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What’s ahead for the senior living industry in 2009?

Posted Jan 07 2009 5:08pm
StocksFalling The current price for a share of Sunrise Senior Living stock is $1.75. That’s down 83% in the past three months; more than 90% for the year overall.

Assisted Living Concepts (ALC) dropped 30% of their value in 2008; Capital Senior Living lost nearly 50% of value; Brookdale (BKD) lost 74%; and Five Star Quality Care lost nearly 65% of value; Emeritus (ESC) lost 53%.

Sunwest Management, one of the largest operators of senior living communities nationwide, is currently trying to reorganize, liquidate and, somehow survive. On December 31, 2008, the CEO of the company, Jon Harder, filed for personal bankruptcy. Private investors nationwide, many of them individuals who invested their life savings in what looked like a good thing, face the prospect of losing everything. Regulators are watching Sunwest properties closely as well, making ongoing management and operations an incredible challenge.

We’re in a society that is rapidly aging. More and more individuals are requiring care and the need will grow dramatically in the coming year.

And yet some of the companies dedicated to caring for them are on the brink of failure.

It was a bad year in the economy – no one will argue that. But senior living stocks fell much, much further than the S & P 500.

The housing slump has made voluntary moves into senior living communities drop off, as seniors, ready to make the move, are unable to sell their homes. The Dec. 21 news article in The Philadelphia Inquirer ( Housing slump has some seniors uncertain ) notes that this housing problem has led to many individuals delaying their move to pricey retirement communities, and even more need-driven assisted living communities.

The credit crunch has certainly contributed, as many senior care communities depended on continually developing new properties to boost their revenues overall.

What’s ahead for 2009?

Clearly, investors and operators alike will need to watch carefully, as the economic outlook remains shaky for this year ahead.

But the prudent operator will also need to consider these points:

People: It’s always about the people – those providing the service, and those receiving it. 2009 is a year to focus on what the senior care provider does to attract the best, train and equip everyone to do their best, and then retain them. It’s a year to implement all those great ideas for engaging employees – at every level of the business. This year, wise investments may not be focused on building or acquiring new properties, but rather on building up the people who provide your core service. We know what engaged employees can do for the bottom line; this year it’s time to truly engage them and achieve those results.

Leadership: It’s still a people-focused area, but one that needs microscopic attention this year. Corporate philosophy is great, but carrying that out to the hands’ on folks requires strong, capable leadership. One of the challenges for any rapidly-growing senior care company is finding enough trained, experienced managers in this relatively new industry. Developing programs to groom leaders in-house can also help engage and energize new employees who see possibilities for growth and advancement within the company.

Innovation: The smart senior care operator will look for ways, in 2009, to reach out to more individuals in the community without adding more overhead or taking on new debt. Providing care in seniors’ homes, offering day care, and looking for ways to incorporate technology should be areas to consider this year. Offering classes to seniors in the community at large in key areas of diet, fitness and memory may introduce more people to the company, and may even provide additional revenue streams.

Technology: It’s a great year to make sure that technology is being appropriately, effectively used throughout the company. Company websites need to be updated and interactive, as more and more seniors – and their families – search, interact, and learn from web sources. Community operations, education and training, and other services can be streamlined and made much more effective and efficient through use of widely available technology. For many companies, the ability to monitor revenue, census, compliance and other key aspects of operations – at the click of the mouse – makes investing in these programs invaluable.

One thing is certain: the year ahead will be interesting. It should be a great year to be a senior living operator, especially with attention to the finer points of management. CEUs for senior care professionals · Staff training for caregivers · Caregiver job applications right to your inbox
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