Thought Leaders Explore 2023’s Key Issues for Senior Care at McKnight’s Power Panel
On February 22, senior care thought leaders from four notable companies came together at McKnight’s Senior Living Power Panel to discuss issues, opportunities, and uncertainties lying in wait for senior care in 2023.
Panelists included Pinnacle’s Executive Vice President of Business Operations, Sarah Dirks, along with Patrick McCormick of Plante Moran, Rick Foley of Omnicare, and Rick Taylor of Sentrics. Each brought unique viewpoints from their respective areas of expertise in employee retention, pharmacy, technology, and finance.
Questions addressed in the roundtable discussion, included:
What is the level of optimism for the industry?
What does the “new normal” look like?
How can we improve the staffing crisis?
What does the year hold for census recovery?
How do we improve quality of care?
What do economic, inflationary, and supply chain pressures mean for the industry?
You can watch the complete Power Panel below.
We’ve also compiled the following questions and answers from the panelists.
On a Scale of 1-10, what’s Your Level of Optimism for Senior Care in 2023?
Sarah Dirks: I’m pretty optimistic. I’d give it a six or seven for the next few years. With staffing and all the other upcoming mandates, there are going to be a lot of changes, learning curves, and roadblocks for our providers. I think long-term care is resilient and will continue to do what they do best: provide great quality of care. However, I think it’s going to be intense and stressful for a period of time.
Rick Taylor: I’d give it between a seven and an eight. There are a lot of external pressures, but overall this industry is something that’s needed. I think there are some really exciting things coming down the pipe because of the lessons we’ve learned over the past few years.
Rick Foley: I’m a seven, eight, or nine depending on the day. During the height of the pandemic, you saw that we have are some really good people in these facilities taking care of our loved ones. I’m really optimistic because I think the resiliency of long-term care has shown time after time that it comes out on top and provides a great product. Having seen the people on the frontlines work, it makes me really optimistic about the future.
“Having seen the people on the frontlines work, it makes me really optimistic about the future.”
Patrick McCormick: I’m cautious. I’m at a four from a financial perspective. I agree with the other panelists from a quality-of-care perspective, but on the financial side, I think we have a lot of pain that’s still coming. I think we’ve got slow recovery still happening across our service lines. We’re still working through inflation, we still have higher wages, and I don’t think we’re done with those components. There are inflationary pressures that are going to be happening from an overall perspective. I still think we have a lot of disruption in the revenue cycle as a whole. We’ve got slower payers and more managed care scrutiny, which will lead to more disruption.
What does the ‘New Normal’ Look Like for Senior Care in 2023?
Patrick McCormick: I think the first piece is around census. We’re used to high census levels in many buildings. We need to adjust our expectations and cost structures. Some providers are completely full and have waiting lists again. Others are at 60-70% occupancy and struggle with payroll. So, finding that new normal of how your business is going to operate from a census perspective is important.
The other thing is that you can’t cut your way to profitability. You’re going to have to embrace growth. We’ve been so focused on providing great quality of care during the pandemic, that we haven’t looked into new business ventures and that’s going to be important. I also think we’ve lost some discipline on the revenue cycle side. We have big hearts in this industry, so we’ve been accommodating families and residents, but this is a business at the end of the day. So, we have to make sure we get all the right documentation up front, work through proper channels for reimbursement. I think some of that rigor has been lost. Going back to some basics is going to be important.
Sarah Dirks: You’re going to have to be more adaptable and keep up with everchanging regulations that will be coming. Long-term care operators will need to be more creative and explore diversification. Some operators we work with are moving towards home health and pharmacy sectors, adding those business models into their platforms, which could help moving forward.
Rick Taylor: We have to embrace change. There are some good things that have come out of the last few years. Embracing technology, concentration on engagement, and increased focus on the frontline staff have all been positives. Because we don’t have data to go on in this “new normal,” we have to be more flexible.
We also have to figure out how to do more with less because staffing is clearly an issue. We have to allow those people to be more productive. That means streamlining workflows. The answer of, “this is the way we’ve always done it,” is no longer the answer. You really have to take that lean thought process and strip out the things that are not bringing value to residents or business.
