Archive for the ‘Senior Housing & Care’ Category

Background

I have been pessimistic about maintaining occupancy and pricing and the risk of overbuilding in private-pay seniors housing.   I shared these concerns, along with lessons learned from the last industry downturn, with the NIC Future Leaders Council at the annual conference of the National Investment Center for Seniors Housing and Care (NIC) in early October and will express similar views when I speak at the Senior Living 100 Conference in March.

Since I am more pessimistic about the risk of overbuilding than NIC MAP® Data Service and many industry professionals, I recently reviewed my assessment by examining the most recent census population projections to estimate demand and updated 3Q15 NIC-MAP information on supply. This blog summarizes the results of that review.

NIC MAP Assessment

NIC MAP data indicates a total supply of U.S. institutional quality private-pay seniors housing units (independent living, assisted living and memory care) as 1,404,000 units as of 4Q14.   It shows construction as a share of inventory for the top 99 markets as of the 3Q15 of 3.3% of existing majority IL supply and 7.9% of majority AL including memory care. If I apply these same shares to the inventory of seniors housing for the nation (1.404 million units), then I estimate that there may be 72,838 units under construction as of 3Q15.

NIC staff estimates that these 72,838 units will be delivered over a two-year period for average annual construction of approximately 36,400 units. This compares to peak construction levels of approximately 45,000 units in the late 1990s when the last significant overbuilding occurred.

NIC MAP’s statistics on demand and supply focus on two key items, % growth in the supply of private-pay seniors housing and the percent of the 75+ household population, or penetration rate, required to fill anticipated construction.  Comparing NIC MAP 4Q14 supply in the top 99 markets to the most recent U.S. Census 2015 population forecast for the entire U.S. 75 + population, NIC-MAP data shows a penetration rate for occupied private-pay seniors housing of 6.25% of the 75+ population in 2015 at a 90.05% occupancy level.  The 75+ population is projected to grow at a compound annual rate of 2.9% between 2016 and 2020 while the seniors housing supply is projected to increase by about 2.6% in 2016 if we assume that half of the units NIC MAP estimates are under construction as of 3Q15 are completed in each of the next two years.

The absolute growth in the entire U.S. 75+ population at a 2.9% annual rate is expected be nearly 626,000 annually.   At a 6.25% occupied penetration rate, this equates to demand for 39,125 new seniors housing units annually between 2016 and 2020 compared to annual unit growth from new construction according to NIC staff of 36,419 (72,838/2).   The market’s ability to absorb projected levels of new construction would appear even better on a net basis if obsolete units being removed from the market were to be deducted from the estimated growth in supply based solely on units under construction.   Using NIC MAP estimated supply growth rate (without any assumed demolition) the 75+ occupied penetration rate could actually decrease to 6.1% in 2020 while still keeping private-pay senior housing occupancy at the 90.1% level as of 3Q15 and filling projected development at its current rate to this same level of occupancy.

The key takeaways from this analysis of Census and NIC MAP data are:

  • Private-pay seniors housing construction levels in the US are elevated compared to recent years but below late 1990s peaks.
  • Demand is sufficient to accommodate current levels of construction because the 75+ population is growing at 2.9% annually between 2016 and 2020 vs. supply growth of about 2.6%.
  • Growth in the 75+ population between 2016 and 2020 will produce sufficient absolute growth in demand at a 6.25% penetration rate (39,125 units annually) to absorb projected seniors housing supply growth (36,125 units annually).
  • With the exception of some select markets, NIC MAP data indicates occupancy can be maintained without an increase, and even with a small decrease, in the 75+ occupied penetration rate of private-pay seniors housing.
  • Some older obsolete units will be removed from the market, further brightening the prospects for private pay seniors housing compared with estimates of supply growth based solely on units under construction.
  • Many industry leaders report little evidence of overbuilding in their markets.

Why I Am Concerned

I don’t dispute the NIC-MAP data factually or the view of many industry leaders but I believe they overlook three key items: (1) the increasing age of entry of new residents into private-pay seniors housing, (2) near-term growth in the senior population is concentrated in the “younger” 75 – 79 age group and (3) high turnover means newly constructed seniors housing is very competitive with the existing supply. These are the items that make me pessimistic about the near-term performance of private-pay seniors housing.

Increasing Age Of Entry – Different studies report different numbers for average age of senior housing residents and average entry age, but it is fair to say that in 2008/09 studies the average age of residents ranged from 82 in majority IL properties to 84 in majority AL properties and has moved higher.   Estimated entry ages for IL and AL are now closer to the mid-80s according to many operators.   This is important because much of the growth in the supply of private-pay seniors housing is in AL and Memory Care units that appeal to seniors over age 85, while much of the growth in the 75+ population will occur in the younger end of this age cohort.

Growth75+

Near-Term Growth Concentrated in Seniors Less Than 80 – The chart above shows projected population growth from the most recent projections of the US Census Bureau for the 75-79, 80-84 and 85+ age groups for the periods 2016–2020, 2021–2025 and 2026-2030.   Focusing on the 2016–2020 period you can see that growth is highest for the 75-79 age group, while much lower for seniors 80 and above.   As a result, when NIC MAP and others use a 75+ penetration rate it may overstate demand for private-pay seniors housing because residents are not moving in on average until 82 – 84 and perhaps 85 or higher for AL.

The chart below further refines population growth for seniors between age 80 and 87 to illustrate how dramatically growth is skewed toward seniors less that 85 between 2016 and 2020.

