2024 Outlook: Meeting the Challenges That Lie Ahead
What an exciting time to be part of things that are happening here at Morningstar Living! I am happy to announce the Affiliation between Morningstar Living and Moravian Manor Communities was finalized on November 1, 2023. You may not know, the idea to affiliate began years ago, prior to COVID-19, when former Morningstar Living President & CEO, Susan (Sue) Cooper Drabic, approached me about her vision for Morningstar Living and Moravian Manor Communities to affiliate. Her thinking was that it would become increasingly more difficult for individual, stand-alone senior communities, like Morningstar Living and Moravian Manor Communities, to weather the challenges that lie ahead for organizations that provide healthcare services. Uniquely, Morningstar Living’s business model as a developer, owner, and operator of Life Plan Communities provides senior services in three different service sectors…Housing, Hospitality, and Healthcare. These 3H’s are Morningstar Living’s ministries. So, as I think about older adults who are planning for their retirement now, it has never been more important to develop a plan that includes future healthcare services.
To set the stage, did you know our country is on the cusp of an explosion in the population of seniors…thanks to the baby boomers, the generation of people born between 1946 and 1964? By 2050, twenty percent of Americans will be 65 years or older. For Morningstar Living…that is great news because our business revolves around our customers, who just happen to be people over the age of sixty. But as the boomer population ages, the demand for healthcare services will increase, which will cause healthcare costs and expenses to rise. Our first challenge is the pressure from state and federal insurance entities to reduce healthcare costs, without receiving equal reimbursement for the services we provide. Quality measurements that calculate the number of healthcare professionals who provide direct care to seniors are now being used to determine the amount of reimbursement private, federal, and state insurance entities will pay, despite the true cost of care healthcare organizations provide.
The second challenge that directly impacts the first challenge is the healthcare workforce shortage. Since the COVID-19 pandemic, the healthcare industry has experienced an increasing shortage of skilled and qualified health professionals. Without a sufficient workforce of healthcare professionals, it is near impossible to reach and maintain the required staffing levels that determine insurance reimbursement. This is a catch-22 for healthcare organizations that need to increase caregiver compensation and at the same time, continuously recruit, hire, and train healthcare workers to reach required staffing levels. All of this creates tremendous financial strain on healthcare providers. In fact, over 600 nursing homes in our country closed this year because they could not absorb these added expenses.
The third challenge is fueled by the second challenge. With nursing homes closing throughout the country, and many more predicted to follow suit in 2024, there will be fewer facilities to provide healthcare services for the tsunami of seniors that is on its way. If you are a Morningstar Living resident living at one of our Life Plan Communities, Moravian Hall Square or Heritage Village, your future healthcare services are secured. But if you have not yet secured residency in a Life Plan Community, you may want to do it soon. A Life Plan Community is the only retirement solution that makes it possible for retirees to secure the future healthcare services they will need as they age.
As 2023 ends, I invite you to follow our journey throughout 2024. I know the healthcare challenges we face will make us a stronger organization. And I have never been more excited about the work we do to provide the best in Housing, Hospitality, and Healthcare services for the customers we serve.
