Many factors are at work slowing the recovery of long-term care according to panelists in Wednesday’s Leadership Huddle from the National Investment Center for Seniors Housing & Care.
NIC Chief Economist Beth Mace moderated the first huddle of the year, titled “Senior Housing and Skilled Nursing: The State of the Market.”
Attendee Brian Beckwith, CEO of Arcus Healthcare Partners, said he was surprised that the recovery of housing and care for the elderly was not further advanced. He noted, however, that the effects of the omicron variant were significant.
“In December and January, each of the operators, qualified or assisted, was understaffed. It was mostly because people were out for COVID,” he said. “I think that had a pretty big impact on the stalled recovery that we were feeling, especially in January for skilled nursing, which is normally a month of strong occupation growth.”
Construction costs are high, so new developments have slowed considerably, Beckwith said.
“The Assisted Living world is going to have a bit of a better story on the supply side, because I think development has slowed down and will probably continue to be in a relatively benign new world of growth for some time. time, considering construction costs,” he said.
Mace noted that construction sites have come to a halt and construction lending has stalled or slowed “significantly” during COVID. “That is now translating into lower inventory,” she said. “Still positive growth, but slower than it otherwise would have been.”
In Beckwith’s view, given occupancy issues, the high cost of personal protective equipment, and rising labor costs, the skilled nursing industry would have collapsed without federal funding. and state during the pandemic. Many of those dollars have dried up, but occupancy and labor costs are still tough on operators, he said.
“It’s getting a little more stressful,” he said, adding that he doesn’t see more federal funding coming into the system.
Beckwith said he thought it would be wise for the federal government to extend the public health emergency that was set to expire on July 15. A 90-day extension, he said, would help the states’ Medicaid assistance program and keep the three-day stay in place. The extension would help skilled nursing facilities without additional funding.
Craig D. Hanson, CEO of Omega Senior Living, said he would like to see the government work with operators to draft legislation, “rather than pass something and have to backtrack. Take a step back and really ask the opinion of the operators and those who are out there who are really trying to operate within those regulations.
“Many punitive measures” stem from legislation rather than a favorable environment for operators, he said.
“They think they’re going to get better performance by penalizing [operators]”, said Hanson. “Obviously there have to be consequences, but I would prefer to see a focus on ‘Hey, how can we help operators?’” The next huddle will be May 22 at 1 p.m. ET. registration is compulsory.