Growth 80 - 87

Near-Term Outlook Looks Worse On 80+ Penetration Rate – If we look at private-pay seniors housing penetration rates for the 80+ rather than 75+, the 4Q14 penetration rate for occupied units is 10.1% at the national level.   Annual projected demand between 2016 and 2020 for the entire 80+ population at this penetration rate is only 23,123 units, compared to current construction levels of 36,400 units per year and the 80+ penetration rate would have to rise to 10.8% in order to maintain senior housing occupancy and accommodate unit growth at current levels to 2020. (This analysis assumes that the rate of construction as a share of inventory exhibited currently for the 99 markets is the same for the non-99 markets as well.)   Slow growth in the 80 – 87 age group most likely to move into private-pay seniors housing (particularly in the 85+ age group) and the need for a significant increase in the 80+ penetration rate in order to maintain current occupancy levels raise concern about the industry’s ability to maintain private-pay seniors housing occupancy and rate and accommodate new unit growth near term, even if we assume some reduction in the supply as obsolete units are removed from the market.

Turnover – Data for YE2014 as reported in ASHA’s The State of Seniors Housing 2015 shows turnover rates of 26.2% for majority IL properties and 51.6% for majority AL properties for a weighted average of 36.5%.   With a total private-pay seniors housing supply of 1.404 million units and a 90.05% occupancy level, this means that 462,000 units need to be filled annually just to maintain current occupancy.    These relatively high rates of turnover, particularly for AL properties, mean that the existing stock of private-pay seniors housing is constantly competing with any newly constructed units and any degree of overbuilding is likely to quickly put pressure on occupancy and pricing in the existing stock, in my view.

When Will Supply Demand Improve – In order to assess when demand/supply conditions for private-pay seniors housing will improve, in the chart below I project growth in the supply of seniors housing into the future assuming the same rate of annual growth in supply seen in 3Q15.   This rate of growth (5.24% weighted average) is applied to the supply at the beginning of each five year period and held constant over each five-year period.  Once we pass 2020, as the chart indicates, the future of private-pay seniors housing is increasingly bright, with higher demand driven by increased longevity and, after 2026, the long-touted and final arrival of the baby boomers to an age when they might actually consider seniors housing.

Supply Demand

However, when you look closely at the above numbers, you see that 80+ demand begins to exceed the growth in supply only slightly in the 2021-2025 and really strong demand from 80+ seniors relative to the level of supply growth does not begin to appear until after 2026, when the Baby Boomers (1946 to 1964) begin turning 80.

Reasons For Near-Term Pessimism – While not every seniors housing market will get overbuilt and many high-barrier-to-entry markets may avoid the adverse impact of additional private-pay seniors housing development, I believe the data above supports my pessimistic view on private-pay seniors housing occupancy, rate and the risk of overbuilding over the next 3 – 5 years. If we keep building at current levels as a percent of supply and we focus on demand from 80+ seniors, it appears that the seniors housing industry will substantially overbuild the market over the next five years. In the period from 2021-2025, the amount by which projected 80+ demand will exceed projected supply growth should be sufficient to help absorb some of the excess supply created in 2016-2020 but may not be high enough to support a significant increase in occupancy or rate or a true senior housing boom.   The golden age in terms of demand is really a post-2026 event assuming supply growth continues at today’s rate, the health of baby boomers at 80 is about the same as today’s 80 year olds and boomers will find seniors housing as it is currently being designed and built attractive.

Keys To Success In A More Competitive Environment And Future Arrival Of The Boomers

In order to outperform in the more competitive environment for private-pay seniors housing that I see over the next 3-5 years, I believe operators should:

  • Limit new development near term
  • Focus on high barrier to entry markets
  • Try to reduce turnover
  • Design/Redesign/Market properties to attract under-80 or early 80s seniors by focusing on IL rather than AL and rethinking locations and amenities to appeal to “younger” seniors
  • Increase their equity cushion and line up capital in order to be able to bid for more attractively priced acquisitions if occupancy and rates fall and some new product cannot be filled as anticipated

In future blogs, I will discuss some of the cutting edge product that I believe will appeal to Under-80 seniors and look at the housing alternatives to private-pay seniors housing for this age group such as staying in their homes or choosing mixed age condos and apartments, using support services where necessary.

Technical Notes

I want to acknowledge the help of my friends at NIC in preparing this blog, even though it takes a more negative view on the near-term outlook for the industry.   I particularly want to acknowledge the help of Robert Kramer, Beth Burnham Mace and Chris McGraw.   Dave Schless at ASHA also reviewed an early draft and gave me his feedback.

I do not intend to malign NIC MAP data in this blog post. The advent and growth of NIC MAP data is a great tool for the industry and one that should help us avoid the rampant overbuilding seen in private-pay seniors housing in the late 1990s.   NIC MAP makes no statement about the appropriateness of the 75 plus penetration rate and demand, per se. NIC MAP adopted the 75 plus household cohort a number of years ago because it has been traditionally been used in the sector by feasibility analysts and others.

I also want to acknowledge two industry reports that cover some of the same material noted here but reach somewhat different conclusions. These are: Beth Mace’s Demographic Update Commentary, circulated by NIC in July, 2015 and Phil Downey’s and Larry Rouvelas’ A Projection of Demand for Market Rate U.S. Seniors Housing 2010 – 2030 published by American Seniors Housing Association Winter 2013.

NIC defines institutional quality private-pay seniors housing as properties with 20 or more units. NIC normally calculates penetration based by comparing the total supply of private-pay seniors housing in the top 99 markets to the total U.S. 75+ household cohort (not the entire household and institutional 75+ population).

In this analysis, I compare the total number of estimated occupied private-pay senior housing units in the U.S. to the total U.S. population of 75 and over and 80 and over seniors.   I believe use of a penetration rate based on actual occupancy rather than including vacant units is more accurate but use of either an occupied or total supply penetration rate would produce essentially the same result as indicated above.

While households are the standard unit of demand for housing of all types, NIC, other researchers and I also use population to measure future demand because the Census Bureau does detailed population projections by age but not projections of households.   Various commercial data services do project households by age.   One other cautionary note when thinking about demand projections for seniors housing is that male longevity has been improving, meaning more very old two person households and potentially less unit demand for private-pay seniors housing than population projections alone may indicate.

