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Covid-19 Takes Steep Toll On Senior Living Providers in Pandemic Epicenters

Covid-19 presents enormous challenges for senior living providers across the country, but the pandemic is hitting operators in the current epicenters of New York and New Jersey particularly hard.

As of the afternoon of April 20, total Covid-19 cases in New York state were approaching 243,000, while New Jersey’s cases were above 85,300. By comparison, Massachusetts had the third highest number of cases in the country, at about 38,000.

Given these numbers, it is no surprise that regional provider Chelsea Senior Living and New York City-based RiverSpring Health have faced upheaval in every aspect of their operations, including staffing, finances and their interactions with the overall health care system. And they are striving to maintain the highest levels of resident care in the midst of these trying — even traumatizing — circumstances.

“I was just talking to a colleague of mine about how all of us are really being traumatized,” Dan Reingold, President and CEO of RiverSpring Health, told Senior Housing News. “Everybody knows somebody who’s died. Everybody knows somebody who’s very sick.”

Herbert Heflich, CEO of Chelsea Senior Living, also emphasized that senior living providers throughout the region are in similar straits.

“We know in our market, all the other competitors that we’re friends with have had Covid patients and residents,” he told SHN.

Chelsea Senior Living was one of the earliest assisted living providers in the Garden State, opening its first building in the early 1990s. Today, the company operates 18 communities in New Jersey and New York, and 15 currently have residents with a positive Covid-19 diagnosis. Some of these communities have had just one or two cases and others have been hit harder, Heflich said, but getting exact numbers of infected residents and staff is challenging for Chelsea — and RiverSpring — due to a lack of available testing.

RiverSpring, based in the Bronx neighborhood of Riverdale, has been one of the largest senior living and care providers responding to the unfolding crisis in the Big Apple. At its Riverdale campus, RiverSpring cares for about 1,000 older adults across the continuum, including in independent living, assisted living and in the Hebrew Home skilled nursing community. RiverSpring also supports about 17,000 people beyond its campus through a managed long-term care plan.

The effects of Covid-19 on RiverSpring’s operations have been so swift and comprehensive, Reingold reaches for Biblical metaphors to describe the situation.

“The process has been — I was going to say evolutionary in the sense that it evolves, but it’s not. It’s much more revolutionary from when this began to how quickly we needed to step everything up significantly,” he told SHN. “This is all over the span of 40 days. Wasn’t it Noah’s Ark where it rained for 40 days? It’s been 40 days, and it’s going to be continuing.”

Staffing: ‘Everyone’s afraid, but remarkable things have happened’

Keeping residents safe and healthy is the top priority for any senior living provider, but to do so, staffing is a must — and Covid-19 has presented huge hurdles for these providers in New York and New Jersey.

One major issue has been associates who become infected or who are exposed to the coronavirus, meaning they must self-isolate for 14 days. Fear also has driven some people away from the job.

“When the crisis first happened, just anecdotally, about 20% of our workforce at any given community, when they have their first case, sort of disappears,” Chelsea Senior Living President and COO Roger Bernier told SHN. “Staffing has been a crunch for us, but we’re managing.”

RiverSpring also experienced staffing shortages, which were particularly acute in the early days of the crisis.

“When it first hit, there were a lot of fears,” Reingold said. “It reminds me of what happened when AIDS first hit — there [are] a lot of comparisons with the fear of the unknown and, ‘Am I going to catch it?’”

Both RiverSpring and Chelsea Senior Living have taken a variety of steps to address staffing shortfalls, but there is no easy solution.

Bringing in temporary workers has been difficult because agencies also are understaffed, Bernier noted. The good news is that the pipeline of new job applicants has been robust, as other industries were hit with waves of layoffs.

In the first two weeks of the Covid-19 outbreak in New Jersey, Chelsea received about 200 applications. In a normal month, the provider would receive about a quarter of that amount, Bernier said. Because marketing and move-ins have been curtailed, admissions staff transitioned to help manage the hiring process. New Jersey has waived some pre-employment requirements, so Chelsea has been able to expedite the hiring and onboarding process.

Staffing pressures at Chelsea have also been alleviated due to the fact that some workers who contracted Covid-19 in March have recovered and are back on the job. 

RiverSpring also is welcoming back workers who have gone through that cycle. And, workforce pressures that were exacerbated due to school closures now have lessened as associates have been able to find child care support. Late last week, RiverSpring achieved what Reingold considered normal staffing levels for the first time since Covid-19 hit in mid-March.

