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July 10, 2020 04:40 PM

Senior housing occupancy hits record low

Alex Kacik
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    Senior housing occupancy reached a new low in the second quarter as assisted living, independent living and memory care providers stopped new residents from moving in to stem the spread of COVID-19, new data show.

    Senior housing occupancy fell from 87.7% in the first quarter of 2020 to 84.9% in the second, marking both the largest drop and the lowest occupancy rate since the National Investment Center for Seniors Housing & Care began collecting data in 2005, according to its new report.

    While some better-resourced senior housing facilities will be able to weather the pandemic's margin crunch as costs rise and revenues drop, others are facing closure or consolidation, said Beth Burnham Mace, NIC's chief economist. Meanwhile, the economic impact of the pandemic is causing evictions to rise, vexing providers who are starting to recognize housing instablity as a social determinant of health.

    "Some senior housing operators may not be able to withstand this," she said. "There will be some consolidation in the industry."

    Senior housing providers will likely limit new residents until a vaccine is readily available, given how COVID-19 has disproportionately impacted these communal facilities, Burnham Mace said. Personal protective equipment access is still an issue and testing processing is lagging, she said.

    Senior housing operators are implementing new sanitation protocols, screening processes, ventilation systems, staffing strategies to limit employees' travel between facilities as well as socialization opportunities for residents, Burnham Mace said.

    "The framework has shifted from a sprint to more of a marathon, except it is a marathon without a destination," she said. "Operators are acknowledging that their leaders and staff have to set themselves up for a long duration of a hard working environment."

    The worst of the senior housing occupancy decline is seemingly past, but setbacks are likely far from over, said Chuck Harry, NIC's chief operating officer.

    "Many properties still lack access to personal protective equipment and COVID-19 testing to keep residents and caregivers safe," he said in prepared remarks. "Property operators and policymakers continue to need reliable data to make the best decisions, especially in states and cities that eased social distancing restrictions this summer and are already seeing major spikes in illnesses."

    The NIC also unveiled a report this week on skilled-nursing facilities, finding that occupancy fell to 78.9% in April compared to 84.4% in April 2019 as non-urgent surgeries stopped and states and counties imposed restrictions on the sector to limit the spread of COVID-19.

    Bucking the typical trend, Medicaid revenue per patient day rose 4.9% from March to April as many states increased reimbursement to help SNFs manage the pandemic. But the boosted Medicaid payments still may not be enough to cover the cost of care for residents in certain states, NIC experts said.

    Even though nursing homes have been COVID-19 hot spots, the Trump administration delayed support and offered limited to resources to SNFs, a new report from several U.S. Senators found. The federal government delivered faulty and unusable PPE to SNFs and left eligible nursing homes off the distribution list, according to the report.

    The industry needs to adopt a new model, both from a reimbursement and coordination perspective, to better support skilled-nursing facilities, said Lyndean Brick, CEO of the consultancy Advis.

    "SNF reimbursement is pitiful, consequently staffing rates and resources are limited," she said. "We need to look at if hospitals should be mandated to partner with SNFs and how we can change the current dynamic."

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