There are also some limitations in how I project supply growth.   I use NIC MAP construction estimates as of 3Q15 for the top 99 markets, make the assumption that these units will be delivered evenly over two years and that this same rate of growth is occurring in the rest of the country outside the top 99 markets and will continue in the future.

While I believe the assumptions used in this assessment are reasonable and have reviewed them with NIC staff, I believe it would be very helpful for the industry for NIC, ASHA or an independent academic researcher to undertake a demand / supply analysis using household projections by age, seniors housing supply and construction data for just the top 99 markets and include in this an updated survey of the actual entry ages for seniors housing today.   Such a study would allow us to better select an aged-based penetration rate at 75, 80 or 85 and would eliminate some of the uncertainty created by mixing population and supply data for the entire U.S. with occupancy and construction stats for the top 99 markets.

I welcome your comments on this blog post.

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Observations from NIC 25th National Conference

The National Investment Center for Seniors Housing and Care (NIC) http://www.nic.org held its 25th National Conference this week at the Gaylord National Harbor, just south of Washington.   I attended the first NIC Conference, which was a much smaller affair at a hotel in Crystal City, also just south of Washington but on the Virginia side of the Potomac.    Having spent much of my career in seniors housing and care as a real estate analyst, stock analyst, investment banker and now occasional consultant, it was very gratifying to see how much the industry has grown and matured in 25 years.

My only official role at the conference was to address the Future Leader’s Council (FLC), which is a carefully selected group that goes through three years of NIC leadership development activities before “graduating”, with a third of the group rotating each year.    I was impressed with the FLC members with whom I interacted and with the thoughtful way NIC is helping talented professionals grow into leadership roles at their organizations and in the industry.

My address to the FLC group was entitled “Back To The Future” and focused on lessons learned about the impacts of overbuilding and higher interest rates in the severe 1999/2000 industry downturn.   Most FLC members were still in primary or secondary school when this downturned occurred.

I would say the overall atmosphere of the industry at NIC’s 25th National Conference was “nervous optimism”.

The nervousness comes from:

  • generally unsettled economic conditions in the U.S. and around the world that could lead to higher interest rates and growing wage pressures on an industry for which labor is 50% or more of costs,
  • recent softness in private-pay senior housing occupancy,
  • a increase in the number of units being developed (particularly assisted living and memory care) and signs of overbuilding in select markets,
  • integration stumbles at the largest and largest publicly traded senior housing operator, Brookdale Senior Living (BKD),
  • some signs of a plateau in senior housing property capitalization rates and pricing,
  • a late summer sell off in healthcare REITs and generally unsettled conditions in the equity and debt markets, which appear to be driving the pause or potentially a backup in cap rate compression.

The optimism comes from:

  • a 15 year rebound in fundamentals from the last major industry downturn,
  • generally outperforming other real estate sectors through the Great Recession,
  • still strong consumer acceptance of newly open properties, particularly in high barrier to entry markets,
  • plentiful availability and still growing interest in the industry from both debt and equity capital providers, if perhaps at higher prices that were seen a year ago,
  • knowing that the industry continues to get closer to the holy grail of  75M + Baby Boomers becoming seniors housing and care customers (although still 10 – 15 years away).

Unless you are concerned about substantial overbuilding in private-pay seniors housing, which most thoughtful insiders are not (there will be some), the recent pullback in both healthcare REIT and operator pricing is making me more interested in investing in publicly traded healthcare REITs and private pay operators but there are few publicly traded operators to buy.    On the care side of seniors housing and care, there has also been a pull back that makes skilled nursing and post acute care company stocks attractive from a valuation standpoint.    Here, however, the slow evolution of a more integrated healthcare delivery system and new value-base purchasing and an uncertain political situation through the next Presidential election may keep a lid on valuations for another year or two.    Either way, it feels like a time to be considering investments in seniors housing and care for the long term investor.   I will leave it to those still working as equity analysts in the space to recommend specific stocks.

There are also signs at the conference that innovations in technology, property location and design are alive and well.  At least two efforts are underway to develop new senior housing properties in Manhattan.   The most interesting new building model I saw at the conference is a mid-rise product located in an urban main street location that looks more like an upscale yuppie rental project or W hotel, with services delivered on demand by the likes of Uber, Amazon Fresh and online home health providers.     This project is being developed by Smart Living 360 and Federal Realty Trust (FRT) in Rockville, MD and is scheduled to open in the Spring of 2016.   See website http://www.thestories.com/ for more information.

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Finding Happiness In Senior Housing

Three things came together to spark this blog:

  • A January 17, 2015 New York Times article entitled “Mean Girls in the Retirement Home” (http://nyti.ms/1KStZ4j),
  • A 2014 study by the American Seniors Housing Association (seniorshousing.org) entitled Unlocking the Mystery Behind Very Satisfied Independent Living Customers – Make Them “Feel at Home” and
  • A dinner conversation with a couple who are friends and former neighbors about choosing among several retirement communities in Boston, where they plan to relocate to be closer to their children.

The New York Times “Mean Girls in the Retirement Home” article documents the presence of cliques in senior housing communities that sometimes make it very difficult for a new resident to fit in.  Some new residents face outright hostility from existing residents who are already part of well established social groups.   It also documents the steps taken by a 97-year-old new resident and her daughter to help the new resident fit in and make friends.

ASHA’s “Feel at Home” study of very satisfied independent living residents also identifies cliques as a problem in established senior housing residents but it goes on to study factors that are most important for making a senior housing resident feel at home and be very satisfied in an independent living community.   The ASHA study is intended to help operators of independent living communities make their residents feel at home and boost satisfaction levels, resident retention and resident referrals, all of which can have a meaningful impact on the bottom line.

