Memory care operators will have plenty of needs-based demand to sustain and grow their operations in the years ahead – but only if they can shore up issues in staffing and other crucial areas.
For most memory care operators, the darkest days of the Covid-19 pandemic meant major staffing challenges and difficulties caring for residents. In 2024, many of those pressures have lessened, but staffing will likely continue to be an operational and expense headwind for some time ahead.
“I really think we’re kind of in the normal right now,” Josh Krull, CEO of McLean, Virginia-based Artis Senior Living said during a recent Memory Care Business webinar. “Our staffing challenges are going to continue … as we don’t have enough folks to take care of the people in our building, and we’re going to continue to do our best to hire, retain and reward our employees.”
At the same time, memory care residents and their families are growing more knowledgeable about available senior living options, and are doing their research online. For memory care operators, this raises the sales and marketing bar for attracting them even higher.
The good news for operators of memory care units is that Krull, along with his fellow webinar panelists, seeways to reduce expenses and grow margins while improving operations for a new generation of residents. And despite the memory care sector’s ongoing pain points, it is also a time of innovation within the industry with many stakeholders across the country all focused on good outcomes and best practices, according to Melissa Dillon, corporate director of memory care at Solana Beach, California-based Senior Resource Group (SRG).
“We all have our thinking caps on,” Dillon said during the recent webinar. “I know it’s going to come to action, and I can’t wait to see what that looks like. And I don’t know if we know yet.”
Staffing and other pain points
It’s no surprise or secret that staffing is a longtime thorn in the side of memory care operators, especially given that the business requires more hands-on support for residents than other settings lower on the care continuum. Those woes continued in 2024, but they have taken on new forms than in the past.
In an effort to ease staffing issues, Silverado has established a transition- to- practice program for its licensed vocational nurses (LVNs), who are joining the organization with less hands-on experience than in the past, according to Kim Butrum, senior vice president of clinical services.
Under that program, the company employs a clinical educator that helps train nurses and ensure they are both passionate about and educated for the role.
That said, some staffing pressures have already eased for Irvine, California-based Silverado, she added.
Krull said that he sees operators grappling with pressures at both the company and community level. Company-level pain points are generally seen through construction, acquisition, financial environments and debt challenges, along with efforts to modernize platforms.
Community level challenges are still largely stemming from staffing woes, including the fact that caring for people living with cognitive decline requires a “big toolbox” of skills that newer workers don’t always have.
“Probably the biggest operational challenge is getting real about what our team needs to be successful, [and] developing the curriculum and the programming to be able to get them to that point,” Krull said.
Dillon said she remembers the days when staff training sessions were mostly conducted live and in-person. Then, the industry swung toward computer-based learning. But neither are altogether suited to adequately teach people the skills they need, which is why she said she thinks the industry must “swing back to the middle” with regard to training.
That is why SRG holds both in-person and virtual training for staff
“We have a 24-hour run business, but I think the rubber has to meet the road there somehow to be really individualized and personalized in what we’re doing,” she said.
According to Butrum, Silverado also has returned to in-person training after switching to remote methods during the pandemic. The company at its home office holds two-day “deep dives” for new nurses, and doesn’t even have them work in their designated community for a month, before they learn all the required new skills.
What has made a difference has been having the “organizational discipline” to properly conduct training, she said.
“The way you retain, the way you get people excited about what they’re doing … is really by following what we have in place,” she said.
Rebuilding margins
Like other kinds of senior living operators, memory care operators have seen their margins dip in the age of the pandemic, partly to do with the higher cost of staffing and other line items. To regain compressed margins, memory care operators are ensuring they’re charging the right amount of money for the care they’re offering, and are putting lots of thought into retention.
Dillon said SRG has embraced the costs going into memory care and acknowledged that it’s going to continue to be expensive, though some checks and balances are in place, such as sticking with a staffing plan and completing timely assessments of staff.
“We are not going to compromise or apologize for our cost. And our cost is high. It takes that cost to run that level of program,” Dillon said.
One way memory care providers can focus on retaining margins even in the slightest is through staff retention. Silverado has done this by offering additional training for staff and leaders, which cuts back on costs associated with recruiting and retraining.
Burtrum added that focusing on having high quality programming that justifies the cost and demonstrates value for residents and their families.
Krull noted Artis Senior Living is primarily a standalone memory care provider, so additional revenue isn’t brought in from assisted living or independent living sources. The way the company normalizes its margins comes through cleaning up “sloppy” practices and optimizing operations in other ways.
“It’s really systematically taking apart your business and building it in a better way that you can be accountable up and down the process … that’s where you ultimately find margin,” he said. “The business has been tough and expensive … at some point we have to look internally about how we can run it better.”
All three panelists are also looking into ways to keep residents in their care settings – and by extension, in their communities and paying rent – for longer. Residents have in recent years arrived at their communities in need of some higher-acuity services than in the past, and operators are catering to those residents by working with doctors and physicians.
“I think everyone is trying to figure out a way to keep the …the high-acuity people in-house, not having to transfer out,” Burtrum said. “And the way you do that is to get additional medical services there.”
New reimbursements for assisted living and memory care, similar to the kind of federal dollars skilled nursing operators already get, are other potential ways to bring up margins. Dillon and Butrum said they would welcome such measures, in the off chance they were enacted by the federal government. Still, Krull was skeptical that such programs can be enacted beyond the state level.
At the end of the day, though, Krull noted that he’s optimistic about the innovation underway in memory care, as are Dillon and Butrum.
“I am very hopeful about the equality and the inclusion movement within memory care,” Dillon said. “Don’t take your foot off the gas pedal.”
