Understanding the factors that have contributed to high penetration rates of COVID-19 in select nursing homes is essential to the development of strategies and policies that will help prevent and mitigate future disease outbreaks. Recently published studies from academics at Brown University, Harvard University, and the University of Chicago have suggested that there are a few key characteristics that can be associated with higher penetration rates of COVID-19 in U.S. nursing homes. Some of the identified factors are to be expected, but certain factors that did not have a significant bearing on COVID-19 cases may be surprising.

First, let’s look at the factors that were found to contribute to an increased likelihood of a nursing home having a documented COVID-19 case. 

Facility Size and Location

David Grabowski, PhD, a professor of health care policy at Harvard Medical School, and colleagues conducted an analysis of 9,395 nursing homes to examine the association between certain characteristics and the likelihood of having a documented COVID-19 case. Larger facility size and urban location were both significantly related to increased probability of having a COVID-19 case. 

With regard to facility size, the study found that while smaller facilities are less likely to have outbreaks, the outbreaks at small facilities affect more patients per bed. This is likely reflective of a number of characteristics of smaller facilities, such as higher patient turnover and the possibility that isolating COVID-positive residents is more difficult for smaller facilities. 

Speaking on his own research, Dr. Vincent Mor, a Brown University School of Public Health professor, reported “the spread is affected more by the facility size and community prevalence due to the virus’ characteristics. Simply put, nursing facilities faced a perfect storm of an opportunistic virus, a vulnerable population base, resources shortages born of years of underfunding, and current policies that favored an acute care focus over all other care settings.”

Non-Chain Status

Skilled nursing properties that are part of a larger chain are more integrated and therefore more likely to have the resources to allow a quicker and more systematic response across their nursing homes. This includes access to resident and staff testing and access to PPE. Nursing home chains are also more likely to have a Chief Medical Officer, who can provide guidance to facilities on best practices for infection control. 

Percentage of African American Residents

In early May of this year, evidence began circulating that African Americans were disproportionately being affected by COVID-19, compared with whites and other ethnic groups. This was also evident in seniors housing properties, with studies showing that the likelihood of having a COVID-19 outbreak in seniors housing and skilled nursing properties is correlated with the proportion of African Americans residing in the property. 

Nursing homes are more likely to draw upon and employ staff from the neighborhoods in which they are located.  This is also the case for the residents/patients in those properties. Hence, nursing homes often reflect the demographic characteristics of the neighborhood in which they are located. As people in predominantly non-white neighborhoods are most affected by the pandemic, these factors are also putting nursing homes in these areas at the most risk. 

Tamara Konetzka, PhD, a health economics and health services research professor with the University of Chicago, presented her team’s findings to the Senate Select Committee on Aging on May 21, 2020. The first key result “found a strong and consistent relationship between race and the probability of COVID-19 cases and deaths. Nursing homes with the lowest percent white residents were more than twice as likely to have COVID-19 cases or deaths as those with the highest percent white residents.”

The study’s findings confirm that the patterns of COVID-19 infections and deaths in nursing homes are consistent with wider racial and socioeconomic disparities. Nursing homes serving traditionally underserved populations are bearing the worst outcomes of the pandemic.

Five-Star Rating Not Significantly Related

Given the asymptomatic spread of the virus, inadequate testing, and the fact that nursing homes cater to both post-acute, rehabilitative patients as well as highly vulnerable high-acuity patients in need of long-term care, it may seem inevitable that many of these congregate setting communities would become infected with the virus. In addition, there have been challenges with acquiring the appropriate amount of personal protection equipment, which has made it that much more difficult to keep patients safe. It may seem likely, therefore, that lower quality ratings should result in higher infection rates. Traditional quality metrics, however, such as the Centers for Medicare and Medicaid Services (CMS) five-star rating system, have been shown not to be a reliable predictor of COVID-19 infection rates. 

This finding prompted some pushback from CMS, however, which argued that “facilities that had a one-star quality rating were more likely to have large numbers of COVID-19 cases than facilities with a five-star quality rating.” While CMS is correct in their assertion, Konetzka’s findings indicate that variations in COVID-19 infection and mortality rates do not correlate to star-rating alone. CMS’ position falls short of a full explanation. 