Last month, as I spoke with my friends in their late 80s about their move to a senior housing community in a new city, it occurred to me that the New York Times article and, particularly, the ASHA study can provide potential senior housing residents with an excellent list of what will be most important in making them happy in senior housing and a data-driven check list of what to look for as they consider various communities.   This blog attempts to reformulate the ASHA study into a compact guide to happiness in senior housing for potential residents.   My thanks to David Schless, Executive Director of ASHA, for giving me permission to use the study results in this manner.

What’s Most Important For Happiness?

How frequently and how strongly a senior housing resident feels at home accounted for nearly half of the overall satisfaction of senior housing residents in a 2012 ASHA study.   The 2014 study explored what caused independent living residents to “Feel at Home”.   ASHA’s “Feel at Home” study was based on a survey of 6,858 predominantly rental independent living residents in 11 metropolitan areas who completed a 55 question survey.   ProMatura Group, a well-respected survey research firm based in Oxford, MS that specializes in senior housing and care research, conducted the survey, evaluated the survey results and authored the ASHA study.  I want to thank Margaret Wylde Ph.D., CEO of ProMatura Group and her staff since for this blog I have borrowed liberally from the ASHA study, which was the product of their work.​

 

ASHA Feel At Home Graph

Key factors contributing to “Feel at Home” identified in the 2014 ASHA study include satisfaction with private residence (32%), camaraderie with others (31%), sense of control (14%) and staff know them well (5%).  Other items contributing less that 5% of “Feel at Home” included:

  • Number of friends in the community
  • Decorated residence the way they like
  • Know the things they need to know about the community
  • Quality of daily activities and programs
  • Dining program
  • Dining schedules
  • Frequency of seeing friends outside the community
  • Transportation provided by the community

What To Look For When You Visit?

ASHA’s “Feel at Home” study and this blog focus on satisfaction of independent living residents.   Someone moving to independent living is about 85 years old, is moving from their a private residence they have occupied for an average of 19 years, usually a single family home, and is healthy enough to live with minimum outside help with the activities of daily living (See Senior Housing Options above for a more detailed description).   The prospective resident is typically active in making the decision about whether and where to move.

Private Residence – Most senior housing communities are designed to wow you with their façade, grounds and the common areas you see just inside the front door, what marketers call “curb appeal”. While the ASHA study indicates the quality of common areas contributes to resident satisfaction, the study indicates attributes of the private residence are more important to residents feeling at home and being very satisfied.   Key factors in making a private residence satisfying include:

  • Unit size – Just like with Goldilocks, the most satisfying independent living residence was not too big or too small, with 841 sq. ft. on average being “just the right size”.
  • Decor and Storage Space – Being surrounded by familiar things, having a décor that you liked and the ability to store possessions where you can access them were important for overall satisfaction with one’s private residence.
  • Natural Light – In the ASHA surveys more than half of the “I’m Home” customers strongly agreed with the amount of natural light in their residence, so looking for multiple windows that allow for plenty of natural light is a feature prospective residents and their families should consider.
  • View from the Windows in Private Residence – Along with natural light, “I’m Home” customers were likely to have a nice view from the windows in their private residence.   More than half (54%) of “I’m Home” customers strongly agreed they enjoy the view from the windows of their residence.   A view doesn’t have to include beaches, mountains, parks or rivers; a nice view can be as simple as a tree, a small garden area, a fountain, or a bird feeder.

Camaraderie With Others – Camaraderie with others was nearly tied with “satisfaction with private residence” as the most important factor making senior housing residents feel at home and very satisfied.  Other factors, such as having close friends and the number of friends also contributed to residents’ satisfaction.   Gauging how well you or a loved one will fit in at a senior living residence can be difficult to do during a visit. Things you can ask about or do during a visit for how welcoming a community will be include:

  • Warmth of Greetings – Make it a point to notice if you are greeted warmly by staff and other residents.
  • Cliques – Ask staff specifically about the presence of cliques in the building and the specific measures staff takes to address cliques and the off-putting behavior that may be associated with them.
  • Steps To Help New Residents Fit In – A senior housing community cannot impose friendships on new or existing customers, but staff can and should facilitate that eventuality. According to the ASHA study, staff from the very beginning of association with a new customer need to learn who they are, what they like, identify and help them form links with other customers. Items noted in the ASHA study that might help include staff sponsoring house warming coffees for a small group of residents in a new resident’s unit after they settle in and having a mentor from among the existing residents help acclimate newcomers.  You should ask what specific steps each community takes to help new residents fit in.
  • Cultural Fit – Try to assess how you or your love one’s economic and social background compares with that of other residents and how the future resident’s age and physical and mental capacity match up. New residents that are on the slightly younger side, more mentally alert and better dressed may find it easier to fit in according to the New York Times article.
  • Interests – What are your interests and are there any others at the facility that have similar interests or some other connection that might make it easier for you to make one or two friends.
  • Try It Out – You should definitely try the dining and do it in the residents’ dining room not in a private dining room while meeting with the marketing staff.   This will give you an ideal of the quality of the food and how it is served as well as how receptive existing residents are to newcomers. Many senior housing communities also allow for short-term respite stays or give prospects a chance to try out the community.   This may offer a better way to assess your compatibility with a community than a visit or two of a hour or so.   You may also want to visit in the evening to see what staffing and the activity level is like after prime viewing hours.

Sense of Control – Sense of control was about half as important to resident satisfaction and feeling at home than a resident’s unit and camaraderie with other residents but did matter. Factors affecting a sense of control included:

  • Information – Knowing where things are, how things work and what is going on can be important for residents to feel in control.   The orientation and communication process between the building and its staff with residents is worth asking about. Sales counselors should explore the social preferences of prospects and ensure they understand the communal nature of the community. They should discuss group activities, dining, and the many interactions with others that occur during a typical day.
  • Scheduling Flexibility – New residents moving from a private home where they may have few visitors to a senior housing community with scheduled meals and activities and its own daily routine can experience a loss of control   Flexibility on meal times, when to get up and go to bed and options for transportation and activities can contribute to a resident maintaining a sense of control.
  • Options – Not Requirements – Residents should be encouraged to be out of their residences and participating in activities but should feel that have the option to pass on activities that aren’t of interest.

