Brookdale Senior Living Inc. (NYSE:BKD) Q1 2024 Earnings Call Transcript

And last year, we enhanced the Executive Director job description to make sure that they were focused on driving sales in addition to providing good quality care to our existing residents and focus on their satisfaction. The second thing that we’ve made just great progress on is retaining our associates. Now, we know that when an Executive Director has been in place at least 2 years, that community has better profitability. And we also know that we’ve got stability in our leadership team that translates into stability of the community hourly associates. And the stability is important because our teams build relationships with the residents. In addition, when they’ve been in position a long time, they’re more effective at serving the residents. And so that translates into higher resident satisfaction, which is our third priority of providing residents — earning resident and family trust by providing valued, high-quality services.

The reason that is important is when you’ve residents, who are happy with the care that you’re providing, they want their friends to live with them, and they’ve a longer length of stay. So that helps you build occupancy in the communities. So what I can say is we’ve had a playbook that is working quite effectively. I think that we’re going to continue to sort of drill down on the training that we did last year on the Brookdale Way. We’re pleased with our progress, but we’ve a long way to go in terms of getting back to pre-pandemic occupancy and margins and beyond. And that’s why it’s such an exciting time to enter Brookdale stock, because we’ve demonstrated that we can execute our plan successfully. And at the same time, there’s still a lot of opportunity in front of us, backed by strong supply and demand fundamentals.

And you’ll continue to see us roll out Brookdale HealthPlus, because we’re just so far ahead of the industry in terms of our ability to participate in value-based care and to really provide a differentiated experience on the clinical side for our residents.

Dawn Kussow: And Joanna, this is Dawn. What I’d…..

Lucinda Baier: Go ahead.

Dawn Kussow: What I’d point back to as well, just adding on to what Cindy said, is Slide 24 and 25 in our Investor presentation, where we laid out our pre-pandemic operating margins. We’re nearing, as Cindy had said in our prepared remarks, we’re over our 2019 on a per unit basis operating margin. But you can see how close we’re to those pre-pandemic operating margins and then just the runway that we’ve from an occupancy standpoint and how excited we’re about that.

Joanna Gajuk: Yes, exactly. That’s what I was referring to. And since Cindy, you mentioned HealthPlus program line, and it was on my list too in terms of the roll-up. So I don’t remember — have you guys talked about like how many communities, I guess, currently have it in place? And I guess what are the plans in terms of the rollout, like how aggressive you’re in terms of sort of planting those seeds in — across the portfolio?

Lucinda Baier: Sure, today, Brookdale HealthPlus is in close to 50 communities, and our goal is to have it in 130 communities by year-end. One of the things that we think about with regard to the rollout is we’re scaling a clinical program that involves changing every single aspect of community operations. So we want to move quickly, but we also want to move carefully to make sure that we’re able to appropriately source RN Care Managers, who can help us with that, that we’re able to train our people so that the HealthPlus communities operate effectively.

And we’re excited about the fact that by year-end, we’ll be at 130 communities. And again, I couldn’t be more excited about the fact that our industry trade association, Argentum, recognized Brookdale HealthPlus as one of the Best of the Best programs. And that just is a testament to how far we’re ahead of the industry in this area.

Operator: [Operator Instructions] And our next question today is from the line of Josh Raskin of Nephron Research.

Joshua Raskin: Maybe just taking a step back, if you could speak about your development plans, I guess, both sort of short or intermediate term and then the long term. And I’m specifically interested in how you’re thinking about changing populations and state demographics and things like that. I’m curious also, as we’ve seen a big ramp in home-based health care services, are you seeing any impact from that on demand or individuals able to live at home longer in specific areas?

Lucinda Baier: Good question, Josh. We currently don’t have a lot of development plans at Brookdale. We’re very focused on winning the recovery with our existing portfolio. As we think about what the right answer is, we’re very focused on serving residents in their homes, which are our communities. And we think that Brookdale HealthPlus and adding health care into our communities is the right answer. One of the things that you may or may not know is that we’ve physicians and nurse practitioners, who are around in many of our communities. And so our residents are able to get health care services right at home. We’re continuing to look to see what additional health care services could be provided by third parties in our communities. I think you probably know that historically, we’ve had home health and hospice within our communities.

We’re continuously focusing on the quality of the programs within our communities, whether that is quality dining and nutrition, whether that is our resident social engagement, whether that’s the whole life setting without the burdens of homeownership, but most particularly health and wellness. And what you’ll see over the longer term, though, is we’ll look to increase the density in the markets, where we think there’s growth and where we’ve got a strong presence.

Joshua Raskin: Yes, I’m sorry. I’ve misspoken the word development. I meant more of a… go ahead, sorry.