Further, both the direction and strength of the relationship between star ratings and COVID-19 cases across and within states is inconsistent. Konetzka notes, “In some states, such as Illinois, nursing homes with higher quality ratings (four or five stars) were marginally less likely to have a case of COVID-19, but in other states, such as New Jersey, higher quality homes were marginally more likely to experience a case.” 

Relationship between Nursing Home Quality and COVID-19 Cases and Deaths

Ownership Structure Not a Factor

Lastly, Konetzka’s study looked for meaningful differences based on for-profit or not-for-profit status.  The findings indicated that there was the same probability – 36% – of a for-profit nursing home and a not-for-profit nursing home having a COVID-19 case in their respective community. 

The bottom line is that standard quality measures alone are not enough to distinguish which nursing homes have higher propensity for COVID-19 cases and deaths. Instead, early research indicates that factors such as location, which can reflect community vulnerabilities, facility size, and access to testing and personal protective equipment are more likely to have an impact.

The enormity of this pandemic, coupled with the intrinsic susceptibility of the nursing home setting and population, means that even the highest-quality nursing homes are not impervious to the virus. 

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The NIC MAP^® Data Service recently released national monthly data through March 2020 for actual rates and leasing velocity. In this release, NIC also provided data on three metropolitan areas for which there is sufficient data to report upon: Atlanta, Philadelphia, and Phoenix.

A few of the key takeaways from the 1Q2020 Seniors Housing Actual Rates Segment Report at the national aggregated level are listed below. Full access to the reports and other takeaways is available to NIC MAP Data Service clients.

Key Takeaways

• Average initial rates for residents moving into independent living, assisted living and memory care segments were below average asking rates, with monthly spreads generally largest for memory care, followed by assisted living segments and then independent living segments. Care segments refers to the levels of care provided to a resident living in an assisted living, memory care, or independent living unit. 
  • • The average discount for the memory care segment was the largest of the three care segments in March 2020 and averaged 10.7% below average asking rates. This equates to an average initial rate discount of 1.3 months on an annualized basis, less than the 1.5 months seen at the end of 2019.
    • As of March 2020, initial rates for assisted living care units averaged 7.6% ($386) below average asking rates. This equates to an average initial rate discount of 0.9 month on an annualized basis, the same as the year-earlier and the year-end 2019 discount.
• Average in-place rates for residents in independent living, assisted living, and memory care segments were below average asking rates. The discount was smaller for in-place rates than initial rates compared with asking rates. 
  • • For the assisted living segment, average in-place rates consistently were below average asking rates since reporting began in January 2017. The monthly gap between these rates was 2.3% or $117 in March 2020, the equivalent of 0.3 months. It has averaged 0.4 months over the past 12 months. 
• The rate of move-ins has exceeded or equaled the rate of move-outs for 8 of the prior 12 months for the memory care segment, 5 of the latest 12 months for assisted living segment and 7 of the past 12 months for independent living segments as of March 2020.

The NIC Actual Rates initiative is driven by the need to continually increase transparency in the seniors housing sector and achieve greater parity to data that is available in other real estate asset types. Now more than ever, in the world of the COVID-19 pandemic, having access to accurate data on the actual monthly rates that a seniors housing resident pays as compared to property level asking rates helps NIC achieve this goal. That said, the data reported in this blog post does not reflect the effects of the pandemic, but better serves as a baseline for the conditions that prevailed prior to the coronavirus. 

The Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,500 properties across the U.S. operated by 25 to 30 seniors housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

The data reported here is on care segment, where 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, or memory care. NIC also has this data for majority property type, where majority property type refers to which care segment comprises the largest share of inventory. In addition, care segment actual rates data is also available for the Atlanta, Phoenix and Philadelphia metropolitan areas. 

While these trends are certainly interesting aggregated across the states, actual rate data is even more useful at the metro level. As NIC continues to work towards growing the sample size to be large enough to release more data at the CBSA level, partnering with leading software providers like Alis, MatrixCare PointClickCare, and Yardi makes it easier for operators to contribute data to the Actual Rates initiative. NIC appreciates our partnerships with software providers and our data contributors and their work in achieving standardized data reporting.

