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NIC survey finds CEOs 'cautiously optimistic'.

Industry relatively stable despite staffing shortages

A SURVEY CONDUCTED BY THE WASHINGTON DC-based National Investment Center for the Seniors Housing & Care Industries (NIC) shows that many operating-company CEOs are "cautiously optimistic" about the future and expect revenues and earnings to expand.

The "Survey of Seniors Housing & Care CEOs" was undertaken by NIC in conjunction with the American Seniors Housing Association (ASHA) as a supplement to ASHA's "State of Seniors Housing" report. Participants were asked to comment on issues such as capital formation, industry operating benchmarks, current strategies, and employment outlook. According to NIC, the survey was sent to CEOs drawn from existing rosters of industry leaders, including CLTC's 50-Plus lists. Of the 120 CEOs asked, 40 responded to the survey.

"In terms of a sample size for a CEO survey, this is fairly large for this industry," says Robert G. Kramer, executive director of NIC. "It does not pretend to represent all operators--it is a survey of major operating companies. We think that's of greatest interest to our audience, which is the investment community."

The participating CEOs see the current state of the industry as being relatively stable, based on factors such as occupancy levels and move-in rates. Major challenges cited include capital formation and staff shortages. Nearly two thirds of the CEOs said that the availability of debt financing for new construction was poor or fair, with the outlook for debt financing for acquisitions slightly better.

"Many lenders are less interested in funding new construction until they are satisfied with an operator's track record in existing facilities," says Kramer. "There is still construction financing for good operators. Companies like EdenCare Senior Living and Sunrise Assisted Living are still opening multiple new properties."

High turnover and staff shortages

The survey also revealed a 73 percent annual turnover rate for nursing aides, and nearly three quarters of the CEOs reported a significant facility-level staff shortage.

"Attracting, retaining, and minimizing the turnover of direct caregivers is probably going to be the greatest challenge, particularly when you look at the projected growth in the elderly population," says Michael Levitt, vice president of Tutera Healthcare Services, Kansas City, Mo. "On the nursing-home side, we must have cooperation from the federal and state governments to recognize that the cost of caring for the frail elderly is going to increase."

All too often, frontline care workers are defecting to fast-food chains, where they can make roughly the same amount of money.

"When your biggest competitor is fast-food restaurants, something's wrong," says Sheldon Goldberg, president and CEO of the Jewish Home and Hospital in New York. "To me, caring for a frail, elderly person is much more important than working in fast food. There's a need to look very closely at how we staff nursing homes and how we compensate people."

The 32-page "Survey of Seniors Housing & Care CEOs" is available through NIC for $45.
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Publication:Contemporary Long Term Care
Date:Nov 1, 2000
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