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Emerging from pandemic, senior care facilities face a host of challenges

The senior living and care industry embraces a broad range of facility types, missions and ownership structures, and the economic reality is different for all of those, experts say. (Depositphotos)

Steve Coetzee doesn’t know what the future holds for the senior community he runs in Boonsboro.

The Fahrney Keedy community has felt the effects of the coronavirus pandemic. In 2020, the pandemic cost the community $2.5 million, due in part to hazard pay given to all employees and the nearly $500,000 paid for coronavirus testing.

A COVID-19 outbreak in December — where 85 residents of its skilled nursing facility and 150 staff members tested positive for the virus — “decimated” the standalone facility, says Coetzee, president and CEO of Fahrney Keedy. And even though the coronavirus vaccines have helped these past several months, the facility’s future is clouded in uncertainty.

Without increases in Medicare and Medicaid reimbursement rates, the future of the community is in doubt, Coetzee said.

“We literally survive on Medicare and Medicaid funding,” Coetzee said. “We don’t have a corporate entity to kind of shore up things. I think it’s very, very hard for a standalone community.”

The gloomy outlook that exists at Fahrney Keedy is not unique in the senior care industry in Maryland — but it is not universal either. The industry’s future in Maryland is a mixed bag, industry experts say, with some communities bullish about the future and others worried for their survival as the worst of the pandemic recedes.

Occupancy at some communities appears to be returning to pre-pandemic levels, and demographic trends indicate that the senior care communities will be needed in the future. But limited staffing and other pre-existing challenges — underfunded Medicare and Medicaid rates for nursing facilities, for example — could pose threats in the near term.

Research earlier this year from the American Health Care Association and National Center for Assisted Living estimated that without immediate assistance, more than 1,600 skilled nursing facilities could close in 2021.

And with the pandemic still taking place and the spread of the Delta variant potentially posing new challenges, uncertainties remain.

“We don’t know exactly how the next few months to year will go. So I think everyone is really trying to get back to normal as much as possible but also staying really aware of changes or new information,” said Allison Ciborowski, the president and CEO of LeadingAge Maryland, an advocacy organization with members from more than 120 not-for-profit communities in the senior care industry in Maryland.

Occupancy back on track?

The pandemic has especially affected skilled nursing facilities, which could be because of the decrease of elective hospital procedures, industry experts say.

The flow of patients who entered skilled nursing and rehabilitation facilities from hospitals slowed to a trickle during the height of COVID-19, says Joseph DeMattos, the president and CEO of the Health Facilities Association of Maryland. (Submitted Photo)

In Maryland, the state stopped all elective and nonurgent medical procedures from March 24 to May 7 of last year. And as coronavirus cases surged in November, the Maryland Department of Health urged hospitals to avoid conducting elective procedures that “may have a high probability of requiring post hospital care in a skilled nursing facility.”

“Because most people who enter skilled nursing and rehab centers enter them from hospitals after a procedure, we are at a historic low in terms of skilled nursing and rehab occupancy,” said Joseph DeMattos, the president and CEO of the Health Facilities Association of Maryland. “And that of course puts, in the near term, tremendous financial pressure on these centers.”

At the Villa Rosa Nursing and Rehabilitation Center in Prince George’s County, the resident occupancy has fluctuated throughout the pandemic, center administrator Barry Grofic said. When the pandemic hit, the occupancy was at around 87%. It is now between 70% and 75% after dropping as low as 60%.

“I don’t think we’ve fully recovered,” said Grofic, who estimates a full recovery could come within the next six to nine months. “Expectations are somewhat lower because individuals just typically have not had the opportunity to go to the hospital, or to utilize the services they did in the past.”

The occupancy trends appear to be reversing across the state.

Occupancy in skilled nursing facilities in Maryland is the highest in at least the past 13 months, according to data from the Centers for Medicare & Medicaid Services.

This aligns with the rise of patients in hospitals for noncoronavirus reasons. As of July 14, hospitals in Maryland were treating 7,010 noncoronavirus patients, said Bob Atlas, the president and CEO of the Maryland Hospital Association. At the virus’s peak around January 7, the hospital system had 1,885 coronavirus patients and 5,838 non-coronavirus patients.

The recent increase in coronavirus cases due to the Delta variant has translated to the hospital system, with Maryland hospitals reporting 152 coronavirus patients as of July 21.

