TRANSCRIPT 🔗
This is VERSED, powered by VIUM Capital, the podcast that brings you conversations with the leaders driving change in seniors housing and healthcare. I’m your host, Steve Kennedy, and together we’ll explore the insights, challenges, and solutions shaping our industry.
Steve 00:24
Welcome to another VERSED podcast. My name is Steve Kennedy, your host from VIUM Capital, and today we are with Dave Schless. Dave has been, as you likely know, the president and CEO of the American Senior Housing Association, really since its founding in 1991. And so we're very thankful that Dave can be with us today. There's a lot going on in the seniors housing industry from a regulatory perspective, from a development perspective, financing. And Dave is coming right in from a very successful ASHA mid-summer meeting in Colorado. So, Dave, thank you for joining the VERSED podcast.
Dave 01:09
Steve, it's a pleasure to be with you this morning. I look forward to chatting.
Steve 01:16
So, you know, I just mentioned that you're coming off the mid-summer meeting. I had spoken with a few of my colleagues who were there, just last evening, and they were commenting, you know, on overall, obviously a positive meeting, but signs of encouragement and optimism. And, give me your takeaways on some of the the top highlights of the mid-summer meeting.
Dave 01:43
I agree with your colleagues and I think all in all, there's an optimism, there's a positivity, that, of course, we went through some really challenging times. And so I think the operators, the owners are feeling more optimistic. I mean, obviously there's elements of uncertainty that are just part of where we are at this juncture in time. Some of it is capital markets for the operators that definitely the workforce immigration related issues, just the overall consumer, in times of kind of uncertainty, especially if you're on the IL side. So you've got all of those undercurrents, but on whole, I don't think there's any question. I think the senior housing business has a lot of reasons to be optimistic about this industry. And I think you could really kind of sense that over and over the course of the mid-year meeting that we just had out in Colorado.
Steve 03:06
Dave, you mentioned, you know, some there's tailwinds, but there's also headwinds. You mentioned immigration and and thinking about, we've had a change now, you know, for a few months in the federal administration, in our country. Immigration is talked about, and for independent living, especially assisted living, obviously, those are staffing heavy businesses, particularly as you become more acute into assisted living and memory care. Talk a little bit about immigration and staffing and how those potentially interplay.
Dave 03:43
So as you know, Steve, it's a really complicated issue from a policy perspective. And I will say this, you know, for ASHA, we’re up on the hill really every day of the week we're up on Capitol Hill. We work obviously on a bipartisan basis. And this issue has been for us front and center for a number of years. So it's just always been there, even though we know politically this is really hard. And it's really hard, by the way, on both sides of the aisle. So, I put that out there I think, you know for us on the policy side, obviously the securing of the border was always going to be, in order to get anything done that had to happen. And I think again, the optimist in me says, okay, we have resolved that issue, but obviously, we've seen signs of an effort perhaps by the administration to remove some of the folks who are here, some of whom are working and have been working in senior living communities for quite some time. So there's that element now is something we haven't really seen.
And that, of course, is true for any type of business, including senior housing. So that adds an element the, ICE enforcement in different settings is definitely very disconcerting. And that's out there. So, I mean I think for the operators and again, I would say this cuts across really IL, AL and continuing care. I mean, any of these positions where you've got kind of frontline staff, whether they're working in the kitchen, care giving housekeeping, maintenance…I mean, you have a workforce that includes some of these people that are very frightened by what they're seeing. And, so, that adds an element of distress probably for any of our operator members, really all across the country. And so that's kind of the backdrop. But I think for ASHA I mean, I would say again, on the positive side, I think over the years, we have seen and we've spent a lot of time on this issue on the Hill. Frankly, I think both Republicans and Democrats appreciate and realize that we have a workforce shortage, that we have jobs that Americans don't want. And that we really are going to have a crisis if we don't resolve this issue in a way that allows us to better access foreign born workers. And right now, for our space, we just don't fit into the category of the kind of the lower wage frontline workers just don't fit into an existing visa category. And so we've been very focused on that. Really anything we can do to increase the access to workers who want to work in these settings. We need them, they’re terrific workers. Just a really really challenging situation. And again, if you're any of our members at any given time, they're always looking for workers. And so, there's an uneasiness on the side of the operators.
Again, I'm an optimist by nature, so I have to be optimistic that by having secured the border, we have dealt with really the issue that has always kept if you went up to the Hill. Well, nothing's going to happen until the border is secure. Well, the Trump administration has come in, they've secured both the southern border as well as the northern border. Again, I'm not saying that I think we'll see anything happen quickly, but we just have to keep working the issue because it just doesn't go away. Americans are
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just not having enough kids. I mean, we've all kind of seen the data. I mean, the data is very clear.
