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Senior Care in 2016: Mega Mergers, Staffing Shortages & Tech Adoption

January 20, 2016 | Mark Woodka


The past year was a busy one for senior living providers. And while business is booming for many, there are some serious challenges that lie ahead when it comes to staffing for organizations large and small.

Here are my three bold predictions for the coming year, and how your business can begin to anticipate and address these challenges head on. (For those keeping score at home, check out last year's predictions here.)

#1 — More megamergers are on the way.

The megamerger won’t just be an assisted living phenomenon anymore. Expect that this year it will expand into skilled nursing, as well.senior-care-2016.jpg

For those on the acquisition side, they are making acquisitions to leverage economies of scale. The biggest example, of course, is the Emeritus-Brookdale merger that took place in 2014. Expect to see even more of these types of acquisitions.

The impact to the smaller providers is that it becomes a lot harder to compete. The challenge then to those smaller providers is: how do you differentiate yourself from a big, monolithic chain? You may need to have a pricing advantage or some other edge. It’s tough to compete against the behemoth, and there are going to be a lot of them.

One way providers can respond is through partnerships and other efficiencies. We have seen examples where a senior living community fitness center may be turned into a gym that family members or adult children can also use. A community can sell prepared meals out of its cafeteria so that adult children visiting on their way home can pick up dinner.

It won’t be easy, but smaller providers will learn to develop their competitive edge.

#2 — The staffing shortage will take hold.

This will be one of the most significant operational challenges in 2016, and beyond—for the next decade or so.

Projections show we will need 2.5 million more caregivers between now and 2030. This shortage arrived in late 2015, and we will really feel the impact in 2016. Unfortunately, this gets worse before it gets better over the course of the next 10 years.

Providers are not prepared for this. They have seen it coming, but they are not ready. Wage pressure is one part of the issue, with minimum wage discussions having the potential to make a very significant impact in the short run. Expect them to continue.

Additionally, unemployment is very low, and there are not many people currently looking for work. And while efforts are under way to improve this, as an industry, we haven’t painted the picture that senior living as a great place to work.

Part of the challenge is that with greater employment, people have options. Millennials are looking for rapid career advancement, and our industry is not aligned to handle that pressure.

Providers need to interact with different generations differently. Millennials want more constant feedback, and they are not identified by what they do. Our industry is actually a great fit for millennials who want their work to have greater meaning, by providing quality of life for seniors.

#3 — Technology will receive significant investment to change care delivery models.

A big example of this is telehealth, which is receiving attention as a means to alleviate the caregiver shortage (see Prediction #2 above). Much of the attention is being applied to home health, but what’s behind that is the need for a way to be more efficient and effective in delivering care, in general.

Providers are going to have to invest in technology-enabled solutions to improve efficiencies. This might be remote monitoring technology in some settings. In assisted living, for example, how do you prioritize five call buttons being hit at the same time? One might be an urgent need, like a fall, versus someone who wants assistance moving to another room.

The technology solutions can detect the pressure points. We have to get to the point where tasks are prioritized based on the greatest need, and then identify the best resource to cover that need.

This is a challenge because of who we are, but it’s also a huge opportunity. We can’t solve the caregiver shortage just by finding more people to provide care. We also need to decrease the requirement for more people.

The outlook for 2016 isn’t all bad, but we have to see our challenges as opportunities and work as an industry to evolve through this time of change.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net 

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About Mark Woodka

Mark Woodka is CEO of OnShift and has over 25 years of experience in enterprise software sales and marketing, having worked for startup organizations as well as Fortune 500 companies. He often leverages his extensive background in technology-enabled process improvements speaking at industry conferences as well as authoring articles on long-term care trends and issues.

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