The Fiscal Cliff and Beyond: What It All Means for Senior Living Providers


With senior living providers already dealing with increasing competition and an underperforming economy, the recent “fiscal cliff” drama added another element of uncertainty about the future.

In her article for, “Fiscal Cliff Deal’s Long-Term Impact on Seniors is Unpredictable”, author Anne-Marie Botek offers a synopsis of the key outcomes of the deal that temporarily alleviated the threat of an immediate recession while muddying the waters of the country’s financial future.

Fiscal Cliff Outcomes

No Americans, regardless of age or income, remained untouched by the agreement. And there are a few specific aspects of the deal that may impact caregivers and seniors over the coming months:

  • A mixed bag of tax cut extensions and hikes: The Bush-era tax cuts have been perpetually extended for individuals earning less than $400,000 and families earning less than $450,000. Another important tax policy—the 2011 payroll tax “holiday”—was allowed to expire. This means that most working Americans (about 77 percent) could see their taxes increase by at least two percent in 2013. People taking care of elderly relatives should educate themselves on the available tax breaks for family caregivers.
  • Cancelling the CLASS Act: The Community Living Assistance Services and Supports (CLASS) Act has been officially repealed. Part of the 2010 health care reform legislation, the CLASS Act was designed to create an affordable, government-run long-term care insurance program. However, its implementation was halted in 2011 after actuaries failed to find a financially viable way to provide the program. In its place, lawmakers have created a 15-person panel charged with recommending a viable way to provide high-quality, affordable long-term care to aging Americans.
  • Postponing automatic spending cuts: The sequestration cuts to government spending—which were supposed to be triggered in 2013 by the Budget Control Act of 2011—have been delayed for two months to give Congress additional time to come up with an alternative way to address the government’s huge and still climbing debt. The cuts were supposed to be applied to a host of government spending sources, including: entitlement programs, defense, financial student aid, and higher education.
  • Delaying the “doc fix:” The estimated 27 percent reduction in payments to doctors who accept Medicare patients has been postponed for a year. While this is good news for Medicare doctors and their patients, it marks yet another year that the government has failed to come up with an alternative to the costly Medicare Sustainable Growth Rate (SGR)—the formula used to determine Medicare physician reimbursement amounts.

Lawmakers will continue to negotiate in an effort to avoid smacking into the debt ceiling at the end of February. Ms. Botek concludes by saying, “For the foreseeable future, America’s fiscal outlook remains hazy.”

Implications for Senior Living Providers

Amid the uncertainty, what is clear for providers is they will continue to operate in a challenging environment. To remain successful, they must be “at the top of their game” in several vital areas, including:

  • Business Strategy — A solid strategic plan, implemented effectively, is a critical element for the success of any organization. Choosing the correct path for your organization in a dynamic, fast changing world is critically important.
  • Operational Performance Management and Efficiency — In a tight economy, organizational productivity and efficiency management are key foundations for success. Are your operating systems and processes functioning at optimal levels? A formal assessment, recommendation and revitalization process may be warranted.
  • Brand Building and Census Enhancement — Ultimately, the strength of your brand is at the very core of success, growth potential and long-term sustainability. Your brand is your greatest asset! Do customers see you the way you want to be seen? Are you growing your census in the right areas from a service demand and reimbursement perspective?
  • Marketing and Media Development — Making sure your messages are compelling, “on point” and directed to the correct target audiences are key elements of “best practice” marketing. Understanding the intricacies and nuances of the various media available today, including the strengths and limitations of each, is essential to making the correct media choices and stretching your media dollars.
  • Social Media Initiatives — Having a powerful online presence is no longer “optional.” Today, social marketing is one of the most visible and effective tools for interacting with customers, “telling your story” and presenting your organizations attributes, benefits and competitive advantages to those “shopping” for senior living services—usually female adult children…
  • Customer Satisfaction — Service excellence remains a key differentiator among providers and the principal driver of positive “word of mouth”. Delivering on your customers’ needs and preferences remains a staple of business success. And having a satisfied staff that feels valued is central to providing a successful service strategy.

For most senior living organizations, the best way to deal with our challenging and uncertain environment is to “double down” on the basics that have proven to be the bellwether essentials for success.

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