If you are an operator or a software provider interested in how you can contribute to the Actual Rates initiative, please visit nic.org/actual-rates.

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Pandemic underscores impact of social determinants of health

Before the pandemic hit three months ago, one of the hottest industry topics was the social determinants of health. Recognition has been growing over the last several years that a huge amount of healthcare costs is driven by people’s lives outside of the doctor’s office. Factors such as food insecurity, isolation, and lack of access to services are just a few of the social elements that contribute to healthcare outcomes. A frail elder without social support is unlikely to manage the intricacies of a complex healthcare system.

The pandemic has drawn even more attention to the link between health and life circumstances. Communities that face social challenges, particularly those of color and the frail elderly, have been hit hard by the disease.

“People’s needs are spiking,” said Michael Monson, senior vice president of Medicaid and complex care at Centene, a St. Louis-based insurer and the nation’s largest Medicaid managed care organization.

While living conditions are widely recognized as a health factor, a big question for seniors housing operators has been how to pay for support services that impact health. Should health systems, or insurers, pay seniors housing operators to track the health habits of their residents and provide interventions?

“We do not have sustainable flows of funds from the healthcare sector to seniors housing,” said Monson.

Piece-meal solutions are slowly emerging. Some Medicare Advantage plans are starting to offer benefits that address the social determinants of health, such as meals and exercise plans. Pilot programs test new approaches but are not widely available.

Because of its impact on vulnerable groups such as seniors, the pandemic could accelerate the push for more social services, experts say. But collaboration will be key to success.

How to link healthcare and housing

In 2019, Centene launched a new subsidiary called Social Health Bridge. Monson is the CEO. Social Health Bridge acts as a financial and interventional layer between the healthcare sector and community organizations, including housing providers. The goal is to improve health outcomes and lower healthcare costs by providing social supports and access to critical services for residents.

Social Health Bridge offers a market-based solution for seniors housing operators, explained Monson. “This is a way to create a regular funding stream to pay for certain services.”

Here’s how it works. Residents sign up to join the Social Health Bridge Network. It includes local health systems, hospitals and physician groups in value-based arrangements that tie compensation to certain performance measures. Residents can have any kind of insurance, whether a Medicare Advantage plan, Medicaid, or a private plan.

The Network pays for a resident service coordinator on-site at the building. The service coordinator links residents to needed services and interventions on behalf of the healthcare providers. Typical services include case management, transportation, and other social supports. A long-term program goal is to place doctors and nurse practitioners on-site with office hours to fill care gaps.

The idea harkens back to the 1960s when HUD-financed senior apartments introduced service coordinators on-site. Centene beefed up that model and introduced standardized protocols, policies, technology systems and oversight. “We give them the tools they need to improve quality health scores while lowering healthcare costs,” said Monson.

Lower healthcare costs result in savings which fund the program. “Seniors housing pays us nothing,” said Monson, adding that many assisted and independent living properties don’t have the budget for an on-site service coordinator. It’s important to note that the seniors housing operators bear no insurance risk, he added, in contrast to programs where the housing operator forms its own Medicare Advantage plan.

The program is suited for independent and assisted living communities, not skilled nursing facilities.

The business model works best with a large risk pool of participants, probably 10,000 individuals or more, said Monson.  To reach that scale, Centene seeks markets where it already has a strong customer base.

Last January, Centene launched its first community partnership in New Orleans with an affordable housing provider. The first step is to assess residents and find them access to care, though Monson said the pandemic has slowed the process. An agreement with a seniors housing community is in the works.

“We are in early days,” said Monson, commenting on the roll-out of Centene’s program. “But this is an option to bring together the seniors housing provider and health system network.”

The Department of Health and Human Services (HHS) has announced an additional $15 billion distribution, targeted at providers serving Medicaid and CHIP recipients. Included among these recipients are eligible assisted living facilities that serve Medicaid residents. According to the National Center for Assisted Living, 16.5% of assisted living residents rely on Medicaid. Skilled nursing properties serving exclusively Medicaid residents are also eligible. To qualify, providers must not have received a payment from the Provider Relief Fund General Distribution. 

