Despite all of the senior living industry’s hard-earned progress, there may be worse days ahead in the fight against the coronavirus pandemic, according to Randy Richardson, president of senior living provider Vi.
For Richardson — who stresses he is an optimist — it is disconcerting to see Covid-19 infection totals rise again in cities and states across the country. Specifically, he is disappointed that so many people seem to be shirking their social responsibilities, such as social distancing and wearing a mask in public spaces.
“I worry about that, because I think that’s what will potentially contribute to a series of spikes or outbreaks in different markets, like we’re seeing in Florida and Arizona,” Richardson said during an appearance on the Senior Housing News podcast Transform. “We’re on it … but I do worry a little bit about the fatigue that has set in, and about trying to get into a new normal routine.”
And there are already signs that the industry could see a return to some of the woes it faced during the early days of the coronavirus pandemic, such as shortages in personal protective equipment (PPE) or testing kits.
Still, although the pandemic has tested operations at Vi’s 10 high-end CCRCs, the company was able to radically alter its operations, sales and marketing in order to mitigate the disease’s impact. Vi’s occupancy has only dropped about 1% since the pandemic began, and now sits at about 96%. And while expenses have put pressure on operating budgets, the company has found some ways to mitigate those pressures.
Highlights of Richardson’s podcast interview are below, edited for length and clarity. Subscribe to Transform via Apple Podcasts, SoundCloud or Google Play.
On dealing with Covid-19:
We have struggled to work through this pandemic, with really no template. We’ve been kind of making it up as we go.
Back in early February, I began to understand or see the potential of this problem. And we had an early meeting with our executive team — February 6, to be exact — where we said, you know, we really need to pull out our infectious disease protocols, and try to understand what we need to do to modify them to deal with this. And we had some very robust protocols in place to deal with things like norovirus and gastrointestinal infections in a community, but Covid-19 is much different.
So, we began to understand pretty quickly that we needed personal protective equipment. We felt like we were maybe a couple weeks ahead of the game in getting everybody trained on the fundamental things like handwashing, sanitization, how to deal with common spaces and so forth. We also went into high-gear on PPE procurement, and we still are today.
Today, our resident infection rate across the whole system is below 1%. We’ve had, in many communities, no outbreaks at all for several weeks. We, like everybody else, struggle with employee infections because they’re in and out of the communities every day dealing with normal life activities, and they get exposed to a lot of people.
All in all, I’m really pleased with where we are today. And I’ll knock on wood here, because I don’t think this is over. In fact, I think there’s even worse to come, and I’m an optimist. But I really do think that we’re going to have to deal with this for a while.
There’s been a lot of change. And as a result, a different kind of fatigue sets in from time to time. We’re spending a lot of time and attention on employee morale, and on keeping our residents engaged. And that’s been very, very helpful and important to keep spirits up, and to keep doing what we need to do on a day-in and day-out basis.
The things that concern me now are keeping our staff healthy, because if they’re healthy, they’ll be able to keep our residents healthy. And I see a kind of cavalier response among the general population to this pandemic, in terms of wearing masks or social distancing. It’s very disappointing to me, and I worry about that, because I think that’s what will contribute potentially to a series of spikes or outbreaks in different markets, like we’re seeing in Florida and Arizona right now — markets that three or four months ago really weren’t [having] this experience and people weren’t that concerned.
We just try to stay ahead of it and have regular communication with our personnel, with all of our leadership team, and listen to them. We’re on it — our whole focus has been in this area — but I do worry a little bit about the fatigue that has set in, and about trying to get into a new normal routine.
On Vi’s planned return to rental communities:
We have a couple of projects that are alive and well, but delayed, because we simply can’t execute at this point in time — [we’re] without travel and interpersonal interaction with vendors, planners, architects, all the people that you have to work with to make a project come together. So, it’s delayed, but we haven’t turned the switch off. We’ve tried to keep it warm and get our sales teed up so that, as things emerge, we can move things along.
Having said that, we have [well in excess of] $50 million worth of internal redevelopment within our portfolio that we are working on right now. And that hasn’t stopped. We have continued to push forward on all of those plans. We’re not into construction on some of those big projects until we get to a better place, but where we can move those projects forward, we are. It’s been a little more challenging because of travel, and other things related to executing on those plans.
