Luckily, food wasn’t the main focus of a business lunch Monday. I lost much of my appetite before I stepped foot in the restaurant.
The gathering took place at a respected dining establishment in a nearby mall — the old-fashioned kind with huge parking lots surrounding it and department stores as anchors.
Except in this case, one entire wing — formerly a Macy’s store, I believe — was in the process of being demolished. It was the first time I had ever seen open parking spaces at this mall, and there were plenty. The huge store was gone, like an amputated limb, while the rest of the retailers and restaurants seemed to anxiously ponder their fates on the other side of a big operating room curtain.
Eventually, more will be torn down and apartments will be built as part of a redevelopment. It’s not the only mall in our area undergoing such a stark transformation. I had read about it, but it was jarring to see in real life.
So, nursing home operators, you aren’t alone when you see your world’s infrastructure start to crumble away.
The release of a LeadingAge report Tuesday, “Nursing Home Closures and Trends, June 2015-2019,” is enough to give stakeholders indigestion by itself. There’s not necessarily a ton of new info in it. (A lot of nursing homes have closed over the last four years; lengths of stay and census levels are also down.) But it does make for interesting reading as a powerful accumulation of suspected and disparate anecdotal info. One of the most stunning realizations is that nearly half of the recently closed facilities were 4- or 5-star rated facilities.
For many reasons, nursing homes are under siege, much like the local mall and, yes, even the newspaper industry. Long-time publications have faded and many journalists have lost jobs — positions that will never come back. Sound familiar?
The fact is, the landscape is being reshaped and it’s not liable to ever return to its previous form, so providers better get used to it. This current round of upheaval is as uncomfortable as it is irreversible. Sure, the oncoming wave of baby boomers should keep many caregivers busy. But this predicted clientele “tsunami” is going to spray toward increasingly diverse living options. These consumers will keep splintering their living preferences into assisted living and other alternative living arrangements, some of which probably haven’t been invented yet.
Even worse, experts I spoke with Tuesday agreed that there’s more bad stuff still to come.
“We know of numbers of [additional] facilities closing — the bloodbath isn’t over,” said Don Husi, Managing Director and co-head of Ziegler’s Senior Housing & Care Finance Practice.
Some 189 nursing homes closed in the 2018-2019 cycle, according to LeadingAge figures. Expect roughly the same in 2020, Husi said. With closures accelerating each year during the period covered by the study, that might indicate a leveling off. Might.
LeadingAge issued four recommendations to confront this uncomfortable new future. The first three are expected and nothing to hold one’s breath over: 1) Lobby for better medicaid payments; 2) campaign for regulatory reform, particularly survey administration; and 3) create a new Critical Access Nursing Homes designation — like hospitals’ — to ensure that isolated or rural providers in particular are able to maintain adequate services.
The fourth recommendation is the only one that providers truly hold sway over themselves. It is a call to “reconsider” how services are delivered.
“By creating robust networks of aging services that meet all sorts of people’s needs, nursing homes can not only deliver an integrated network of services, but also create for themselves sustainable, diverse streams of revenue to support the services they provide,” wrote report author Brendan Flinn.
So there you have it: Perhaps a bit basic and maybe something you’ve heard before. But as the “closures” report notes in so many words, things are getting real. Expand your product lines. Offer more and different services. But make them closely affiliated to, or direct enhancements of, what you now do.
Husi notes that it’s been “proven” for a while that it’s “very difficult” for skilled nursing operators to become effective senior and independent living operators, and vice versa. Providers have become more sophisticated, with better data collection and examination of what services they do best, however. This can help inform a game plan regarding services in which they can specialize.
This is good advice, whether or not a report recommends it.
And while it might not stop the industry’s further bleeding, it could keep your own community out of the hospice wing.
Follow Executive Editor James M. Berklan @JimBerklan.