Medicaid providers can use the HHS portal to complete the application process for funding requests. Funding will start at 2% of reported gross revenue for patient care. HHS will use additional information, including number of Medicaid residents served, to ultimately determine the final payment amount. 

Industry associations continue to advocate to secure an allocation of funds to provide relief to private pay seniors housing operators who have served, and continue to serve, on the frontlines of the COVID-19 pandemic. 

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A NIC report developed to provide timely insights from owners and C-suite operators and executives on the pulse of seniors housing and skilled nursing sectors.

NIC’s weekly 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 where market conditions are rapidly changing—providing both capital providers and capital seekers with data as to how COVID-19 is impacting the space, helping leaders make informed decisions. 

This Wave 8 survey sample includes responses collected May 25-June 7, 2020 from owners and executives of 150 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.

Join other operators in the sector and participate in the next wave.

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In an effort to balance the time commitment of operators responding to our surveys while simultaneously continuing to provide transparency through the delivery of timely and informative data during the COVID-19 pandemic, NIC is separating the existing Executive Survey Insights into two alternating surveys:

• Executive Survey Insights: Market Fundamentals – Researches the impact of COVID-19 on occupancy rates, move-in and move-out rates, development pipelines, staffing, and supports for frontline community employees and staff.
• Executive Survey Insights: COVID-19 – Provides insights into how COVID-19 penetration differs across care segments from both a cumulative and in-place perspective.

Surveys will be distributed on a staggered, every other week basis and the analysis of the survey responses will be made public on our website in the NIC Notes blog. Responses from both surveys will continue to be shared with survey participants in advance of public release. Additionally, the historical Executive Survey Insights can be accessed on the NIC COVID-19 Resource Center.

Wave 8 Summary of Insights and Findings

The pace of move-ins and move-outs improved across all segments, resulting in a smaller share of organizations reporting month-over-month and week-over-week declines in occupancy than in prior waves of the survey. Of those with bans on move-ins, either self-imposed or government-imposed, two of every three organizations anticipate lifting restrictions on move-ins within one month, while approximately one in four specified no time frame.

• While most organizations continue to report a deceleration in move-ins in the past 30-days, in Wave 8 of the survey, the shares of organizations reporting deceleration is the lowest—across each of the care segments—since the first two waves of the survey (data collected March 24-31 and April 1-12). Furthermore, the shares of organizations reporting an acceleration in move-ins was the most of any wave to date.
• Reasons cited for a deceleration in move-ins continue primarily to be slow leads conversions/sales resulting in difficulty replacing residents who have passed away or moved out. However, about 15% fewer organizations cite an organization-imposed ban on move-ins in Wave 8 compared to Wave 5, as all states have begun to loosen social and economic restrictions. About one-half of respondents continue to cite resident or family member concerns about moving in. Others continue to note fewer hospital referrals or elective surgeries that bring in residents for rehabilitation and therapy.
• Fewer organizations saw a month-over-month decrease in occupancy compared to earlier survey waves. Additionally, the shares of organizations reporting an increase in occupancy from the prior month increased to the highest since the first two waves of the survey (between 14% and 25% in Wave 8). Respondents with independent living, assisted living, and memory care segment units report slightly higher shares of stable or improving occupancy rates from a week ago.
• Approximately one in four organizations indicated that both access to PPE and access to COVID-19 testing kits has improved considerably, while 58% indicated it has improved somewhat for PPE and 47% for test kits. Roughly one in four organizations report that it is still difficult to obtain enough testing kits.

Wave 8 Summary Demographics

• Responses were collected May 25-June 7, 2020 from owners and executives of 150 seniors housing and skilled nursing operators from across the nation.
• Two-thirds of respondents were exclusively for-profit providers (66%), about one-quarter (27%) were exclusively nonprofit providers, and 7% operate both for-profit and nonprofit seniors housing and care organizations.
• Owner/operators with 1 to 10 properties comprise 53% of the sample. Operators with 11 to 25 properties make up 25% while operators with 26 properties or more make up 22% of the sample.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 81% of the organizations operate seniors housing properties (IL, AL, MC), 34% operate nursing care properties, and 28% 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…”

• The shares of organizations reporting a deceleration in move-ins in the past 30-days is the lowest, across each of the care segments, since the first two waves of the survey (data collected March 24-31 and April 1-12), while the share of organizations reporting an acceleration is the highest.
• In Wave 8 of the survey, between 39% to 46% of organizations reporting on their independent living, assisted living and memory care segments, and 64% of organizations with nursing care beds indicated that the pace of move-ins decelerated in the past 30-days—a continuing trend in improvement.
• Additionally, approximately 20% of organizations with independent living, assisted living, and memory care segments and about one-quarter of organizations with nursing care beds saw an acceleration in move-ins in the past 30-days.

