Assisted Living Funding

Senior Care Operators Need More Assistance In Light of COVID-19

Senior living operators including independent living and assisted living communities have shown declining occupancy rates due to COVID-19. In the second quarter of 2020, senior living occupancy rates dipped to 84.9%, down from 87.7% in the first quarter and down from 87.8% in the second quarter of 2019 (this reporting was the lowest since the second quarter of 2011)1,2. According to the National Investment Center for Seniors Housing & Care, assisted living communities’ occupancy rates have declined faster than independent living communities’.

We speculate that several factors are leading to declines in occupancy. Firstly, seniors are hesitant to move into communities which they feel will put themselves or others at an increased risk of contracting or spreading COVID-19. Secondly, and in our opinion most notably, more people are working from home, which may mean they have more time to care for their aging loved ones. The latter point seems to bear more weight, because not only are senior living communities’ volumes down during this time; home care providers’ volumes are down as well3. In other words, an industry which serves people in the comfort of their own homes is not getting the business that senior living communities seem to be missing. However, we need to know more before we can definitively say that home care is not picking up the slack from senior living occupancy levels. Yes, home care volumes are down, but are they down because seniors and their families are not hiring caregivers at the same rate? Or, are volumes down because hospital volumes are also down and hence home care companies are getting fewer referrals from hospitals?

Whatever the reason that homecare and senior living volumes are down, the fact of the matter is, they are down. While these types of business serve our senior population, they are having a harder time doing so as their budgets are squeezed and costs have increased because they must provide COVID-19 precautionary care. These businesses have likely been able to apply for grants and loans through the Small Business Administration; however, they have not yet received any additional funding to help cover the expenses of testing and managing COVID-19 responsibly like nursing homes have. Currently, the Senate is working on a bill to help with such expenses through the passing of the Health, Economic Assistance, Liability Protection, and Schools Act (“Heals”). According to LeadingAge, the package does not do enough to help aging service providers, particularly as it relates to the distribution of PPE and covering some of the additional costs health care providers must incur from managing COVID-19 safely. If you are interested, you may read more about LeadingAge’s synopsis here.

It’s important that Congress appropriate funds to senior living providers because in the past decade senior living communities have stepped in and filled a void that nursing homes have not been able to, which is provide a lower-cost setting of care for people who do not have skilled medical needs. Senior living is part of the US’s health care system, and in order for this country to protect itself from COVID-19, senior living communities also need the same defenses as hospitals and skilled nursing facilities. Congress needs to step up and not shortchange these providers.

 

Sources:

  1. https://www.mcknightsseniorliving.com/home/columns/guest-columns/senior-living-trends-prepare-for-historic-changes-in-2020/
  2. https://www.nic.org/nic-map/assisted-living-industry-analysis-reports/
  3. https://homehealthcarenews.com/2020/05/after-weeks-of-coronavirus-chaos-home-based-care-providers-welcome-early-signs-of-normalcy/

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