Staff Knowing Residents – How well the staff knows a resident accounted for about 5% of residents feeling at home and being very satisfied.   You should get a sense of staff interaction with residents during a visit and should explicitly ask existing residents if they believe the staff know them well.

Strategies For A Successful Transition and Finding Happiness

To ease the transition and find happiness in a move to a senior housing community, the studies suggest the following:

  • Recognize The Move Will Be Stressful – It is important for a senior moving into a community and their family to recognize that such a move is a major transition and will be challenging and somewhat stressful under the best of circumstances.
  • It Will Take Time To Adjust – Very satisfied residents who “Feel at Home” have an average tenure of four years, versus three years for those that sometimes feel at home and two years for those who don’t feel at home. So the longer a resident lives in a senior housing community, the more likely they are to “Feel at Home”.   Give yourself some time to adjust and stop missing your former home.
  • Identify Some Positives – Despite the magnitude of the change, there are usually real advantages for a senior previously living on their own.   These include: greater social interaction, better nutrition, more physical activity and potential greater freedom of action if you take advantage of community provided transportation and support services.
  • Incorporate Familiar Items – A resident’s own furniture and other familiar and personal items can help make the new residence “Feel At Home”.
  • Visit Often – The quality of visits by family members is important to overall satisfaction and can help ease the transition and the feelings some new residents may have of being isolated in their new surroundings.
  • Get Out and About – Opportunities to visit places and friends outside the community is also an important factor differentiating very satisfied residents.   Excursions with family members or friends, using transportation offered by the community, or Uber or taxi may all be beneficial in easing a transition to a new senior housing community.

 

 

 

 

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Repositioning Older Assisted Living Properties

Background

With NIC-MAP data starting to report an upturn in senior housing development activity, many older senior housing properties are or can soon be expected to face a more competitive market for new residents.    Senior housing, and particularly purpose built assisted living and memory care, are relatively young industries and most early assisted living properties were developed in the mid-1990s.    Nevertheless, early assisted living properties, particularly those that did not receive substantial capital infusions during the recession, are becoming dated in comparison to newly constructed buildings.   As a result, repositioning of older assisted living and memory care properties is likely to become increasingly important for the senior housing industry as more new units are constructed and competition increases.

Because many, but certainly not all, early assisted living and memory care properties are located in very attractive, hard-to-duplicate infill locations, repositioning good 1990s vintage properties may prove a very attractive investment alternative if such properties decline in value because of occupancy declines in a more competitive environment.   In this blog, I focus on repositioning opportunities for the classic Sunrise Mansion property as a proxy for all older assisted living and memory care properties.   I focus on Sunrise properties not because I believe the company has underinvested in their assets relative to other operators but because the Sunrise Mansion is the prototype for almost all of the mid- to late-1990s assisted living and memory care buildings.  As I write this, it has been 3 – 4 years since I toured a Sunrise mansion. So some of my observations may be dated.   However, over the course of my consulting, equity research and investment banking careers I easily toured dozens of Sunrise Mansions and similar vintage properties operated by national companies, regional and local operators.   I had the opportunity over the years to meet with several generations of Sunrise senior and operational management as well as senior and operational management of many other national and regional senior housing operators.   I also have had many informal discussions advising family and friends about senior housing options and getting feedback on their senior housing experiences and was actively engaged with the placement and experiences of my own parents in both assisted living and skilled nursing care.

Sunrise Mansion Pros and Cons

Before providing my thoughts on repositioning Sunrise Mansions and properties of similar vintage, I wanted to list the pros and cons I see for these Sunrise Mansions as a proxy for well located, good quality 1990s vintage assisted living properties:
 

Sunrise chart

Suggestions For Repositioning Sunrise Mansions and Properties Of Similar Vintage

Location – Most locations are very good.  However, some may have become less viable because of changing neighborhood conditions, because some site locations were forced at height of late-1990s development push or because newer competition has come on the market.  You can’t move the buildings but in most cases existing locations work and some existing sites may offer redevelopment or new construction options.

Design – Property sizes range from 75+/- resident capacity to 120+ resident capacity.   While I conceptually agree that residents should be out interacting with other residents and staff, not in their units, some Sunrise and other early assisted living units may be too small for current affluent senior preferences, which I summarize as independent living size apartments with assisted living + level services.   I continue to like pricing flexibility that flexible single/dual occupancy units provide but some may need to be reconfigured into more interesting larger units given demand.

Since, in most cases, buildings are on in-fill sites and cannot be enlarged, the practicality of combining some existing units to increase average room size, reduce total unit count and add some common space elements should be explored.   Given building size, an opportunity may exist to differentiate a Sunrise Mansion type property as the boutique/exclusive/personalized sized provider with somewhat smaller buildings than competitors if the economics will work.  I do not know the economic impact of reducing residents/increasing unit size but believe these options need to be explored and believe that there may be pricing flexibility for more exclusive, more personalized services in smaller buildings.

I believe the basic building design in Sunrise Mansion type properties is excellent but I would add room for a personal trainer and possibly some weight equipment, and perhaps more dedicated space for classes like yoga/palates, more space for a spa (facials/pedicures/massage, etc.) rather than just a beauty shop and perhaps space for a rehab therapy provider, which might be combined with personal trainer space.   If rooms are being enlarged and number of residents reduced, I believe it should be possible to convert a few smaller rooms to the uses noted above.   I believe these changes should appeal to affluent consumers and their children and can be used to offer more personalized care options than three levels of care that have traditionally been used by Sunrise and many other operators.   Personal trainer, yoga classes, extra beauty treatments could all be offered on fee for service or club membership plan.   I believe personalized services like those described above could all be offered in relatively small spaces and still make Sunrise type buildings much more competitive with larger AL and IL properties with services.