Reasons for Deceleration in Move-Ins

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

• Significantly fewer respondents in recent surveys cited an organization-imposed ban on settling new residents into their communities than in earlier waves (45% in Wave 8 versus 59% in Wave 5).
• In Wave 8 of the survey—in similar proportions to the prior three waves—roughly two-thirds of respondents attribute a deceleration in move-ins to a slowdown in leads conversions/sales. Around one-half of organizations cite resident or family member concerns, and about one-quarter cite a mandatory government-imposed ban. Others cite fewer hospital referrals and elective surgeries that bring residents in for rehabilitation and therapy.

When Organizations Will Lift Restrictions on Move-Ins

Respondents that reported having an organization-wide ban or mandatory government-imposed ban were asked: “My organization anticipates lifting restrictions on settling new residents into some or all of our communities…”

• In Wave 8, two of every three organizations anticipate lifting restrictions on move-ins within one month, while approximately one in four specified no timeframe.

Move-Outs

• Between 63% and 68% of organizations reporting on their independent living, assisted living, and memory care units in Wave 8 saw no change in move-outs in the past 30-days, similar to Wave 7, while approximated 20% reported decelerations.

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)”

• Approximately one-half of organizations reporting on their independent living, assisted living, and memory care units in Wave 8 of the survey—across their respective portfolios of properties—experienced a decrease in occupancy from the prior month, while roughly one-third report no change (32% to 37%).
• Notably, one in four organizations with nursing care beds reported an increase in occupancy from the prior month, and 14%-15% of organizations with independent living, assisted living units or memory care units report an increase in occupancy in the past month. This was the highest since earlier waves of the survey.

• The chart below breaks out the rates of change in occupancy by care segment with greater granularity, comparing the current timeframe (Wave 8 data collected between May 25 to June 7), to the prior survey (Wave 7 data collected between May 11 and May 24), and earlier in the pandemic at the start of this survey when the majority of independent living, assisted living and memory care segments had yet to report major changes in current occupancy compared to one month prior (Wave 1 data collected between March 24 and March 31).
• As shown in the chart, near the beginning of the pandemic (Wave 1), the share of operators that reported month-over-month occupancy rate declines increased as the pandemic progressed. More recently in Wave 8, the share reporting downward changes in occupancy has declined for all segments but independent living. The majority of those reporting occupancy declines in independent living reported declines between 0.1% and 3.0%.

• Regarding the change in occupancy from one week ago, respondents with independent living units consistently report the fewest declines in occupancy from one week earlier while assisted living and memory care saw fewer organizations reporting declines (27%, respectively) than in prior surveys.

• Most organizations with independent living, assisted living and memory care segment units note no change (57% to 70%); however, slightly higher shares of organizations with independent living and memory care segment units report an increase in occupancy from one week ago. Organizations reporting on nursing care beds reported the highest share of higher occupancy rates from the prior week (17%), the same as in Wave 7.

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…”

• Approximately one in four organizations responding to this inquiry indicated that both access to PPE and access to COVID-19 testing kits has improved considerably, while 58% indicated it has improved somewhat for PPE and 47% for test kits. Roughly one in four organizations report that it is still difficult to obtain enough test kits.

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 rapidly changing. NIC also thanks both ASHA and Argentum for their support in encouraging participation in the Executive Survey Insights: COVID-19 survey. The results of our joint efforts to provide timely and informative data to the market in this challenging time have been significant and noteworthy.

The Executive Survey Insights: COVID-19 survey is now open. To respond to the survey, please click here.

If you are an owner or C-suite executive of seniors housing and care properties and have not received an email invitation but would like to participate in the current Executive Survey, please send a message to insight@nic.org to be added to the email distribution list.

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