Still, Atlas said, the rise of non-coronavirus patients “tells you that things are heading back to normal.”

Occupancy levels have also affected nonnursing communities.

“The assisted living industry is in a better position to absorb those costs than the nursing home industry is,” says Marilynn Duker, CEO of Brightview Senior Living. “There’s no long-term impediment or reason why all of the communities won’t get back to where they were.” (Submitted Photo)

Marilynn Duker is the CEO of Brightview Senior Living, a Baltimore-based organization that offers assisted living, independent living, enhanced care and memory care services. Brightview has facilities in eight states, including more than 15 in Maryland.

All of Brightview’s locations stopped new admissions for several weeks last year. Occupancy is still low at some of Brightview’s sites, and it may take six to nine months for some to return to pre-pandemic operations, Duker said.

But the future outlook remains positive, she said.

Since Brightview’s locations are private pay and not dependent on Medicare and Medicaid, it has been able to weather the pandemic better than nursing communities, Duker said.

“The assisted living industry is in a better position to absorb those costs than the nursing home industry is,” Duker said. “There’s no long-term impediment or reason why all of the communities won’t get back to where they were.”

Staffing concerns persist

Staffing shortages could hinder the recovery of senior living communities, according to industry experts.

At Fahrney Keedy, staffing shortages are another factor threatening survival. Coetzee, the president and CEO, said “we can’t get staff to apply” — something he attributed to both the labor shortage that is permeating through industries across the country and the health risks that some people may associate with working in senior living communities.

Fahrney Keedy is also requiring all staff members to be vaccinated against COVID-19 by Sept. 1. That could result in the loss of 55 full-time employees, Coetzee said.

DeMattos, from the Health Facilities Association of Maryland, said these shortages existed before the pandemic.

“We all knew of the shortage of nurse instructors, nurses, physicians and nursing assistants,” DeMattos said. “The workforce shortage across all health care was known to the sector, government leaders and policymakers in advance of the pandemic.”

The pandemic heightened those challenges, said Mark McElwee, the administrator at Northampton Manor Nursing and Rehabilitation Center in Frederick.

“People are human beings before they’re nursing assistants or nurses or housekeepers,” said McElwee, who worked at facilities in Texas, New Mexico and South Carolina during the pandemic. “They saw people get sick in the nursing home. They didn’t want to chance bringing that home, or getting sick themselves. And they left.”

McElwee said Northampton’s staffing situation is “some of the best in the area.” Still, staffing is “going to be an issue that we’re going to constantly be looking at,” he added.

The way forward

Industry experts say changing demographics could help sustain senior care communities.

“We literally survive on Medicare and Medicaid funding,” says Steve Coetzee, president and CEO of Fahrney Keedy. “We don’t have a corporate entity to kind of shore up things. I think it’s very, very hard for a standalone community.”(Submitted Photo)

Today, the oldest member of the baby boomer generation is 75 years old, meaning a surge in clientele for senior communities could come within the next eight to 10 years, said Beth Mace, the chief economist and director of outreach at the National Investment Center for Seniors Housing & Care, an Annapolis-based 501(c)(3) organization.

“I think most people are pretty bullish on the outlook for the sector, honestly, if for no other reason than just the demographics,” Mace said.

Duker, from Brightview Senior Living, said “there’s no question there’s going to be dramatic growth and demand for senior housing in general in the next several decades because of the aging of the baby boomer population.”

But the industry is also changing and some communities have used the pandemic to examine their future.

Mark Beggs is the president and CEO of Edenwald, a senior living community in Towson. During the pandemic, 10 Edenwald residents and 36 staff members tested positive for the coronavirus with no hospitalizations, Beggs said.

Edenwald is developing a program focused on providing care at people’s homes.

“Everything was just pretty stable, so it was just sort of a question of well, ‘what do we think people are going to want in the future, and how are we going to address those needs,’” Beggs said.

Ciborowski, from LeadingAge Maryland, said some communities with nursing homes have noticed that people are preferring to get treatment at home rather than in a nursing home. She anticipates those communities will rethink “how to potentially use some of that space.”

McElwee, from Northampton Manor, is optimistic about the center’s long-term prospects but said “we may have to work a little harder and be a little bit more creative.”

“That’s what I think separates the companies that are going to be here versus the ones that aren’t going to be here,” McElwee said.