In terms of supporting and retaining workers, Chelsea implemented a 10% pay increase for all staff members for work time — including hourly and salaried employees. As partners in the management company, Heflich, Bernier and CFO Deena Schaffer have contributed from their own pockets to create a fund so that workers in crisis can get a check.

Beyond monetary incentives, it’s critical for staff to have necessary protection and information. Chelsea has sufficient personal protective equipment (PPE) and is striving to be transparent in its communication with associates, as well as residents, family members and local and state authorities, Bernier said.

Reingold echoed those sentiments and emphasized the importance of senior leadership being visible and accessible. A senior executive is on the RiverSpring campus for at least part of every shift, around the clock.

“My primary function, as far as I’m concerned, is to make sure that I see every single employee and thank them, and let them know how much I support them and how much we support them as an organization,” Reingold said. “I think it’s important for them to see me on the floors, on all shifts, wearing a mask.”

Leaders with both Chelsea and RiverSpring praised workers for their bravery and commitment, and shared stories of people going above and beyond. For both providers, Covid-19 meant that when some key leaders fell ill, others had to step up to the plate.

“Everyone is afraid, but remarkable things have happened,” Chelsea’s Heflich said. “We had a building — one of our employees was an executive director in training, and her executive director became ill. And all of a sudden, this woman became a superstar.”

As part of the larger effort to support and celebrate the efforts of staff at every level and keep morale up, Chelsea Senior Living last week created a video.

The RiverSpring staff has been “extraordinary,” Reingold said. Several caregivers have multi-year relationships with residents, and they truly have become surrogate family members in this time of isolation, he said. And, the staff have been resilient and “passionate” in their work despite challenges such as the lack of testing.

Reingold, Heflich and Bernier all agreed that more testing is critically needed to more effectively and safely deploy staff based on Covid-19 status. In the meantime, Reingold bristles at the treatment that some nursing homes and senior living communities — and their workers —  have received in the press.

People are acting like we are creating the coronavirus,” he said. “And we’re not getting the gear that hospitals are getting, we’re dealing with staffing people who have their own issues to be concerned about. And we’re being told we can’t test. We’re fighting a war without ammunition or weapons then being blamed for taking casualties. It’s horribly unfair … I think there’s a story to be told here about frontline heroes in long-term care that are taking their lives into their own hands to be sure our residents are getting the care they need.”

Finances: Burning through cash

Operating costs increase as much as 103% for communities that have Covid-19 cases, according to a recent analysis. And at the same time that expenses are rising — due largely to labor and supply costs — providers are suffering from a loss of revenue, given that move-ins are slowing or even stopping and occupancy is falling.

“We’re being squeezed,” Chelsea’s Heflich said.

The company is experiencing occupancy declines of 1% to 2% a month, which translates to around 30 to 40 residents. Every 40 residents lost equates to about $200,000 a month, Heflich said. While there have been a few move-ins over the last month, the company is not counting on any new admissions while the Covid-19 outbreak is ongoing.

“So, you get down to June, it could be equal to $600,000 [to] $800,000 a month,” Heflich said. “That’s a big number for us.”

Meanwhile, the cost of Covid-19 “hero pay” for workers could be $2 million to $3 million on an annualized basis, although Heflich and Bernier do not anticipate that the crisis will extend for 12 months.

To maintain financial stability in the midst of these elevated expenses, Chelsea Senior Living is negotiating for rent relief from its landlord, Toledo, Ohio-based real estate investment trust Welltower (NYSE: WELL). Heflich is hopeful that an agreement will be reached soon.

Welltower declined to comment specifically for this story but pointed to a recent business update that the company released.

“Welltower’s primary focus is on the ongoing support of our operating partners through these unprecedented times,” Chairman and CEO Thomas J. DeRosa stated in that update. “We have made progress on the procurement and distribution of critical supplies, including PPE, and will continue to pursue all available options to further assist our operators throughout this pandemic.”

RiverSpring Health is incurring about $150,000 a week in additional cash expenses, according to a recent “back of the envelope” calculation, Reingold said. These expenses include additional supplies and equipment, overtime costs, bringing in outside cleaning crews and providing additional food to staff.

“We’re burning through a lot [of cash],” Reingold said. “To get any kind of PPE, there’s no accounts receivable, you’ve got to wire cash, it has to be received before anybody is sending any gear.”

There have been some incremental savings as activities have been curtailed. And, RiverSpring has been able to get cash flow relief by taking advantage of advances on Medicare payments, made possible by the Centers for Medicare & Medicaid Services (CMS).

