Call us Toll Free: (800) 719-4262
Senior Housing > Blog > skilled nursing

The Impact of the Election on Senior Housing

While there is still a lot up in the air regarding the results of the presidential election, several important initiatives passed at the state level that senior housing officials should be aware of. In numerous states throughout the country, there were initiatives on the ballot that carry the possibility of completely shaking up the senior housing industry. Many of these ballot points aimed to offer more support for the senior housing industry and long-term care facilities in general.

As with any new law or regulation, the implementation process can be a little tricky. Depending on the issue in question, many can feel uneasy about what is to come, no matter how beneficial it will be in the long run. This is why it is important to create an open forum for SNFs to discuss any new initiatives and ensure that everyone involved has a good understanding of what the potential regulation entails. With this in mind, some senior housing officials have taken it upon themselves to track the impact of new state legislatures. Some topics of industry interest in this year’s election included:

  • End-of-life issues
  • Medical marijuana
  • Minimum wage

All of these topics – and many others – have the potential to dramatically impact the senior housing industry. It is therefore important that those working in senior housing keep a watchful eye on various ballot measures – in both their state and others. With Colorado passing its assisted suicide bill this year, for example, we expect more states to follow.

What Changes Were Made?

In addition to big changes in Colorado with the “right to die” bill passing, a handful of other states passed legislation that those in senior housing should be aware of. Florida was successful (for two years in a row) in passing important laws related to continuing care communities. The state also elected several new officials who are interested in new construction and demographics in senior housing, which could impact future development plans.

Along with North Dakota and Arkansas, Florida also legalized medical marijuana on November 8th. California, Maine, Massachusetts, and Nevada all voted to legalize recreational marijuana, joining Colorado, Washington, Oregon, and Alaska. Both of this measures have the possibility of impacting senior living facilities, leaving it to the long-term communities to figure out how they would like to tackle marijuana treatment.

Colorado (as well as four other states) also voted to increase minimum wage, something that will undoubtedly impact the senior living industry.

On the national level, we are still unsure what is to come of the Affordable Care Act (ACA). We do, however, expect Medicaid providers to see changes in regards to reimbursement, but whether this will have a negative or positive affect on senior housing is yet to be seen.

Do you work in senior housing and have any input on how this election has impacted the industry? If so, we would love to hear from you.

Understanding the Evolving Senior Healthcare Model

At the recent NIC Spring Investment Forum there was a lot of talk surrounding the changing senior healthcare model, and what kind of an impact it will have on investors and those within the industry in general. One of the highlights of the forum was an open discussion amongst industry leaders about how the industry is changing, and what we are going to do about it. As anyone in the senior housing industry knows, things aren’t how they used to be when it comes to Skilled Nursing Facilities (SNF). As Baby Boomers enter into retirement, the overall landscape of senior care and their expectations will undoubtedly change. So, what does this mean for senior housing?

First, let’s go over a few of the main talking points from the NIC Spring Investment Forum on this subject:

  • The median age of nursing home residents is increasing
  • Residents have a higher level of acuity than ever before
  • Medicaid and Medicare will continue to play a role
  • Instead of a cost/benefit model, we are shifting towards a nonmedical “quality of life versus quality of care”
  • Quality and measures are at the center of this new model
  • SNFs need to shift their focus and work to provide more social and emotional resources for residents

These are just a handful of the topics that were discussed during that open forum, but they are all important when looking at the changing landscape of senior living. With those points in mind, let’s take a closer look at a few trends we are seeing in senior living today:

More and more people are looking to “age in place”

We expect to see continuing care retirement communities (CCRCs) become even more attractive to Baby Boomers and the likes in the coming years. This is due in large part to the fact that CCRC’s provide a high level of continuum care with a variety of options for residents, such as independent living, assisted living, and more.

Access to technology will be a must

While Baby Boomers are not as high-tech as the generations to follow, a large majority of them have turned to the dark side and have iPads, iPhones, laptops, tablets, and everything in-between. Because of this, SNFs will need to adjust accordingly. Furthermore, the wearable tech market for seniors is about to take off, which should also be a consideration for those in senior housing.

Senior co-housing will be a thing

The trend of today to “go green” will transfer over to senior housing, too, as many older Americans will find co-housing options attractive. Think of it as a cross between single-family homes and communal living arrangements, if you will.

Senior housing will “go green”

Along the same lines as the above point, we expect to see a trend of assisted living facilities “go green”, or adopt more eco-friendly practices, such as:

  • Improve indoor air quality
  • Make changes in an effort to meet water conservation measures
  • Weatherize buildings
  • Switch to renewable energy sources

We expect big things from 2016 in senior housing as Baby Boomers continue to enter into their retirement years and make waves in assisted living. For more information on topics discussed at the NIC Spring Investment Forum, or to discuss senior housing investment in general, please do not hesitate to contact the JCH Senior Housing Group.

