Debriefing the AgeTech NYC Senior Living Operator Survey

A few months ago, I announced the AgeTech NYC Senior Living Operator Survey. In that post, I hinted at some of the early learnings; today, please join me in diving deep into my findings about the challenges facing senior living operators, as gathered from the AgeTech NYC Senior Living Operator Survey.

— Sarah Richard

P.S. - If you’re an AgeTech founder, investor, or operator based in the NYC area, please consider joining us at January’s AgeTech NYC Fireside Chat. More details to come!

How did I conduct the AgeTech NYC Senior Living Operator Survey?

From outreach to >590 select operators, I spoke with >25 communities over the course of ~6 weeks. Participating communities spanned non-profit to for-profit; Assisted Living/Memory Care to Skilled Nursing and Continuing Care Retirement Communities (CCRC); from individual communities to multi-site and multi-state operators.

I spoke folks ranging from C-suite (CEO, CIO, COO, CMO, etc.) to frontline staff (RNs, CNAs); Administrators to Directors (Activities, IT, etc). In many cases, I spoke with several people at a given community, and frequently scheduled several calls with each participant.

In these conversations, I asked participants a fairly open-ended question: what’s keeping you up at night? I dove into some followup questions to better understand their responses:

1. How do you know this is a problem?

2. How will you know when you’ve solved the problem?

3. What have you tried to solve the problem so far - how has that gone?

4. On a scale 1-10 how painful is his challenge?

I followed up my survey to validate what I learned by speaking with a variety of organizations with broader visibility - including trade associations (local + national); consultants; lawyers; and insurance companies and brokers.

After all of that research…

What did I learn from the AgeTech NYC Senior Living Operator Survey?

Initial discussions with a couple of the industry-leading operators revealed some key pain points:

1. Staff Turnover: Operators throughout the continuum of care (from independent living through memory care and skilled nursing) are struggling with staff retention, leading to significant recruiting costs and heavy (95+% of headcount) reliance on expensive agency staff.

2. Care Planning & Acuity: Understanding resident acuity is crucial for creating and executing effective care plans, but operators struggle to ensure care plan adherence and avoid unnecessary risk.

3. Legal Risk: Reconciling both resident and vendor requirements (and ensuring regulatory compliance) presents a significant financial and operational burden.

Behind every concern simmered underlying fear about the risk of “getting it wrong.”

Compliance risk is top of mind

Navigating compliance is a high-stakes challenge for senior living operators, impacting financial sustainability, legal standing, and, ultimately, resident care. As regulations evolve rapidly—updating as frequently as monthly—communities find themselves buried in literal paperwork.

As an example, here in New York an Assisted Living operator faces many challenges:

1. Regulations change frequently

Regulatory requirements vary by jurisdiction (state, local, and federal), and are codified by the Department of Health (e.g., Title X in New York), and updated on a near-monthly cadence (e.g., “Dear Administrator Letters” in New York). 

2. Staff changes frequently

Staff retention in senior living is low (65+% YoY churn). The cost to replace a senior living employee is estimated between $3500-$5000 each. But the replacement cost pales in comparison to the liability risk introduced: when staff changes frequently and average staff tenure is low, facilities risk low institutional knowledge of facility policies and procedures. 

3. Non-compliance is costly

A single noncompliant “tag” (e.g., opioids stored in the same room as fentanyl) found during a regulatory survey may cost a community $10,000 per day until documented resolution. My Senior Living Operator interviews indicate that operators expect up to 15-20 penalties in an annual survey. More significantly, though, follow-on lawsuits ($1M+ class action lawsuits) open the door to a true cost in the millions in reputational impact on recruiting and sales. 

How do operators reduce compliance risk?

Today, operators are mitigating compliance risk in very operationally intensive and expensive ways (pen-and-paper checklists; outsourced compliance support). Operators may spend $200K-$300K/year on compliance support to help them wade through regulatory requirements, in the form of in-house FTEs, compliance consultants, and/or trade associations (e.g., Empire State Association of Assisted Living in New York).

If, like me, you’re left feeling like there must be a better way… stay tuned!