Doctor and senior woman wearing facemasks during coronavirus and flu outbreak. Virus protection. COVID-2019..

The general view is that these are heady times for the seniors housing and care sector. It’s not difficult to see why.

Occupancy levels are robust across the board. Payments are as good, or better, than they have ever been. It’s hard to recall a time when access to capital was easier. And future projections forecast rosy demand.
So what’s not to like? Maybe it’s the fact that while others are growing faster than 10-year-olds, nursing homes are stuck in neutral. It’s a somewhat baffling trend that should serve as a wake-up call.
Consider these revealing numbers from Market Area Profile Data and Analysis Service (a component of the National Investment Center for the Senior Housing & Care Industry): Between 2004 and 2006, the number of new independent living properties increased by a remarkable 24%. For assisted living, the hike was a very respectable 14%.
Meanwhile, the number of skilled nursing facilities remained essentially unchanged.
During this period, nursing homes’ market share dropped from 53% to 49%, a sobering 7.5% loss.
To be fair, there are certainly mitigating circumstances. The federal government and many states have aggressively encouraged a divestiture from skilled care into home- and community-based options, which encompass independent living and assisted living.
At the same time, many skilled operators are essentially remaking themselves as rehabilitation centers, in an effort to capture more Medicare dollars.
But even so, there’s a very unsettling shift taking place here. Nursing homes remain the big kahuna of eldercare. But their dominance is being challenged by other players, and that pressure shows few signs of abating.
So what are nursing homes to do? One option is to embrace the status quo. The result will be fewer skilled care facilities, which will certainly mean less leverage in Washington.
Another is to get out of the skilled nursing business, which some operators are doing. Yet another is to seek alternate government funding, a preferred choice among many for-profits.
My suggestion is one many providers won’t want to hear: Start seeing your customer differently. Let’s face it; many operators act as if the government is the only client that matters. That’s easy to understand in a field where Uncle Sam has historically paid most of the bills. But times are changing.
Nursing homes need to begin acting as if their residents and the residents’ children are the only customers who matter. Otherwise, there’s a very good chance facilities will be overtaken by competitors who’ve warmed up to the concept.

John O’Connor is vice president, McKnight’s Long-Term Care News. Contact him at [email protected]