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One Year Later: Senior Living CEOs Reflect on the Pandemic, When Recovery Will Take Hold

“If we could have gotten out of December, we would have been largely unscathed.”

Those are the words of The Springs Living Founder and CEO Fee Stubblefield, and they reflect what he said was the roughest month for the provider in the nearly 14-month fight against the coronavirus pandemic.

December was the peak of the pandemic’s third wave. Positive Covid-19 cases and deaths far exceeded April numbers during the first wave’s peak, driven by the arrival of colder weather and holiday travel. And while providers knew more about the coronavirus’ transmission than they did nine months earlier, and health experts warned for months that a winter wave of cases would be brutal, the sheer number of cases threatened to overwhelm an industry that worked under high alert throughout that time.

Before December, The Springs Living, which is based in McMinnville, Oregon and operates 18 communities in Montana and Oregon, had ably managed through the pandemic after the initial wave. But the third wave threatened to overwhelm staff bandwidth to keep residents and each other safe. Adding insult to injury, vaccine clinics, which would begin to provide a measure of relief, did not start until January 4.

“December was just brutal,” Stubblefield told Senior Housing News.

To learn more about how senior living executives reflected on one of the most challenging periods of their professional careers, SHN connected with a handful of industry leaders.

These provider CEOs had different pandemic experiences, in terms of when Covid-19 hit their organizations the hardest and in what strengths and weaknesses the pandemic revealed. But nearly all of our respondents expressed hope that a return to pre-pandemic levels for occupancy and net operating income (NOI) will be swift — at least for them.

Toughest times varied

For many operators, the early weeks of the pandemic were the toughest.

For Bloomfield, New Jersey-based Juniper Communities, that specifically was mid-March through late April. This was because so little was still known about how the novel coronavirus was spread, and how contagious it truly was once exposure occurred, Founder and CEO Lynne Katzmann told SHN.

Other operators agree with Stubblefield’s assessment that December was the toughest month of the pandemic.

HumanGood reported eight-month lows in positive Covid-19 cases on October 31, and was down to single digit cases in staff and resident infections. Along with most of the industry, however, it saw cases surge during the fall wave — even though teams were prepared for the wave and its response before it was strong, CEO John Cochrane told SHN.

The Pleasanton, California-based company ranks sixth on the 2020 list of the top 200 nonprofit operators, with a portfolio of 20 CCRCs and affordable communities across the country. The surge in new cases so close to the holidays affected the morale of residents, staff and families alike, even as everyone knew that vaccine clinics would begin immediately after the holidays.

“It was still tough for the team to feel like we’d finally turned a corner,” he said.

December was also Ohio Living’s toughest month of the past year, CEO Larry Guminatold SHN.

Covid-19 severity in Ohio Living and throughout the state was peaking. The operator was challenged operationally with low census, and teams at its campuses struggled to strike a balance between caring for themselves while continuing to lead associates in their pandemic response.

Ohio Living leadership reminded staff to focus on what they can control, which had a positive effect on morale.

“Work on balancing yourselves so you can lead others,” he said.

Other providers indicated that every month brought a unique struggle, and no one month was tougher than another.

Brookdale Senior Living (NYSE: BKD) CEO Cindy Baier indicated that each month brought a new challenge requiring the Brentwood, Tennessee-based owner and operator to adapt and recalibrate its response in accordance with changing CDC and public health department guidance.

“This has been a marathon effort at a sprinter’s pace, with all the challenges that come with a lengthy, sustained vigilance,” she said.

The length and severity of the pandemic presented a consistent challenge for Capital Senior Living (NYSE: CSU), CEO Kim Lody told SHN.

She attributed the experience of the operator’s field leadership in high-acuity care settings with getting a handle on the pandemic, and listed one month in particular as the best period in its response.

“The best month was undoubtedly when resident and employee vaccinations began,” she said.

Shortcomings exposed, positive changes made

Early global hotspots such as Italy, South Korea and China provided little knowledge on how to protect from the virus, and revealed few options for treatment of Covid-19, Katzmann observed.

The uncertainty of the virus led the provider to launch universal testing of all residents and staff on April 1, rather than limiting testing to people showing symptoms, per public health guidance at the time. By April 4, not only did Juniper confirm positive cases in its communities, but that the extent of outbreaks were larger than anticipated. Additionally, Juniper confirmed that people who tested positive but asymptomatic for the virus could spread it to others.

“That information changed the way we handled things,” she said.

Some of what Juniper learned from its early response will remain in place in a post-pandemic environment. The most important lesson: masks and vaccinations work, not only against Covid-19 but for common annual outbreaks such as the flu, which Juniper conquered last winter through their implementation.

“We hate them, but they work,” Katzmann said of masks.