RiverSpring has made sure that all its lines of credit are up to date and has expanded some additional lines of credit to provide cushion against any potential cash crunch. Most providers are taking similar steps to ensure liquidity, Reingold believes.

“We have a great CFO,” he said. “We remind people every day that, while we’ve got to start and end with saving people’s lives and keeping them safe, we’ve also got to make sure that we don’t put ourselves into some kind of really precarious financial situation. People are being very mindful.”

Health system interactions: ‘A needed and welcome realignment’

Covid-19 is changing the relationship between senior living providers and their health system partners. Hospitals pivoted their operations in order to maintain bed capacity for Covid-19 patients, and turned to senior living providers to help in this effort. Senior living communities are strenuously trying to avoid sending residents to the emergency room, and at the same time are limiting visits from third-party health care providers such as home care aides, therapists and primary care physicians.

Fortunately, the hospitals in Chelsea Senior Living’s markets have not been overwhelmed with Covid-19 cases, and with the exception of one or two days when they were diverting patients, can still take people who are experiencing emergencies, Heflich said.

Chelsea is trying to treat as many people in place as possible and has been able to fill in the gaps in care caused by the absence of certain third-party health care partners. Physicians and mental health professionals such as psychiatrists and psychologists have transitioned smoothly to telehealth. The biggest challenge has been on the therapy side, as physical therapy sessions are harder to conduct virtually and exercises are more difficult for residents confined to their rooms, Heflich said.

Chelsea Senior Living is treating some Covid-positive residents, including some who go to the hospital and then return to a community. In these cases, the provider is following all CDC and public health guidelines regarding isolation and the use of PPE.

Heflich and Bernier are glad to provide services, whenever possible, for residents who contract Covid-19 and want to be in their home at a Chelsea Senior Living community, including for end-of-life care; however, the provider is not taking overflow patients from the hospital or presenting itself as a setting specializing in Covid-19 treatment.

“We’re not becoming a Covid health care setting,” Bernier said. “We’re not capable of doing that or comfortable doing that at this point.”

Given its skilled nursing expertise and facilities, RiverSpring made a different decision, and created two Covid-19 recovery units specifically to help handle the surge from its acute care partner, New York Presbyterian Hospital.

“I just remember thinking to myself, this is absolutely the right thing to do,” Reingold said. “The people that are surviving intubation and ventilators, or just surviving the hospital stay, are coming out very weak and compromised, and this is what we do. We need to set up a post-acute unit that is specific for Covid-positive [patients], and we did it.”

The logistics were “grueling” and involved switching a long-term care and post-acute floor over to this purpose. The floor had to be cleaned and equipped, and RiverSpring had to procure a two-week supply of PPE — full protective gear, not just masks — before opening. Every department from IT to dining was involved, and Reingold himself helped make up the beds before the first wave of patients arrived.

Now, RiverSpring is operating two Covid-19 units totaling between 80 and 90 beds.

Reingold has not heard of any concerns from residents of RiverSpring’s independent living or assisted living buildings about these Covid units being established on the campus.

“A couple of family members have expressed concern, but not the residents,” he said. “One of things that I found so inspiring is the number of residents who say to me, Mr. Reingold, we’ve been through a lot. We’ve been through the Depression. We’ve been through World War II, and some of us went through the Holocaust. We’ve been through 9/11 … We’re resilient. We’ll get through this.”

Looking ahead, Reingold anticipates a surge in demand for post-acute and long-term services as hospital discharges pick up. And, while he is not sure exactly what form it will take, he believes that the relationship between senior housing and care providers and the acute-care system will change due to the collaborations required during Covid-19.

“I think there’s going to be a needed and welcome realignment in health care,” he said.

Reingold is also optimistic that consumers will come to see senior housing communities more positively as a result of the pandemic, and that this will drive demand for communal living.

“I think one of the most interesting features about this is how America as a country will understand what it means to be isolated and to feel socially disconnected, which is what many older adults feel every day,” he said. “I hope that this creates much greater empathy and compassion for the need for social connection among older adults.”

Heflich, Bernier and Reingold are not sure how long it will take to turn the Covid-19 tide in their markets but are digging in for an extended period of challenge and uncertainty.

“We’re not at the beginning of the end, we’re at the end of the beginning,” Reingold said.

The post Covid-19 Takes Steep Toll On Senior Living Providers in Pandemic Epicenters appeared first on Senior Housing News.

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