So, that’s creating some delay, but it hasn’t changed our position. I’m very bullish on our prospects coming out of this. My message to our people is that we do a great job on a normal day. We need to do an exceptional job during this period of time, and our reputation will carry through. We’ll be just fine as we emerge from this, but we have to be determined and a little bit gritty right now.
On reopening common spaces and amenities:
We have a phased reopening plan for each community. And it really is driven by the larger community, either the municipality or county guidelines that have been issued. We have a tracking report that we’ve developed and distributed twice a week that shows where everybody is at in their phasing with reopening. As an example, I’m looking at the report right now. And in Aventura, Florida, we’re in phase 1 of out of 0 through 4.
Zero is complete stay-at-home, shelter in place and limit your outside activities. Phase 1 opens up after a certain period of no new cases. It’s opening the swimming pool, limited attendance in the workout facility or the health club, and we delivered three meals a day to all of our residents, which is what we have done since March 15. And then as you move into phase 2, you will open up limited areas of the common space, but with social distancing.
But we are in the very early stages. [As of July 22] we have three communities in phase 1, we have one community in phase 2, and everybody else is in phase 0, but preparing to move to the next phase. We’ll continue to test and monitor as we move into each phase. And, if we see a spike in new cases, then we’ll retreat and go back to where we were.
How Vi adapted its sales and marketing for the Covid-19 era:
Our primary method of marketing is personal interaction and group presentation, which we had to shut down. We have not allowed visitation until we’ve opened up into a different phase in some communities.
So, Covid-19 has completely changed it. Having said that, our salespeople have maintained contact with all our prospects. We’ve actually moved in a number of people during the pandemic under very strict protocols to limit the exposure to the common spaces. We’ve developed a complete virtual sales program, which we launched in July to augment the personal efforts of our sales staff in each community, and to maintain contact with our prospects. The response has been very, very good.
We’re not going to have the move-ins that we anticipated this year as a result of the pandemic. We have felt a little bit of occupancy change, but only about 1% so far. We’re operating across our portfolio at about 96% occupancy today — incredibly good results. And with the launch of the virtual campaign that we put out there now, our sales staff are very excited.
Fortunately, the housing market seems to have held up very well through all of this. If people can’t sell their home, then they’re less likely to move into a community like ours. In fact, if anything, there’s probably an uptick in demand in residential housing now, which is a good thing for us.
On whether Covid-19 is changing the value proposition of senior living:
When people need to be staying at home and limiting social interaction, it really flies against what we sell. I mean, they moved into our communities because they’re beautiful places, and that’s part of what they buy into. There’s no question that what we’ve had with the isolation, and the controls that we’ve had to put in place to mitigate the spread of infection, have diminished the value of those common spaces and those activities that residents counted on when they moved in.
Having said that, they understand that we can’t control it. We’re all as a society dealing with this. It’s not our fault. And they understand that. Residents’ spirits have been very, very high. They’ve been very appreciative of how we’ve cared for them. And, as we emerge from this, I frankly believe that’ll be a selling point. If you demonstrate that you actually care for people … ultimately, I think that will help us win, because that speaks to our reputation, and we’ll be able to sell off of that. So, I’m very bullish on the model and what we have to offer. And I think it is, in fact, the future of senior living, period.
On how Covid-19 is affecting the bottom line
We won’t hit our numbers this year, and dealing with the pandemic and the additional operating expenses has put some pressure on our operating budget. We’ve done other things to mitigate those. But it’s unclear right now what the bottom line will be. As you can imagine, we’ve spent a lot of money on PPE, and we’ve spent a lot of money on food service and so forth. Not necessarily food product, but delivering three meals a day to people in their homes, and then also just the packaging, has been an additional expense.
There is still a lot to sort out. But our approach has been, first, we want everybody safe. We want our residents safe, we want our employees safe. We want them cared for, and we’ll do everything we can to mitigate the conditions of isolation during this time for our residents.
There are different ways we’re spending money. And there are different ways we’re saving money. It’s unclear to me at this very moment where we’re going to actually fall out. In a few more months, we’ll have a better sense of this. But clearly, we’ve spent money where we’ve had to, because we need to keep people safe.
This interview was edited for length and clarity.
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