Within weeks, nursing homes that don’t require workers to be vaccinated against Covid-19 won’t be able to participate in Medicare or Medicaid, the Biden administration said in early August. Meanwhile, more of the largest private-pay senior housing owners and managers either are requiring or are in the process of mandating staff vaccinations.
About 39% of the senior housing organizations surveyed between July 22 and Aug. 8 said they “definitely” or “probably” will impose vaccine mandates, according to the National Investment Center for Seniors Housing & Care. That was up from 21% in the nonprofit center’s survey conducted the previous month.
“The senior living industry is leading corporate America in mandating vaccines,” said Adam Portnoy, chairman of Five Star Senior Living Inc., which operates about 150 facilities with 19,000 beds and has mandated that employees need to get their first shot by Sept. 1. Operators are under pressure to do this from prospective tenants and their families.
“We have no choice,” Mr. Portnoy said.
Still, implementing vaccine mandates promises to be a tough and costly move for companies that run thousands of U.S. senior communities offering levels of healthcare ranging from very little to skilled nursing. Like many U.S. businesses, they are facing labor shortages that are now being magnified by vaccine mandates.
The staff vaccination rate at nursing homes is 61.5%, according to the Centers for Medicare and Medicaid Services, only slightly better than the general population. After the Biden administration’s vaccine mandate announcement in early August, some operators predicted that staff departures could exceed 20%.
A study by the University of Pennsylvania of a skilled nursing facility in Philadelphia found that about 7% of its staff resigned after a vaccine mandate earlier this year. Mr. Portnoy said that Five Star’s exit rate was roughly about the same.
All respondents to the National Investment Center’s most recent survey said they already were experiencing staffing shortages. “The bad thing [about vaccine mandates] is that if you lose people you’re going to have even more significant staff shortages,” said Beth Mace, the center’s chief economist.
The senior housing industry already has been put in a financial squeeze by the pandemic. Admissions fell sharply in the early months when facilities were in lockdown mode and prospective residents and their families were concerned about news reports of high death rates at nursing homes. Costs have been driven higher by overtime, new safety protocols and, now, the need to pay staff more.
In recent months, admissions have been improving, thanks largely to the success of vaccines, which also have been effective against the new Delta variant. In July, occupancy growth at Brookdale Senior Living Inc., which has more than 685 communities in 41 states, was almost equal to the entire second quarter, according to Cindy Baier, chief executive.
But occupancy for the industry remains below what it was before the pandemic. At Brookdale it was 73.3% at the end of July, compared with 82.2% at the end of March 2020.
Industry executives are optimistic occupancy will continue to grow. Demand will likely increase in the short term as caregivers who had been taking care of family members at home return to offices. Longer term, facilities will see a surge of new tenants as baby boomers age, they say.
New supply, which was an industry concern before the pandemic hit, also is easing. About 41,000 new units will be added annually between 2020 and 2022, compared with 51,000 between 2017 and 2019, according to Green Street, a real-estate analytics firm.
Industry participants say they think the staff shortage may be short-lived. Some say they have already seen benefits to vaccine mandates. “We have seen an increase in applicants for open positions now that we have a vaccine requirement on the posting,” Ms. Baier said.
But many industry participants also acknowledge that the future remains cloudy. “All we’re giving you is guesses,” Mr. Portnoy of Five Star said. “Nobody in the industry has lived through anything like this.”