By Steve Moran
I have a friend of more than 50 years (since our senior year in high school) who makes her living as an advocate for older people who are struggling with the harsh realities of growing older in an increasingly complex and difficult world.
She is a major senior living skeptic, every few months sending me one more news story about terrible things that have happened in senior living.
I respond by talking about the good things that are happening in senior living, though I confess, she has closely followed my senior living consumer journey, which has done nothing but confirm all her beliefs.
Confirmation Bias
As human beings, once we have painted a mental picture of something, we tend to look for confirmation of what we believe. This is not criticism, because we all do it every day.
Right now, as people follow the tragic fires in Los Angeles, reading the same exact stories and watching the same newscasts, one group of people is convinced it is all global warming, and everything they read confirms that belief.
Another group reads the exact same stories and watches the exact same newscasts, and they are more convinced than ever that it was prioritizing the environment over people, and everything they read and watch confirms that belief.
So my friend and many others do the same with senior living.
And in fairness, most senior living leaders read those same stories and dismiss them as on-offs or an unfair regulatory enforcement or unreasonable courts and juries who don’t understand.
And finally, more often than should be true, my friend’s negative thinking about senior living is valid.
The Money Narrative
The underlying narrative of each of the stories she sends me is that profits are more important than people. It is big corporations who are dominating the business, and they only care about margins and not people.
It is frustrating because on one hand, she and these stories are exactly right. Decisions are made in an effort to control costs, to make a margin, and to keep fees down. But what gets missed is that there are senior living organizations that are doing a great job for teams, a great job for residents, and a pretty good job for families and are making significant margins.
In fact, the very reason they have great margins is they are doing an outstanding job for their customers.
Mostly the companies that are losing these lawsuits, that are doing a mediocre job, don’t have great margins. Their solution to higher margins is not cutting costs, cutting staffing. It is leading better, managing better.
I Am Baffled
I am baffled that so many companies are willing to accept mediocrity, and in accepting mediocrity, they put people’s lives and happiness at risk — and, from a pure profit perspective, leave massive amounts of money on the table.
Recently, Brookdale reported on their monthly occupancy, and it is frankly embarrassing. While the NIC occupancy data indicates the Q3/24 average occupancy is 86.5%, Brookdale’s is stuck at 79%. How does Brookdale or any company that sits below the NIC average not treat this as a “house on fire” event?
Particularly with the boomers aging, this is a 100% fixable problem. Unless a community is in a fill-up mode, every single community should be over 90% occupancy. (Yes, I know there might be some random market that would make this impossible.)
This is fixable in months, not years.
This is our opportunity to change the world.
If you have a company or community that is stuck, let’s talk. I can help faster and easier than you can imagine.
Steve, as you know from our interview a few years ago, 98%-100% obtainable! I have seen great growth in a short period and have had stabilized occupancy for 5 + years at this level. It takes a focused effort on resident care and activities. A community finding success in low care staff turnover and focused resident satisfaction have experienced great gains!
Yes all of this.
Steve,
You are so right in your column about companies stressing profits over people. But that’s only part of the problem. It’s not just the money.
In my thirty years in the business, I’ve seen companies that don’t care much about residents make a lot of money. And I’ve seen companies that care tremendously lose their shirts. It’s complicated.
Of course, things like empowering employees, caring about the residents quality of life, and warm and inviting buildings are all important – but that should just be the floor, not the ceiling.
Remember, nine out of ten seniors who need care stay home – they aren’t in senior living. And there is a reason why.
The Boomers are going to change everything. They are not going to put up the current senior living system.
They hate the nursing homes built for their grandparents, and they aren’t crazy about assisted living built for their parents. They will want meaning in their lives, something they’ve yearned for since they were teenagers in the 60’s. For all the good people and good companies in senior living, and all the beautiful amenities we give them, the one thing missing in so many senior communities – is meaning. That’s why a lot of people stay away. It’s time for a new ceiling in the industry.
What you describe is very similar to the restaurant business. They can be very profitable but it is a constant balancing act, control costs, train staff, market right, price right. Create a great offering but not so great that it destroys the margin.