I believe space for Internet café within building and a broader look at use of technology for patient interaction with families, staff monitoring, etc. is important.   See my blog on “Technology In Seniors Housing” for a more extensive discussion of how technology can be used to increase resident and family engagement, interaction, mobility and evaluation.   But FaceTime or Skype interaction between residents and families, regular email or video reports to families on the condition of loved ones, computerized links to physicians and other care providers, computerized tools for patient monitoring and stimulation and things like Uber for more flexible transportation services are all things that might reasonably be incorporated into existing senior housing communities.   Some of these require dedicated space and all require trained or specialized staff.

Overall decor, which in early Sunrise properties I remember as being a bit fussy “Laurel Ashley-like” may need to be updated.

The levels of cap ex spending by operator varied, particularly during the recession but I expect basic-cap ex and infrastructure investment will be needed for mid-90s vintage properties to remain competitive as new properties are introduced to the market.

After a fire last year in senior housing facility in Canada, the importance of life safety standards, which I believe is high at Sunrise Mansion properties but not all 1990s vintage properties, should be emphasized.

Services – Service has and will continue to be more important than space for high quality senior care.   Sunrise was a trendsetter in quality and personalized care compared to traditional skilled nursing properties and I believe continues to have a strong commitment to resident independence, dignity and quality care. However, patient wellness and treatment standards for memory care have evolved since the core Sunrise care concepts were developed in the 1990s and I believe a complete review of Sunrise’s memory care service offerings and those of many other AL/memory care operators with an eye to setting a new standard for quality and personal attention is likely needed. Key elements in a revision to services that I see include:

  • A wellness program that provides individualized and integrated exercise, nutrition and mental health services for each resident.   This would incorporate a personal trainer rather than the group exercise programs now seen at Sunrise Mansion and other facilities, even more personalized meal planning and both computer assisted and staff provided mental agility and health services screening and stimulation.   This assumes additional staff on contract or employed with specialized training not now found in Sunrise facilities to the best of my knowledge.
  • More active review of medication management, particularly for memory care residents.   This may require a more active link between Sunrise facilities and healthcare or mental healthcare providers.  I am no expert in this area but believe that some dedicated memory care providers, such as Silverado, are more active in reviewing medications and medication management than most AL operators, are more likely to recommend changes in medication regimens and have more active involvement by attending physicians in reviewing their resident’s medications.  I believe over medication and adverse medication interaction remains a bit issue for seniors and this is an area with AL operators may be able to distinguish their service offerings.
  • A review of the memory care program. My sense is that providers like Silverado, with links to leading healthcare researchers at many of its facilities, have developed more comprehensive memory care treatment protocols than Sunrise any other operators who have been in the business for a while and Sunrise and other national AL operators should again set the standard.
  • I believe respite care is offered at many Sunrise communities but not certain if this is considered an integral part of the service offering that could be coordinated with a more robust therapy offering to position Sunrise as a post-acute or recovery option in a more integrated healthcare system. My recollection is that respite care is just used where units are vacant as a marketing and supplemental revenue generation tool.   I am not certain that Sunrise or other assisted living providers should be in the post-acute or respite business but these options should be evaluated and a business decision made.   Focusing some buildings on respite/post-acute care may make sense and it may be possible to combine on site respite care with rehab therapy to offer a more attractive and lower cost post-acute care alternative for some seniors and insurance providers.
  • Other ancillary services, in addition to rehab therapy and medications management noted above, such as hospice and home healthcare care have been at times offered by Sunrise and other operators both in and outside their properties with company staff.  I believe home healthcare and hospice care continue to be offered by third parties at some Sunrise properties.   I believe Sunrise’s commitment to let residents age and ultimately die in place is an important part of the Sunrise culture and a differentiated element of the Sunrise brand and is also an important part of some other operators culture.   However, there are a range of ancillary care options for assisted living operators ranging from: avoiding supplemental ancillary services to make their buildings more appealing to healthier seniors, to allowing residents to purchase services from third parties, to having approved partners, to directly providing ancillary services. My sense is that directly providing of ancillary services would be a significant distraction for many assisted living operators but a clear policy about the use of ancillary services in all of a company’s properties should be made if this has not already been done and using different levels of ancillary care at different buildings may be a way to differentiate a particularly property within a market.
  • Medicare managed care for residents is another option that Sunrise and other operators may wish to consider, likely teamed with a partner.   The only senior housing operator to operate its own Medicare Advantage plan, to the best of my knowledge, is Erickson Retirement and only at some of its communities.   Sunrise, Brookdale and some regional operators may have the resident density in some markets to either operate a MA plan themselves or team with a managed care or healthcare provider partner to operate one.   This could be an important differentiator if it helps ease the burden of coordinating healthcare services for residents and their families and is seen an providing quality care.  It might also be a more effective way of providing other ancillary services rather that teaming with various hospice, healthcare or therapy providers. In some markets it may be possible for multiple operators with links to a single healthcare REIT to join in a Medicare Advantage or other type of ACO plan to gain sufficient scale to be effective.
  • Transportation – Mobility is an important factor for many seniors.   A review of transportation options with multiple vehicles and multiple drivers available in lieu of the single bus should be considered. I envision each repositioned property having or having access to two or more of the new small SUV cab-type vehicles increasingly seen in major cities, and becoming standard in New York, that can readily accommodate a wheel chair and perhaps up to four passenger in total.  In addition, I envision each facility having something more akin to Uber to schedule cars and pick ups as needed, giving residents much more flexible mobility.   It may even be possible to use an outside Uber or Lyft like service specially tailored to seniors for this. The traditional facility bus might or might not still be needed for group outings.
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Layman’s Guide To Post Acute Care

I had a conversation with a friend today who has a relative that is comatose after a surgical procedure.   The patient has recently been shifted from a feeding tube though the nose to one connected to the stomach and is about to be transitioned from oxygen through a breathing tube to a ventilator connected directly to the throat via a tracheotomy.   This progression is typical for someone who is unable to eat or breath on their own because temporary breathing and feeding tubes over time begin irritate the throat and must be replaced with more direct connections.     Once these more permanent breathing and feeding connections are completed, the patient will likely be transitioned from an ICU to a transitional care unit within the hospital and then the hospital and Medicare or a private insurer will likely soon want the patient relocated to from the hospital, which is designed to provide short-term acute care.