“The answer of, ‘this is the way we’ve always done it,’
is no longer the answer.”
Rick Foley: Doing it yourself is impossible now. You have to find partners who will literally partner with you in the care of your residents, not just sell you something.
With the stress of the public health emergency and the staffing exodus, we’re realizing that we’re at this crossroads and you can’t cut your way to success. You need to upskill your staff, upskill the way you deliver care, and find partners who are committed to doing the same.
Finally, we need to get back to basics on other care areas. We’ve taken our eye off the ball on everything that isn’t infectious disease. We’ve gotten really good at that out of necessity, but it seems like we’ve taken our eye off the ball on a lot of things we focused on prior.
How Can We Improve Senior Care Staffing in 2023?
Sarah Dirks: Hire based on mission and workforce culture fit and reinforce your goals and mission through professional development, staff interaction, coaching, workshops, and employee recognition programs.
Continuously engaging with your staff is going to be key. Reward those who go above and beyond while also celebrating your successes. Providers are so focused on what they have to do that they’re focusing on where they’re falling short, rather than celebrating what their team is doing positively.
It's also essential to continuously monitor employee engagement levels. Your staff will tell you how you’re doing, why they’re leaving, why they’re staying, what you’re doing well, and where you need to improve. They’ll also tell you why they think other people are leaving. So, solicit their feedback and use it to improve retention and recruitment.
“Providers are so focused on what they have to do that they’re focusing on where they’re falling short, rather than celebrating what their team is doing positively.”
Rick Taylor: Hiring the wrong person can put you in a tailspin. New, younger workers expect technology when they arrive. They walk in expecting technology to help them do their job better. If we don’t have it in our business, they’re not going to stay long.
Rick Foley: These people got into this because they want to take care of people. So, we need to empower them in that mission. You need to have partners in your facility who are listening to what’s going on and serving as a conduit for information they can use to improve the care they’re providing.
Patrick McCormick: Providers need to continue to be flexible and accommodating. Workforce flexibility is a positive that’s come out of the pandemic, as is being creative with shifts and scheduling to accommodate different lifestyles. Putting my financial lens on this, wage inflation meeting regular inflation will help with recruitment and retention. For the past six months, wages have been outpacing regular inflationary growth. Look at staffing trends during pandemic outbreak periods and learn from those experiences to improve how we handle them moving forward to the benefit of the employee.
What Does the Future Hold for Senior Care Census Recovery and Growth in 2023?
Patrick McCormick: We’re seeing some rightsizing of the skilled buildings but there’s still a gap. We’ve talked about private room conversions for a long time, and many providers had already embraced it, but there’s still a gap. If you have the ability to do private rooms, that’s preferred. Depending on your occupancy level, decreasing the size of your footprint can help. We’ve seen providers really struggle with census and change what a unit or wing in the building might look like, whether it’s a memory care expansion or an affordable assisted living product.
Many associations are looking to expand waiver components across the states. Not every state has assisted living waivers. In some of these buildings there could be a combination aspect to that.
At the same time, we’re seeing an expansion of hospice programs and some of the home-health expansions. As higher acuity patients are in our buildings and continuing to evolve, we’re seeing hospice becoming a more important offering, and it provides a great revenue source for providers. It goes back to a growth mentality. We have to think a little bit differently at what recovery looks like from a census perspective.
Sarah Dirks: Operators are going to need to hire staff and there aren’t a lot in the candidate pool right now. A lot of people have left the industry and not come back. Operators will need to get creative with their recruitment efforts, benefits they offer, and incentives. They need to be the employer of choice and I think that will help with census improvement.
Rick Foley: At the end of the day, our patients are consumers of healthcare. What is the quality of the product we’re providing at the facility level? Are we providing the service they’re looking for? If not, what do you do to improve that service? Does it come down to upscaling education, specializing in a niche market like memory care, Alzheimer’s care, or something else. All of these little niches help providers manage their place in the market, especially when you get to the rural areas where patients are a little more scarce. You’re seeing facilities identify themselves as experts in niches, which yields a higher census at the end of the day.
