Sometimes there is an advantage to being a smaller operator. In the case of Cascadia Healthcare, which has 22 largely skilled nursing communities in five Western states, its size has allowed it to act in a nimble fashion in response to the pandemic.
“We are a very collaborative organization. We delegate responsibilities down,” explained CEO Owen Hammond, who noted that the company’s administrators are known as “CEOs.” “What it does is it forces [leaders] to reach out to other facilities in their area to use and support each other, use and support staff. It’s a lot different from a lot of buildings out there.”
Prior to COVID-19, leadership gathered in each other’s buildings. The pandemic forced this peer-to-peer accountability to take place remotely, explained Hammond. “We had to adapt and use Zoom and use our culture of collaboration,” he told McKnight’s this week.
Another regional operator, Mission Health, which has more than 50 facilities in seven states, also told McKnight’s that its size has allowed it to pivot easier to address COVID-19-related needs.
”Our more regional model has enabled us to demonstrate an essential flexibility in our response to COVID-19,” said Stuart Lindeman, president and CEO of the Tampa, FL-based provider. “While we may not have had as deep a resource bank as larger providers, coordinating efforts between our communities has proved effective in supply distribution, personalizing staffing support initiative, and managing unexpected challenges on a community-by-community basis. The ability to have an open, consistent line of communication not only between leadership at the home office, but also between the regional communities themselves, has helped keep us a step ahead of COVID-19.”
Some best practices may benefit all-sized chains during this crisis, according to Nathan Ure, chief operating officer of Brea, CA-based Sun Mar Healthcare, which has 24 skilled nursing facilities and one assisted living facility.
“By focusing on shareable values, seeking out change management opportunities, staying receptive to new relationships, and embracing technology, businesses can more easily pivot and remain viable during this time of disruption,” Ure wrote in an article for OC Business Journal and LA Business Journal.
Still, it’s not clear whether smaller, regional operators are surviving the pandemic better overall. A report to be released this week from the National Investment Center for Seniors Housing & Care’s NIC MAP® Data Service, found that the skilled nursing occupancy rate as of July was 74.6% , down 10.1 percentage points from the February rate of 84.7%.
Bigger provider organizations benefit from economies of scale, noted Beth Burnham Mace, chief economist and director of outreach for NIC.
“The larger operators have the ability to spread expenses over a larger group of properties,” she said. “They can spread their fixed costs over a larger group of properties.”
But the alternative view of this, she added, is that a larger ship is harder to turn.
Cascadia’s communities, so far, have weathered the pandemic “very well,” said Hammond, who founded the privately held Cascadia in 2015 with three partners. From March to June, the company did not have any resident cases of COVID-19, said Hammond, noting that a lot of the buildings are in sparsely populated rural areas. That situation changed, but currently, most of the communities do not have any COVID-19 cases.
But the pandemic has had an impact. He likened it to the concept of being in a foxhole during World War I and a grenade lands in it. When the friend you are fighting alongside stumbles out of the foxhole, dazed, bullets raining down on him, it is the job of the others to bring him back and revive him and put a gun back in his hands, Hammond said.
“We can prepare all we want for war and infection control, but I don’t think you can really prepare for a pandemic such as this,” he said. “When it hits a building, it’s like a concussive wave going off. You can have all the things put into place, but when that goes off, it affects everyone at the core, even their families.”
One lesson the company has learned from the pandemic is the strength of its caregiving workforce.
“They are putting their families at risk because they truly care about their residents,” he noted. “They are not Starbucks workers who clock in and clock out. They put themselves in harm’s way. It renews my faith in industry and the people who are a part of it.”
Similarly, Ure of Sun Mar said the company learned the value that employees place on their families’ safety. “To alleviate fears, we’ve introduced a number of technologies, such as CDC-approved disinfectants deployed by our new environmental Strike Team that treats our 25 facilities on a quarterly basis — all designed to keep our employees and their families at home safe and healthy,” Ure wrote.
To help taxed staff, Cascadia has implemented add-on pay for nurses. It also has covered employees’ meals for several days outside of work. Other perks include putting on parades for staff and giving out swag, such as T-shirts, to let staff know the company is thinking of them.
Lindeman of Mission Health said the company’s belief in supporting employees in an effort to lead to consistent, quality care for residents has held steady during the pandemic.
“We expanded and innovated the way we communicate with employees, focused our efforts on meeting their top needs, and created new benefit programs that continue to give employees additional flexibility and control,” he said.
The cost factor
Both Cascadia and Mission Health are dealing with mounting costs related to the pandemic. Expenses include extra personal protective equipment and staffing, particularly agency staffing, Hammond of Cascadia said. CARES money has been helpful to offset these costs, but it is dwindling, he said.
Mission Health, meanwhile, is managing fluctuations and looking ahead with strategies to stay financially healthy, Lindeman said.
“We are cautiously optimistic about the outlook,” he said. “The cost of testing over time and supplies are still unknown and therefore difficult to estimate. Census will continue to be an opportunity as projections are less than favorable, as fewer people opt for elective surgeries requiring skilled rehabilitation. However, as patients need more clinically complex care, we believe that this will become more of a niche for communities, both urban and rural, relieving some revenue pressures.”