I spent a fair amount of time on the phone with some high level Brookdale folks chatting about why they think I am missing the point in the article I published yesterday.

By Steve Moran

I will be honest. I hated writing the article I published yesterday about Brookdale because there are a bunch of Brookdale folks who are readers. And I have gotten to know a number of people on the senior management team and I like them a bunch . . . even if they won’t put me on their board. (Yes, I am obsessed by this idea because I think I could make a hugely impactful difference.)  

Likely to their credit more than mine, we have a really great relationship because at the end of the day I only want the very best for them. I want them to be crazy successful. I want them to be at 98% occupancy across the enterprise. I want them to set the standard for the rest of us.

But . . . it would have been irresponsible for me to not write what I wrote.

The Brookdale View

I spent a fair amount of time on the phone with some high level Brookdale folks — just for clarification purposes, not Andy Smith — chatting about why they think I am missing the point. Here is their thinking . . .

  • In the first draft of yesterday’s article I said that through the August 1, 2016 earnings call they were still blaming the Emeritus merger for their problems. They challenged this statement and they were correct. The last time the merger was mentioned in relation to difficulties in any way was on the February 9, 2016 call.

  • They feel very strongly that even though they have talked about merger difficulties, they have been mindful of not disparaging current and former employees who were with Emeritus.

  • They do acknowledge that they are still grappling with a turnover problem and that it is impacting them in a number of ways, but that their data shows things are getting much better.

  • Brookdale feels that they have owned the reality that the integration was much harder than they ever expected it to be and that they have 100% owned that reality as an overall Brookdale problem, not attributed to either legacy company.

  • THE SINGLE BIGGEST AND MOST IMPORTANT THING THEY POINTED OUT IS THAT 1/3 OF THEIR PORTFOLIO IS AT 95% OCCUPANCY OR BETTER, and that 500 communities are over 90% occupied. (I would note that this is something they should be shouting out to the industry, the team members and the financial community.)

  • My biggest concern about Brookdale is that they are so focused on cost controls, discounting and programs, that the people factor gets missed. They feel that I misunderstand the narrow focus of the earnings call, meaning that talking about the cultural piece would not be helpful when talking to the financial community.

  • They say their corporate strategy goes beyond cost controls and occupancy/revenue growth to include many efforts to enhance the resident and associate experience across the board, including helping executive directors be better leaders.

  • In fact, over 35 Executive Directors who left Brookdale have returned during 2016.

  • Much of their current focus is on enhancing the resident experience. They have been pretty vocal about their “NPS” (Net Promoter Score) effort at industry conferences and have seen a meaningful improvement in that score this past year.

Brookdale says they are very proud of the experience base of their operational leadership, who — for the most part — have spent their entire careers in the industry, focused on their associates and residents, their culture and their mission.

So there you go. I so appreciate that we have the kind of relationship that allows us to do this back and forth . . . and I still think they need me on the board.