“You’re seeing facilities identify themselves as experts in niches, which yields a higher census at the end of the day.”
Rick Taylor: It’s about redefining how we serve the resident, and it may not be inside four walls. Across the board, how can we serve more? Some of that is mindset. We have to reset the expectations. But we also have to reset the expectations of where and how that care is delivered.
How does Senior Care Quality Get Better and Stay Better in 2023?
Rick Taylor: We have to be very conscious about the social isolation that happened during Covid. We need to understand what the resident is doing when they’re with the patient. We need a better way to document that. It currently happens at the end of the day rather than in real time. Arming residents with the right information to be more accurate when they’re interacting with the patient. Then taking this information and communicating it to the next shift for a better handoff to ensure consistent quality of care.
Rick Foley: Expanding clinical expertise. We need to give nurses their confidence back. Talking to some of them, it’s almost like they’ve been through battle. They look fatigued and their confidence in the industry has been shaken. Remind them and support them of their expertise. Provide them outlets for education. Give them tools to make their job easier and set them up for success.
Sarah Dirks: Providers need to understand that expectations have changed due to Covid. If the staff better understand those expectations have changed, they’ll be better equipped to impact that positively moving forward. Residents don’t understand that staffing’s tough to fix right now, so communication is key to help them. It’s also hugely important to have a way to listen to and understand your patients and employees.
Rick Taylor: When I ask providers about how they see data improving care, they struggle because they’re not sure what data points are meaningful. Machine learning can help to read the tea leaves from the rows and columns of data and help to figure out what’s going on, what you have to do about it, and make suggestions on the right corrections. The human eye can only see change of 10% or more. Data can see change of less than 1%. Typically change doesn’t happen 10% at a time. It happens in smaller chunks like 1%, so we don’t really notice it until it’s bad. So, imagine the impact we can have on care when we can see around the corner. Using this kind of data will allow us to get ahead of the curve with patient care, particularly with declining patients.
“Using this kind of data will allow us to get ahead of the curve with patient care, particularly with declining patients.”
Patrick McCormick: We’ve seen some providers who are watching the patterns of residents to detect if there are aspects going on from a care perspective. As an industry, we’re not doing a good enough job analyzing the cost of care. You know McDonald’s knows how much every pickle costs on a hamburger. We have no clue on our care delivery models. I think that’s where data analytics comes in; creating those profiles, understanding cost structures, understanding things like the costs of drugs in every stay and how are we going to refine that from a cost perspective? If we look at levels of care in the same way, we don’t understand this rising acuity, particularly on the assisted living side where we may have levels of care, and what are the cost drivers that are there.
What do Economic, Inflationary, and Supply Chain Pressures Mean for Senior Care in 2023?
Patrick McCormick: The reimbursement systems have not kept up. We really need to be analyzing what the new cost structure and revenue stream looks like. We’ve had some providers just opt out of certain contracts. They have this mentality that they need to fill the building, but if we’re losing money on the basis of the contract due to the change in the cost structure, it doesn’t make sense. The other inflationary impact is rising interest rates.
Many providers are struggling with financial performance and its triggering lenders to get nervous. We’re seeing bank and bond covenant violations, we’re seeing audit opinions with growing concern issues. The liquidity from all the stimulus is gone and so you’ve been masking some of the inflation because you had excess funds from all of the stimulus. Now we’ve burned through that, and we need to get back to normal, realized budgets looking at that revenue and expense side of things. We have to grow. We need to look at staffing levels. We need to increase wages. It’s a big puzzle. There’s not a silver bullet here.
“The liquidity from all the stimulus is gone and so you’ve been masking some of the inflation because you had excess funds from all of the stimulus.”
Rick Foley: To go off the previous pickle analogy from a supply chain perspective, if McDonald’s runs out of pickles, there are a few less Big Macs. If we run out of lifesaving meds, that impacts the life expectancy of someone’s loved one. So, at the end of the day, you need a partner that has the resiliency to manage those supply chain hiccups. Sometimes a manufacturer will say they’re not making a med anymore and you go from six suppliers to one and now you have a price increase and a backlash from the industry. Managing those things behind the scenes and having a partner who’s going to be able to help you guide you through it is going to be important.
