As senior housing looks forward to the coming year, there is much to be optimistic about. Occupancy rates remain high, in an industry that is increasingly looked upon favorably by seniors and their adult children.
Working from this solid base, the senior housing business will see a number of significant changes in the coming year and likely will be adapting its business models to better perform in this changing landscape.
The success of the senior housing business sector in recent years has attracted a range of new investors and new operators. The influx of capital is driving a surge in the number of facilities: Roughly one million Americans live in senior care facilities and this number will nearly double by 2030. Continued growth will mean increased competition for existing providers, who will be challenged to find more efficient and effective ways to deliver product.
Focus on staffing.
The senior housing industry has a notoriously high rate of staff turnover. This is an expensive proposition, since recruiting, hiring and training are costly ventures. At the same time, inadequate or ill-supported staff can lead to resident dissatisfaction. The most recent numbers indicate the median annual resident turnover across all assisted living residences stands at nearly 50 percent. That churn rate is likely to continue in the coming year, especially among employees, who may find increasing opportunities in a steadily improving economy. In 2016 operators will be looking to combat staff turnover through careful hires, thorough training, and the implementation of new technologies, such as sophisticated scheduling tools — technologies that aim to make the workday more efficient and enjoyable.
In recent years the senior housing business has begun to see the formation of specialized communities aimed at seniors who share particular interests such as art or theater, or who may have a common ethnic background. These communities mirror a growing interest among seniors to live amongst those with whom they feel most comfortable. This push for familiarity will likely pick up pace in the coming year, as more niche communities come online and operators become more adept not only at marketing such properties, but also at providing specialized services for any given population.
Technology continues to dominate the consumer landscape, and its effects are being felt in the senior housing arena. Historically a slow adopter, senior housing is ramping up this time around, with industry executives exploring a range of tools that may help to enhance their operations. Some are looking at wellness technologies such as passive falls monitoring driven by artificial intelligence. Others are investing in communications portals designed to keep caregivers, residents and families all interconnected. Some are stepping back to consider the big picture: They are hiring savvy consultants to design and implement IT infrastructures that will endure over time, even as the particulars of technology may change.
In 2016 senior housing will find itself challenged to meet the continually rising expectations of a new generation of seniors. Tomorrow’s residents will expect to maintain a high quality of life in senior housing and operators will need to do their utmost to ensure that high level of performance. In a poll of seniors, 91 percent said comfort and ambiance of resident apartments was important, 85 percent said the quality of food was a priority and 93 percent said cleanliness was an indicator of how the staff might treat them. What does all this mean? In short, senior housing executives will need to examine every facet of their operations from dining to staffing to technology investments, in order to ensure rising expectations are consistently met.
Driven by dramatic changes in the nation’s healthcare system, the coming year also will see the rise of the value-based service model, the notion that medical care should be judged on the quality of service provided. Value-based medicine rewards those who produce clear outcomes, delivering proven treatments and effective medicine to patients who make informed choices. The Department of Health and Human Services wants to see 30 percent of Medicare payments tied to quality or value based medicine by the end of 2016 and 50 percent by the end of 2018. This is an opportunity for senior housing to stand out. By continuing its focus on quality of care, senior housing has a chance to become a provider of choice within the changing healthcare landscape.
The coming year promises to be a busy one for senior housing executives – a year fraught with changes, but also with opportunity.