Steve 08:58
Well, I appreciate you addressing that. And that's just one of the several complex issues that you're having to grapple with every day. And, I guess in that vein, you've been doing this since again, 1991. When you have that many complex issues, how do you sort of bubble up to the top, those issues that ASHA really wants to tackle? And then, of course, there's some other organizations that advocate on behalf of the senior housing and health care industry at large, from AHCA/NCAL and Argentum. How do you coordinate with those entities on some of the things that you want to achieve for ASHA membership?
Dave 09:43
At the national level, we talk on a regular basis. We have a biweekly call with AHCA/NCAL, Argentum, ASHA Leading Age, NIC…and so the dialog is there. All of these groups collaborate extensively on different issues where we all have similar interests and certainly workforce is one of those issues and we also work with broad coalitions of other businesses. We do a lot of work in different types of coalitions on different issues. I mean, for us, ASHA is a boutique association. So we're focused in a few areas. So federal policy research, consumer education and meetings. We're not day to day involved in state type issues. But we've also had to some extent, maybe a unique, we're looking maybe in some areas where the other groups aren't as focused. We have been very focused. For example, again, tax issues that are not necessarily sexy, not necessarily front and center for an AHCA/NCAL, but they're issues that have significant implications for owners of this type of real estate.
So what I’d say about ASHA is it's focused. It's a boutique. A lot of times what ends up happening, Steve, is that something will come up and I can tell you, like, right now, if we don't have kind of in-house expertise on the legal elements of providing guidance to our members, an ICE raid in your community. We're going to go out and we're going to find an attorney or a law firm that can help us help our members. And so that's kind of how we work. The advantage of an ASHA is to some extent it is not, there's no bureaucracy. So when something pops up, it doesn't take us a month to get consensus that we need to do it. And we have an executive committee of five. We have a board, but we're really nimble, and as soon as something pops up, and again, some of these things we will do with our Argentum, with NCAL, Leading Age. And we'll all say, hey, let's each kick in some money and just do this jointly. We've done that on many occasions on different issues. So, that's how it works.
Again, I'm not sure at the state level that the industry is as collaborative as it probably should be. That's me saying that without being in there day to day. But at the national level we have really good collaborative, open conversations and work really well. And obviously, I mean, even though I try not to think about the Covid era very much because I have like PTSD from it. But, I mean, the truth was there was nothing but just complete collaboration. And I think that's continued, which is again, there's very few things that I would say were positive of that period of time. That was one of the things that came out of that. And I think we're all better for having kind of gone through that, and seeing the value in making sure that we're all doing what we should be doing collectively to help the industry.
Steve 13:55
That's a good summary of sort of ASHA's place. I like that federally focused boutique able to quickly move on issues, and obviously a lot of institutional knowledge just based on how long ASHA's been around and leading. I, too, have PTSD. We launched VIUM on April Fool's Day of 2020. So it was right at the beginning. But you take away at probably in any business some silver linings of, if you can battle through adversity and kind of be forged in fire, there are some positive things that come out. One of the things you focused recently in some of your communication was highlighting ASHA's amicus brief in support of Silverado Senior Living. Can you comment on why that case was so important and what's at stake for broader senior housing?
Dave 14:49
This is a case that goes back to March of 2020, and it is uniquely damaging, unfortunate, really and horrific decision by the DA in Los Angeles to file criminal charges against a really outstanding organization tied to some of the Covid tragedies that took place. This all goes back to March of 2020. You think about it, I mean, nobody even understood how the disease was spread. Right? And that whole asymptomatic spread was unknown. These communities did the very best they did. They didn't have testing kits. They were scrambling to find PPE masks and things like that. And sometimes it was being confiscated and given to a hospital. So, I mean, the notion that you would file criminal charges, it's obscene. Not to dwell on my age, but, I've done this for a long time, and it's outrageous and is probably the single most egregious thing that I've ever been made aware of in the whole time that I've been involved in the business. And it has very significant ramifications. There's some technicalities of it. But I mean, the kind of overarching essence of it has to do with the compelled testimony of workers. If you're running a business like this, there's nothing but damage that comes from something like this because these people do the best they can day in, day out. Certainly that was the case in this circumstance. This case had been initially dismissed. And then the new D.A. decided to appeal so the amicus is really tied to the appeal. But just misguided beyond really almost beyond belief, to be honest with you.
Steve 17:09
For what it's worth, we as an organization really appreciated that brief. And it was a good example of ASHA not just standing by but speaking up and those kind of
strong voices in the industry are important not only for Silverado, but every owner, operator, and folks who want to get involved in this industry. We don't want that unhinged barrier of entry to good people being in our industry.
Dave 17:40
For us, that's where I, and the state, we have a legal committee that kind of we vet different issues and more often than not to the extent we're engaging in something at the state level, it's something like this that has implications beyond Silverado and the state of California. It had in our opinion, this has very broad based implications.
Steve 18:13
Another thing that you all are highlighting right now is the State of Seniors Housing Survey that's underway. And new independent living and assisted living financial study coming out soon. But what insights are you hoping to uncover this year that can help shape industry strategy?