Rick Taylor: I’ll also tag on to the McDonald’s pickle analogy from a technology standpoint. As I talk to operators all over the country, the one thing they all admit is that they don’t know how much time staff is spending with different types of patients. Using technology to figure that out, streamline things, and make sure you don’t have that cost creep inside is one way to do that. It’s not the only answer, but the technology exists to do that. It’s low-hanging fruit. It’ll also streamline the level and quality of care that’s delivered.
On the regulatory side of things, everybody’s getting squeezed on the Medicare and Medicaid side of things.
We have this workforce issue as well. So, it goes back to being able to do more with less. As a technology person, I do not believe technology’s role is to replace people, especially in this business. There’s nothing more healing than the human touch. But streamlining the workflows is super important. To be able to increase the accuracy of the record keeping is key. And part of that is on the technology providers themselves. The user interface has to be simple and immediate to save time.
Q&A From Audience:
Following are four questions and answers pulled from the audience Q&A session of McKnight’s Power Panel:
Q: Which areas in provider operations are you finding opportunities for savings?
A: Pat McCormick: Two-thirds of the cost structure in most facilities is payroll, so it’s looking at overtime, staffing schedules, staff transition. Also, volunteer programs were robust pre-pandemic, but they went away out of necessity and we’re starting to see those come back. If you can embrace a good volunteer program, quality of care goes up, and it allows your staff to work to the top of their license. So going back to those volunteer programs can make a big difference from a quality of care and cost perspective.
Q: What are the key factors that influence employee satisfaction and loyalty in senior care?
A: Sarah Dirks: It’s imperative to form bonds and your loyalty should grow. Without loyalty, trust is going to be limited, commitment will suffer, and bonding with your team is going to be difficult. All of this can increase turnover. So, ultimately, it’s going to be imperative to create trust, build morale, lower stress in the workplace, put effort into clear communication, and be transparent. This doesn’t mean you have to tell them every single thing, but give them the transparency that will be meaningful to them.
Q: What tips do you have for successful technology adoption in senior care?
A: Rick Taylor: You have to be patient and work through the uncomfortable phase of adopting new technology. You have to be comfortable with being uncomfortable and you’ll get to a point where the new technology makes things easier and better. Creating adoption plans and adoption committees are super important to be successful with the technology.
Q: Where do senior care pharmacy services go from here?
A: Rick Foley: We’re trying to help people age in place. We don’t want them to have to progress to acute care and post-acute care. If they can stay in independent or assisted living that’s great. So, how do we help them do that as a pharmacy? Regulations haven’t caught up. I’m not one to say we need more regulations, but think about what a resident’s medication regiment looked like 20 years ago versus now. You had multiple prescribers, multiple pharmacies, and when someone’s admitted to the acute care setting, more often than not, it’s due to an issue with the medication—whether they had it or didn’t have it, took too much, took the wrong thing, or took the wrong combination. We really need to figure out how to leverage our clinical expertise from the long-term care side and reimagine it back to what it would look like in an independent or assisted-living side to let those folks age in place.
Final Takeaways:
In closing the event, moderator and Executive Editor for McKnight’s Senior Living Jim Berklan asked the participants for one thing they wanted the audience to take away from this discussion.
Sarah Dirks: Providers need to become more sophisticated and partner with more companies that provide them sophisticated solutions to help them do their job the best way possible.
Pat McCormick: Don’t just develop a budget, you have to develop a plan.
Rick Taylor: I echo exactly what Pat and Sarah said. Those two things are perfect.
Rick Foley: When shopping for a clinical vendor, don’t look for a vendor, look for a partner.
There are challenges ahead for senior care in 2023 as we emerge from the public health emergency, but there are also opportunities. How providers, residents, and partners balance both will be paramount to overcoming the challenges and benefiting from the opportunities in 2024.
One tool you can use to help overcome the challenge of high staff turnover is this free guide on “5 Proven Ways to Reduce New-Hire Turnover.” It’s loaded with strategies and tactics you can begin using immediately to keep more of your people.
Editor’s note: The previous transcript has been edited for length and clarity.