4 Ways COVID-19 is Influencing the Senior Living Industry
The consensus in the senior care industry is that the business will not return to its pre-COVID ways. Senior living leaders have started to identify and explain some of the large-scale and lasting changes that the pandemic will likely cause, including the four below.
1) Health care delivery will never be the same
As the pandemic has unfolded, some senior living CEOs have argued that COVID-19 has proved that senior living communities must be considered health care settings instead of hospitality facilities.
This is because the pandemic has highlighted the vulnerable health status of older adults, and because senior housing communities have played a vital role in the larger care continuum.
The pandemic has strengthened ties between senior living providers and the health systems in their markets so much so that, even after COVID-19 wanes, the two will remain closely integrated. Thus, there will be more health care delivered via senior living providers
Prior to the pandemic, senior living providers were already pursuing strategies of scaling up and diversifying into new services, such as home care or hospice. These organizations are looking to play a larger role in the health care ecosystems of their local markets where they have been established for multiple generations.
2) Federal oversight and regulation
The pandemic could be a tipping point toward greater oversight and regulation of the industry from Washington, D.C.
This is primarily due to the persistent and ultimately successful case that the industry has made to gain access to federal relief funds. In making the case for federal dollars, the industry has showcased the ways in which communities — particularly on the higher-acuity end of the continuum — are in fact health care settings. Provider CEOs and other industry leaders have also made the point that other private-sector industries, such as airlines and hotels, have received much larger relief packages. However, putting the genie back in the bottle might be impossible once lawmakers and regulators come to understand assisted living as part of the health care continuum. With more federal money comes more oversight.
3) Providers will become more transparent
Increased federal oversight would require providers to publicly report more data about their operations and resident health outcomes. However, there are also business imperatives, like being attractive to clients and being competitive in the marketplace, that will most certainly create a more transparent industry in the future.
Some executives believe that their companies must provide clear, robust information about how COVID -19 is affecting each community within their portfolio as part of an effort to maintain consumer trust and confidence. While many providers have emphasized the need for quick and candid communication about COVID-19 infection rates with residents, family members, and staff, some are also posting this information on their company’s website for the public.
4) A more consolidated, sophisticated industry
Leaders with PGIM Real Estate — one of the largest private equity investors in senior housing — made a prediction in June. They said that the pandemic would widen the gap between winners and losers within senior living operating businesses. Those operators with a strong culture and the sophistication to handle the increasingly complex demands of senior living have a brighter long-term outlook. Weaker operators, on the other hand, will struggle, and many will not survive. This “weeding out” of those weaker businesses will result in a more advanced industry.