At a time when workers across all industries are re-evaluating their careers, what some have coined “the great resignation”, Sabra Health Care REIT Chief Investment Officer Talya Nevo-Hacohen believes simply increasing wages is not the answer — especially in the health care field.
“It’s not just simply the economics of pay rates, it’s more complex than that,” Nevo-Hacohen told Skilled Nursing News. “I think we’re seeing these issues throughout the labor pool. Sure it’s pay rate but it’s also flexibility and it’s environment and it’s recognition for contributions. So there are some cultural pieces and we don’t directly impact that … all operators I think are aware of this.”
She said Sabra has seen its operator tenants find ways to create more flexible scheduling or provide additional services for its employees like child care to further support staff.
“We’ve seen operators do things like instead of having someone needing to go to get a payday loan the operator themselves will essentially advance the person the funds. They’re the ones most in control of it and they don’t have to take a fee on it, because they’re not making money on it,” she said.
“That’s actually a perk to make sure that people are able to continue working and aren’t under duress by situations that arise,” Nevo-Hacohen added.
During its third-quarter earnings call on Nov. 4, Sabra announced occupancy increases across its portfolio, but the real estate investment trust fell short of industry expectations as its rent revenues declined from $100.6 million in the third quarter of 2020 to $85.4 million a year later.
Sabra CEO Rick Matros during the call attributed staff shortages as one reason why rent revenues declined, though he noted the problem is impacting each operator differently, depending on the market.
Sabra’s greatest ability, Nevo-Hacohen said, is to help its operators be familiar with the best practices the REIT is seeing.
Nevo-Hacohen spoke with SNN last month to discuss the industry workforce, among other topics. Excerpts from the conversation, edited for length and clarity, are below.
What do you think are the best practices?
Well I mentioned a couple of them but frankly it’s too soon to tell what’s really going to get people to commit to jobs. It’s not just a challenge of nursing homes frankly. This is a challenge throughout our labor pool that everyone has had a thesis about the reason why so many people have taken themselves out of the labor pool and/or the great resignation. But it’s not specific to health care by any means.
One of the big issues, even this is not specific to health care, is burnout. Working through COVID for a long period of time, coming on to almost two years now, it was scary and it was intense and people who worked in health care were in the line of fire without having the ability to really assess what the risk was, and they were really in a war with an unseen enemy. I use that analogy intentionally.
I think that the hardest part to overcome is burnout, and that is more specific to health care workers than other groups like lodging and even retail. All those groups had risk but not the same level of risk.
What are your thoughts on the need to keep skilled nursing and long-term care in the sights of the federal government, especially as provider relief funds dry up and wrap up?
I think that the long-term care industry does a remarkably good job of staying in front of the government at all times. The truth is the people who are living in long-term care or are in skilled nursing need access to around the clock care, and supervision and oversight. They are not individuals who are able to be visited a couple of times a day or a few times a day even.
So having said that … I think long-term care and skilled nursing does remain a component of infrastructure in this country. Maybe that’s little ‘I’ infrastructure as opposed to capital ‘I’ infrastructure that is used right now in Congress. It is a critical component of our society and ultimately what really government provides access to because regardless of what you think about who owns nursing homes and who operates them, the fact is that the bulk of their revenue comes from federal and state funding. So the top line is driven largely by government funding which means that is how most people access that kind of care.
What are some goals Sabra has for 2022 on the investing side and are you still planning to stay relatively on the sidelines and not as involved with skilled nursing at this point?
… We’re going to remain opportunistic and we’re not going to turn away from a skilled nursing deal if it’s a good deal. We will continue to do deals that make strategic and economic sense for the company. We have seen mostly senior housing and some behavioral deals this year; we’ve seen very little in the skilled nursing space and we thought we would see them start to emerge in the latter part of 2021 and I think with the Delta variant that’s really pushed things off into 2022. We’re trying to be smart and deploy capital shrewdly in these times.
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