Rosy Future For Healthcare Industry Is Bringing Everyone Into The Act

Senior Housing investors who are eager to fill the gap between supply and demand, expect to acquire more healthcare real estate as they look forward to growth through acquisition and development. Senior Living industry leaders see that the demand for senior housing is expected to grow as the population of older Americans is projected to double by 2050. That growth is sparking increased activity in the entire Healthcare market for Assisted living, independent living, Continuing care communities, Skilled Nursing facilities, and transitional post acute care facilities. The market for senior housing mergers and acquisitions continues to shatter records and expectations, making 2014 a landmark year for the Healthcare industry.

REITs, public and private equity firms and foreign investors are all competing for acquisition opportunities. According to statistics, more than 50%of the acquisitions are being completed by local and regional providers, 40% by publicly traded and national chains, and the rest by private equity and not-for-profit.  In 2013 non-traded REITs raised 20 billion in capital carving out their roles as significant players in senior housing figures. Non-traded REIT’s have raised approximately 11 billion year to date.   In 2014 the BIG THREE REIT’s have already acquired several billion dollar portfolio deals. Reported at the recent Chicago Nic Conference, the three REITs have been responsible for 7 billion of transactions year to date. A California based private equity firm is moving forward with plans to develop 750 million worth of new construction over the next three years for which it is enlisting foreign investors to help fund a portion of the pipeline.

The growing demand for Senior Housing includes seniors of varied financial capability. There is the demand for high end Assisted Living for the affluent, but there is also a growing need for low-to moderate income senior housing for those seniors with less financial resources. The gap in care offers the investor the opportunity to provide more affordable options not only for the 3.5 million seniors currently living below the poverty level, but also for the middle class Americans who are aging. Developers who formally sought inexpensive building sites, now are biting the head of the snake and building in highly regulated zoning areas like California and New York.

The future looks bright for the Healthcare Industry in the 21st century as we see increased investor interest in all types of Senior Housing. It is no longer viewed as an investment just in a singular property type, but as an accepted asset class in a “complex delivery of care”.

3 Main Reasons Why Skilled Nursing Homes File Chapter 11 Bankruptcy

When Nursing Homes File Chapter 11 Bankruptcy

There are three primary reasons a skilled nursing home ends up filing for Chapter 11 Bankruptcy. Although not the most ideal situation for the owners, the employees, and their patients, stringent federal and state requirements, fines, and lawsuits are hampering facilities’ ability to yield a profitable nursing home that can still afford skilled staffing needed for quality care.

Strict Federal and State Requirements

New guidelines enforced by the government are requiring skilled nursing homes to make mandatory regulation investments. These investments include updated training or new certifications for direct aides and staff. Direct aides are required to meet minimum educational hour regulations. Staff member requirements have been elevated as well. Failure to adhere to these regulations results in significant fines and fees.

Lawsuits and Claims

We recently reported on 19 skilled nursing facilities that filed Chapter 11 in California. Country Villa Service Corp’s claimed a need to file Chapter 11 on individual assets in order to seek protection from a number of class action lawsuits filed against them. The lawsuits range from poor quality care of their patients to medication misuse and missing wages and hours for employees.

Filing Chapter 11 on these specific locations freezes their assets, making them unavailable to the plaintiffs should they win their cases and staves off creditors temporarily. It does not, however, affect all of Country Villa Service Corp’s operational facilities. CEO Stephen Reissman claimed in his telephone interview that the bankruptcy won’t affect operations or treatment of patients at the company’s nursing homes in question, either.

Medicare Withholdings and Fines from CMS

Smaller nursing home corporations financially unable to separate their operational holdings from their business holdings are in a more precarious situation should lawsuits or fines arise. According to official reports, Medicare spent almost $32 billion on skilled nursing facilities in 2011 through their Nursing Home Quality Control Program. With the sequestration resulting from budget cuts in FY2013, many nursing homes are claiming they still haven’t received payments from the Centers for Medicare & Medicaid Services (CMS) as required. Coupling that with what some nursing home owners are claiming that they have received erroneous fines from CMS, and as a result they are forced to declare bankruptcy.

In Iowa, All-American Care owner, Jerry Rhoades, claims his locally-owned operation has to file bankruptcy in part because of all the fee injunctions CMS placed upon his business. CMS’s audits of the company yielded these results and fines nearing $100,000. Rhoades claims the fees have crippled their business and Chapter 11 was the only way out.

If you are considering filing Chapter 11 Bankruptcy, there may be other options available to you. Talk to a knowledgeable skilled nursing brokerage about these options. A reputable brokerage will have a large pool of qualified buyers and participants either in a 1031 Exchange, straight sale or sale and leaseback transaction. Check back frequently for more information on this, and related, subjects.