Juniper plans to make vaccinations mandatory in the future, to the degree that it is legally able to do so. Currently, only one state in which the company operates mandates vaccines, but the efficacy of Covid-19 vaccination clinics is expected to bolster Juniper’s push for regular mandatory vaccinations.

The pandemic revealed gaps in communication at Cedar Communities, President and CEO Rich Foster told SHN. The Jericho, New York-based investor owns a portfolio of seven assisted living facilities across the Southeastern U.S.

As more testing became available and more became known about Covid-19, it was much easier for Cedar and its operating partners to put policies and procedures in place to keep residents and staff safe.

Foster credits improved communication lines with this. Cedar leadership were in daily communications with local administrators and received updates on what was happening inside communities. This shifted Cedar’s view of the central office’s role in the owner-operator relationship, from a top-down mandate on operations to providing support for operators. The shift was cemented by rebranding Cedar’s central office as a “corporate solution center.”

“We see this as a true collaboration, creating best in practice health care for our residents,” he said.

Covid-19 also exposed the culture senior living providers had fostered in the preceding years. Providers with strong workforce cultures adapted to the fluid nature of the virus more quickly, while those that struggled with hiring and retention prior to the pandemic found operations and staffing issues exacerbated.

HumanGood realized the culture it long championed withstood the pressures brought by Covid-19, Cochrane told SHN. Staff at communities exhibited agility, perseverance, curiosity, and decisiveness responding to the virus, which bolstered the sense of who they were and what is possible for the organization. Additionally, HumanGood’s California communities contended with a rash of wildfires which further threatened the safety of residents and staff.

Cochrane believes teams’ ability to respond to multiple issues for a sustained period of time will serve as a foundational component for the company’s future growth and management.

“You can fake [culture] for a day. You can fake it for a week. You can’t fake it for 12 months,” he said.

Covid-19 drove home the lesson that operations must be invested in as heavily as buildings — if not more, Stubblefield told SHN. Providers with strong leadership teams in the executive suite and on the front lines every day will drive a resurgence in consumer confidence in senior living and care, and struggling providers that failed to learn lessons from Covid-19 will lag further behind in a post-pandemic environment.

“The market will not look kindly on them,” he said.

Differences on recovery timelines

The efficacy of vaccine clinics is leading to growing confidence that a rebound in occupancy rates and net operating income is on the horizon. But there are differences as to the speed with which occupancy and NOI will return to pre-pandemic levels.

The Springs Living is seeing increases in lead generation, deposits and move-ins, but each remains behind pre-pandemic levels, Stubblefield told SHN.

Even though vaccine clinics are proving effective, questions remain pertaining to consumer confidence in senior housing, along with unknown factors such as whether another surge in cases is on the horizon, or how effective vaccines are against coronavirus variants rapidly spreading across the country.

But demographic trends are favorable. And, construction starts slowed during the pandemic, easing oversupply pressures. Covid-19 also compelled the industry to evaluate its business model and to continue to focus on the needs of the residents and their families.

“I think that this approach on our business and customers will serve us well,” Brookdale’s Baier told SHN.

She hesitated to predict when the operator would see a rebound in occupancy, but noted that occupancy declines have moderated after the most recent surge.

Stubblefield also believes that The Springs Living is heading in the right direction. Barring any unforeseen complications or surges in cases, he expects occupancy improvements to gather momentum by late Q3 2020, at the earliest.

He is bullish on positive demographic trends breaking through pent-up demand, and predicts that, if it does, The Springs could return to pre-pandemic occupancy and NOI levels within 12 months.

“It took us a year to get through this problem. It will probably take us a year to get back,” he said.

Katzmann noted that Juniper is reporting gradual increases in lead generations and move-ins. While she recognizes that the industry will struggle to separate itself from nursing homes as it exits the pandemic, Juniper has always struck a balance between care and hospitality over the past decade.

People moving to senior housing are now older with more chronic conditions, and they are looking to providers to help them manage those things while living their best lives. Katzmann predicts that occupancy and NOI will return to pre-pandemic levels for Juniper within 18 months, but some markets will lag.

Slow and steady is informing Ohio Living’s predictions for a turnaround, as well.

“We’re witnessing a slow and steady census climb, but it’s going to be another 12-18 months before we return [to pre-pandemic levels],” Gumina told SHN.

HumanGood’s Cochrane believes a recovery will widen the gulf between strong and weak operators. The provider is reporting markedly increased web traffic, heightened interest in tours, and an uptick in deposits. There are indications that pent-up demand is beginning to break through, although it is market-by-market.

He predicts a return to pre-pandemic metrics, for HumanGood and other strong providers, by year-end.

“That’s barring another significant wave which, given the experience of the last year, I should knock on wood,” he said.

The post One Year Later: Senior Living CEOs Reflect on the Pandemic, When Recovery Will Take Hold appeared first on Senior Housing News.

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