workers. He will detail his successful approach, which has led to innovative architecture, a nonprofit that supports employees in need, and fun and unusual ways they reward employees.

Chinwe Onyeagoro will provide insights into how to create a high-trust, high-performing workplace culture. Onyeagoro’s analytics firm, Great Place to Work, studies more than 10,000 organizations a year. She’ll present new research on workplace trends in the senior living industry and share the impact of high-performing cultures that inspire a sense of purpose.

Speaker Kelly Leonard from The Second City—Chicago’s famed comedy/improv theater—will share current research using improv techniques to improve interactions with people with dementia and Alzheimer’s. Leonard will share how learning this application improved his end-of-life interactions with his brother Kyle, showcasing the power in caregivers applying these techniques.

Artificial intelligence and applied technology

Technology has the ability not only to provide a better quality of care, but a better quality of life, noted Kramer. He foresees a time when technology will allow medical practitioners and caregivers the opportunity to spend most of their time interacting with residents instead of on administrative work. “Technology will have a huge impact on frontline workers,” said Kramer.

As Chief Technology Officer at NEST—Google’s smart home technology company—Yoky Matsuoka is one of the nation’s thought leaders on advances in intelligent home automation. At NIC Talks, she will highlight the challenges of building technology that seamlessly blends into people’s lives, and discuss specifically how this technology is being adapted to assist elders.

Renowned tech consultant Chetan Sharma will explore the idea of aging in place amid a significant technological shift to connected intelligence. He will describe how sensors are providing tremendous amounts of data on daily life and how intelligent software is helping us understand that data. This combination of sensors and software is dramatically altering industry after industry, and will shape aging and care in the coming decades.

Quality of life and caregiving

“Quality of life involves much more than just good quality of care and good health outcomes involve much more than good medical care,” noted Kramer. “We need to think about the social determinants of health.”

Two speakers will address quality of life issues and their impact on health and healthcare costs.

Lisa Marsh Ryerson is president of the AARP Foundation and a noted expert on social isolation. She will discuss loneliness—which from a health impact standpoint is the equivalent of smoking fifteen cigarettes a day. Loneliness leads to depression, and depression leads to the worsening of chronic conditions—all of which can be helped by community engagement.

Speaker Susan Dentzer will talk about the key trend of hospital at home, which will have major repercussions on the role of seniors housing in elder care. Dentzer is CEO of the Network for Excellence in Health Innovation, a nonprofit organization seeking intelligent ways to advance healthcare at reasonable costs. She will provide a look at healthcare without walls, how seniors housing can prepare and participate, and the impacts on health outcomes with this approach.

“Healthcare and eldercare will be understood differently in the future,” noted Kramer. He added that NIC Talks is a provocative forum where conference attendees can get a glimpse into the future and challenge their own thinking about aging and aging services. “These ideas will transform the aging experience,” he said.

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