Dave 18:33
Going way back, I mean, ASHA has always done research in different areas and the state of seniors housing was something that we initially started doing with what was Coopers & Lybrand/PWC back in the early 90s. It's probably close to 30 years old or maybe even older than 30 years now. So it's kind of this annual effort to try and collect revenue and expense data, performance data across the different types of senior housing. And in the past couple of years, we've kind of co-invested with Health Trust out of Sarasota, building kind of a modern data platform and that state of seniors housing, it's a work in progress. But what we're working towards is an online resource that will really be more timely and more informative to owners, operators, lenders, investors. The challenge with that survey is always getting people to participate. Obviously it's completely confidential. But we're excited about that because again, ASHA has done that also collaboratively with the various industry organizations,and we're getting close. We've done a lot of the hard work on the data platform side. So again you'll see that within the next couple of years that will become a much better resource than it has been historically.
The other state you mentioned is one that we're in the field with right now, and it's a study that we last did probably close to maybe 12, 13, 14 years ago. It's a study that needed to be revised. It's really just a financial survey of IL and AL residents. We're hoping to get enough of a sample to have an active adult piece as well. That's again one of those studies for us where there's always things in there that are helpful to us in understanding how do our residents actually pay for their independent living or their assisted living? And it just was kind of a time to do that. When we had done that initially, it was done kind of through, Boston College Center for Retirement Research. The predecessor was very academic. This one we're doing with ProMatura, who also had been involved in the predecessor. But this will not be an academic study. I mean, this will have more, I think it'll have more utility to decision makers in the industry and it'll be interesting to see. I mean, one of the things I'm interested in in that study is, like the use of long term care insurance, which is one of those things we don't think about that much in the context of senior housing. But, as that product, again, to say, dies off, someone could probably say that more eloquently than me. But that product has helped maybe 11% of the population was using some long term care insurance the last time we did that study. Ten years from now, 15 years from now, I mean, the product effectively doesn't really exist. I mean, it does technically exist, but this current generation is probably the last generation that's going to have that benefit and that benefit is a helpful benefit. So, I mean, those are the kinds of things that we're interested in learning by taking a snapshot right now of these residents' financial profiles.
Steve 22:51
I'm glad you highlighted the research component of ASHA as a lender and capital provider. That sort of data that is not anecdotal, but is robust and dependable and objective, it not only helps in underwriting transactions, but it also helps when we're raising capital with investors, especially investors, that is not a core commercial real estate asset class necessarily. It has become more core. But it's different than multifamily or other commercial asset classes. So the more data we have like that, it really helps sort of break down barriers of capital coming in. So we're appreciative of those efforts.
We always end with more of a personal question. And that is, is there a book or podcast that Dave Schless reads or listens to that you find insightful and would maybe recommend to anyone else?
Dave 23:57
The one that I'm going to recommend and actually, we were earlier talking about our mid-year meeting, so, for the past two years, and this is probably the first time we've ever done this. So the two consecutive mid-year meetings, we've had the same presenter and he's a clinical psychologist. His name is Eric Potterat. And Eric Potterat was retired as a commander in the US Navy. But he was really the person who developed the mental toughness curriculum for the Navy Seals. And he wrote a book that came out last year called Learned Excellence and Learned Excellence is a fascinating book. Eric Potterat has studied all of the research on performance and particularly performance under stress. And after he left the Navy again retired as a commander after 20 years. But he then did performance coaching for the Los Angeles Dodgers, the US women's national soccer team, Miami Heat, and US astronauts. And he's a fascinating guy. But Learned Excellence is a really interesting, insightful book because you've got all of these really interesting insights from a guy who has studied performance optimization over a long period of time. So that is the book I would highly recommend. It's probably in paperback now. It's been a bestseller. And I think he was saying to me, 11, maybe 11 countries, but it's a fabulous book. It’s Learned Excellence by Eric Potterat. You can find it on Amazon. I actually strongly recommend it, even if that's not the kind of book that you would ordinarily pick up and read. It's well-written and it's really fascinating, and it's applicable to kind of an ordinary person who hopefully will never find themselves in a situation that a Navy Seal might.
Steve 26:15
Well, Dave, thanks so much for your leadership to our industry for nearly 35 years. And you continue to do it in such a strong diplomatic, collaborative way. And we really appreciate you being a guest on VERSED. So thank you.
Dave 26:31
Well, I've enjoyed visiting with you. And I appreciate the opportunity to do this. And hopefully we'll do this again at some point in the not too distant future.
Steve 26:42
Thanks everyone for tuning in. This has been Dave Schless from ASHA, and this is Steve Kennedy signing off for another VERSED podcast. Have a wonderful day.
Outro
Thanks for tuning in to VERSED, powered by VIUM Capital. The conversation doesn’t stop here. Let us know what topics you want to hear and let’s make an impact in healthcare and seniors housing together. Till next time, I’m your host, Steve Kennedy, and this is VERSED.