COVID-19 is a viral disease that’s also been referred to as the ‘coronavirus.’ It has spread worldwide, and it’s caught attention from the senior living sectors. Affinity Living Group (NYSE: ALG) and Brookdale (BKD) have begun preparing for a worst-case scenario.
Although Affinity and Brookdale are larger companies, smaller providers may experience a harder scenario if the coronavirus spreads within their communities. Also, the stock market decline caused by fear, and the uncertainty has not spared the senior living-related stocks. The sector could experience a hard hit.
The virus has spread all over China and worldwide to at least 47 other countries and regions. There have been more than 82,000 positive cases with 2,800 dead worldwide, and continuing to increase. These numbers include the United States, with 60 reported cases, according to the Centers for Disease Control and Prevention (CDC) and the U.S. Department of Health and Human Services (HHS). It is not clear yet if COVID-19 is spreading throughout any specific communities in the U.S., evidence has provided the first instance of “community transmission” has occurred in California.
These facts have many of the largest senior living providers across the nation on high-alert. Including Affinity (North Carolina), Brookdale and Hickory (Tennessee), and Brentwood – because seniors are expected to have higher risks of developing severe complications from the coronavirus. However, there have not been any effects at this time. Still, providers are taking measures to prevent the spread, or at least delaying it if an outbreak should occur.
“I am very concerned about the population we serve and its impact on the workforce. We are very vigilant about this,” said Dr. Kevin O’Neil, ALG Medical Director. The spread of the virus has also brought a heavy price to the U.S. stock market. World stocks fell for the sixth consecutive day on Thursday. Analysts at Green Street Advisors and RBC Capital Markets said REIT high-rise housing stocks have also been hit recently.
Green Street reported to investors that, “real estate investment trusts for senior housing have been affected more than usual, as the virus will have a disproportionate effect on seniors.” According to the Global RBC Capital Market Coronavirus Guidelines, if the virus is active on or near its property, REITs used for elderly housing and medical services may be forced to take specific measures, including quarantine.
The February 27 report told investors: “If COVID-19 has a significant impact on the elderly, healthcare real estate investment trusts with large numbers of homes could be under pressure. Additionally, if the virus becomes a problem, it could affect Existing residents in these facilities.” The senior living industry has been isolated for other diseases in the past, such as influenza and pneumonia. However, the virulence of coronavirus and the potential to infect the elderly service workers make this situation challenging.
Although this is not yet defined, widespread and uncontrollable infections may affect the viability of some smaller alive operators, especially when front-line caregivers are heavily infected with the disease. Moreover, if new patients suddenly attack the hospital, the affected residents may have nowhere to go, which exacerbates the problem.
“I think the impact could be devastating,” O’Neill said. “That’s why I think it’s so important that we have to take these infection control measures now actively.”
Coronavirus has stirred up preparations for some of the country’s largest elderly living companies. In Brookdale, the country’s largest provider of senior housing, key leaders are “focused” on developing an action plan. The company has developed precautionary measures based on the CDC’s current recommendations to provide employers and companies with guidance on controlling the spread of the virus.
Brookdale explained in a statement, “We have policies and procedures and checklists for situations in the community. For precautions, these preparations take into account possible staffing, visitor agreements, and The impact of supply-demand.“
ALG also follows CDC guidelines and has taken some other steps. Providers plan to start asking if their employees have traveled abroad last month or have contacted people. In addition to standard handwashing and hygiene precautions, the company also instructed its employees to stay home when they have a fever, cough, or runny nose. In addition, ALG has posted signs and notifications about coronavirus in all communities.
To prepare for a more extensive outbreak, the operator has convened an interdisciplinary committee composed of heads of various departments. The committee includes leaders of its human resources, operations, facility management, I.T., and finance teams. The committee will ensure that the company is provided with sufficient emergency supplies and is fully prepared for any emergencies.
Despite concerns, O’Neill is still working on a vaccine against the coronavirus. Although it may take months or even more than a year to mass-produce it for public use, O’Neill is encouraged that he can do it.
In the end, he believes that if the entire industry works together, preparing now can help defend against the worst follow-up results. His advice to other elderly service providers is to be vigilant, follow CDC guidelines, and maintain close contact with local health officials. “We don’t want to create panic,” O’Neill said. “But we want a sense of urgency that the timing of preparation is not imminent.”
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