While hospital discharge planners or social workers and the patient’s health insurance provider may all have suggestions or recommendations or preferences about where the patient’s post-acute care should be provided, under Medicare and some types of private health insurance the family will have a choice about where post-acute care is provided.    This short guide summarizes the options to help you achieve the best result for a loved-one at a stressful time for all concerned.

Types of Facilities – There are four types of post-acute care options, which are typically stand-alone facilities but can also be co-located within a general acute care hospital in some cases.   The four types of post-acute care facilities are:

  1. Rehab Hospital, also called an IRF- Inpatient Rehabilitation Facility
  2. Long Term Acute Care Hospital, LTAC, sometimes LTACH
  3. Nursing Home, also called a SNF – Skilled Nursing Facility or in some cases a Transitional Care Facility, which is essentially a SNF located within a hospital
  4. Hospice, which can be provided in a specialized hospice facility, within a SNF or other medical facility or in someone’s home.

A Rehab Hospital or IRF is designed to provide post-acute care for patients who require and are physically able to participate in a minimum of three hours a day of physical therapy (PT), occupational therapy (OT), and/or speech therapy at least five days per week.   Requirements for IRFs call for registered nurse (RN) oversight and availability 24 hours a day and between five and seven and a half nursing hours per patient per day, while the standard for nursing homes is usually between two and a half and four nursing hours per patient per day.   IRFs are also going to have regular physician visits and supervision and extensive rehabilitation gyms and specialized rehab equipment and staff.     So IRFs generally offer a higher level of care than nursing homes but only those patients who are able to handle at least three hours of therapy per day are able to transition to a IRF.   Medicare and most private insurers will pay for IRF care for patient who needs and can tolerate relatively intense therapy following an episode of care in a general acute care hospital.

A Long Term Acute Care Hospital (LTAC) is licensed as a acute care hospital but is designed to care for patients with a 25 – 30 day average length of stay versus less than 5 days in a general acute-care hospital.   Typical LTAC patients have multiple co-morbidities, multi organ system failure, and significant loss of independence, most following a traditional hospital stay.   LTACs are designed to care for critically ill patients who require specialized, aggressive, goal-directed care over an extended recovery period.   So patients on feeding tubes, with tracheotomies and complex, difficult to treat medical conditions are well-suited for care in an LTAC provided there are expectations that the patient’s condition can improve or that their condition needs to be stabilized before stepping down to another setting offer less intense care, such as a SNF or home healthcare.  Medicare and most private insurers will pay for LTAC care for medically complex patients who need ICU level care for an extended period following an episode of care in a general acute care hospital and have some prospect for recovery or being stabilized so they can ultimately be cared for at home or in a SNF.

A Nursing Home or Skilled Nursing Facility (SNF) in most cases offers two types of care.    One is true post-acute care that includes therapy services similar to what is provided in an IRF and some may accommodate complex patients including patients with tracheotomies similar to what may be provided in an LTAC.   Some nursing homes have extensive rehab gyms and therapy staff and will have 24/7 RN care and attending physicians.  But not all nursing homes provide post-acute care services or take medically complex patients and requirements for nursing hours and physician supervision are typically lower in a SNF than an IRF or LTAC.    Nursing homes also offer longer-term nursing care, sometimes call custodial care, for patients who have health conditions that require enough nursing care to make care at home infeasible or who do not have a home or family situation that will allow care at home.    Custodial patients may staff for years and there is little expectation that they will recover and return home.    Medicare and private insurers will generally pay for a limited period of post-acute care in a SNF following an episode of care in an acute care hospital.  But the amount of time for which Medicare will fully cover SNF care is 20 days, after which a co-pay kicks in, and Medicare will not cover long-term custodial care for a patient who is not making progress toward recovery.   For patients without long term care insurance the only option for paying for long-term custodial care in a SNF is Medicaid, which generally will only cover payments after all of a patient’s own funds are exhausted.

Home Healthcare is non-facility based option that provides post-acute care for some patients.   It can deliver wound care, PT, OT and speech therapy and other types of skilled care but will not provide 24/7 patient monitoring and generally requires support from family members in order for this to be a viable option immediately following a general acute care hospital treatment.   Home healthcare often comes into the picture is to provide followup therapy or nursing care after a patient transitions from an IRF, LTAC or SNF to home but is only relatively healthy patients with supportive living situations and families are typically able to get all of their post-acute care from home healthcare.   Medicare and private insurances will pay for home healthcare but only for specific skill nursing and therapy services.

Hospice Care provided in a specialized facility, within a senior housing, nursing home or other health facility, or in one’s own home, is intended for patients who are expected to live for six months are less.    The care is design to keep the patient comfortable and free from pain and to help family member cope with a loved-ones impending death.   While most healthcare providers are reluctant to conclude that additional medical treatment will not allow a patient to get better, hospice care is a very good option once the family and their healthcare providers reach this conclusion.  Medicare and most private insurers will pay for hospice care in a variety of settings.

Deciding Where a Love-One Should Receive Post-Acute Care – Important factors to consider include: the type and level of care the patient needs, the quality and location of the facility.     The type of care that each facility offers is summarized above and you can discuss the appropriate placement with the care team at the hospital including your physicians, nurses, discharge planners and social workers who usually take primary responsibility for transitioning a patient to post-acute care.    There is a tendency to favor facilities offering the highest level of care, such as an LTAC or rehab facility over a nursing home.   However, if the patient will does not need or will not be able to tolerate the level of therapy these facilities can provide it may be better to to directly to a nursing home rather than spend a few days or a week in another type of facility and have to move the patient a second time.    Many patients will prefer home healthcare to facility-based care but it is important to be realistic about whether the physical conditions of the home and the amount of support family members can provide make this the best first post-acute care option.    Location matters because it is important for family members to visit during what may be a multiple week or month period of post-acute care and family members are more likely to visit if a facility is conveniently located.     Finally, quality can be assessed by visiting a facility, speaking with discharge planners and social workers, checking online (The Centers for Medicare and Medicaid Services (CMS) has a 5-star quality rating system that isn’t perfect but can help – https://www.medicare.gov/nursinghomecompare) and in the case of skilled nursing, check with the state Office of Aging ombudsman about any prior complaints.

It will be much easier to evaluate and find space in a facility of your choice if you start looking before your loved-one is about to be discharged.    However, if you need more time it is possible to appeal a hospital discharge and generally buy yourself one-three days if you need more time to evaluate and decide upon your best option for post-acute care (see appeals on the Medicare.gov website).
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Relationships Key to Happiness In Retirement & Seniors Housing

I spent a recent weekend on the Rhode Island shore with a eight friends I have known for over 40 years and several of their spouses/significant others.     We try to get together every two or three years and it is amazing how quickly we are able to reconnect and how reminiscences we have all been over many times before are still a pleasure to hear.

This weekend experience reminded me of the importance of relationships – with a spouse or significant other, with your children and family and with friends and neighbors – for happiness.     I believe the importance of relationships in making us happy is too often overlooked when seniors contemplate a move from work to retirement, in relocating to a new location for all or part of the year, and in thinking about and executing a move to a seniors housing community.

Relationships In Retirement – One important aspect of moving from full time work to full time retirement is that many of our friends and social relationship revolve around our work.   We all have business colleagues inside or outside our organizations that we interact with socially as well as professionally for lunches, dinners, conferences and meetings, charity events, golf and other activities.   These relationships are hard to maintain when you no longer see these colleagues on a regular basis.   If you want to maintain these relationships you, as the retiree, will have to work hard to maintain active contact with former colleagues.

Even if you make the effort to keep connected with former colleagues, many of these work-connected relationships will slip away when you retire because you simply won’t be moving in the same circles as former colleagues.   To supplement these relationships, you need a plan of action to build alternative social relationships, particularly some that are intellectually stimulating.

Once you do retire, some of the most significant challenges you encounter in your social relationships may involve your spouse, significant other, children and other family members.   The relationship with your spouse, if you are married, may be the most important post-retirement relationship you have.   But the nature of your relationship with you spouse may change dramatically as one or both of you has more time at home and you negotiate new responsibilities on household chores, financial management, planning vacations and social activities.     It is important to anticipate and discuss these changes in advance and to maintain an active dialogue as you settle in to your post-retirement lifestyle.

Relationships with children are another important aspect of happiness for retirees but can also create challenges.   Children may live far away, may want more of your time for childcare than you want to give or may not want your advice or help now that you have more time to offer it. For many of us baby boomers our retirement may coincide with our children marrying, getting traction in their careers, establishing families and generally feeling more independent from parents and less in need of parental advice. It is important for the parent/retiree to be sensitive to these changes in roles and to adapt to changing conditions.   It is also important to let your children know if you believe they are claiming more of your time for childcare or other responsibilities than you want to give.

Relationships As We Age – Another aspect of relationships that I believe is very important for happiness and underappreciated as we age is the loss of connectivity to others as your mobility and that of friends is reduced, you or friends relocate to new locations or a spouse or other close friends die.     Many seniors face a gradual narrowing of social relationships and human interaction for the reasons just noted.     Most of the literature that discusses a senior moving to senior housing, including a July 10, 2015 New York Times article entitled “Team Effort In Making Decisions on Elder Housing” focus on a senior’s cognitive and physical abilities, as well as financial considerations, in determining when a move from a home to seniors housing is appropriate.   I believe an equal or more important reason to consider seniors housing, and one that I believe is a good predictor of future health, is a senior’s social network and level of social interaction.   If a senior has lost a spouse, has a shrinking network of social relationships and has very little interaction with peers, family or friends when living at their home or apartment, I believe a move to seniors housing should be actively considered as a way of putting a senior in a position to re-establish meaningful social relationships and interactions.  It may be appropriate to adopt for seniors the same rule I recently saw advocated for children – if they are spending more than two hours a day in front of a screen, be it TV, PC, videogame or tablet it may be time to examine their level of social interaction consider intervention.

I believe there are also practical advantages to discussing a senior’s potential need for seniors housing in terms of social interaction, rather than cognitive or physical limitations.   In the discussion of social interaction, there is a presumption and a focus on a senior being alert, active and in need of human interaction rather than a focus on declining mental and physical abilities.   A move to a senior housing community to make new friends and increase social interaction is a much more positive discussion than a move to prevent falls or keep a senior from harming themselves through mental lapses.   It is also a discussion that can and should happen sooner in a senior’s life when they will gain much more out of a move to a seniors housing facility and before a life incident forces consideration of a move under crisis conditions.

In a future blog, I will discuss the challenges to fitting in and establishing positive social interaction after a move to seniors housing based on some recent industry research.

 

 

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Technology In Seniors Housing

Stereotypes view anyone over 50 as barely able to keep up with technology and unable to use smartphones, Skype or Netflix. But technology already plays an important role in the lives of many seniors, even those over 75. It is reshaping the ways seniors live and interact in their homes and within senior housing communities.

Today, most senior housing communities offer wifi access to residents and many provide a computer center and computer training and support for residents.    Wii and other gaming systems are widely used for bowling and other socially and physically engaging activities.  But the use of technology to enhance resident’s lives and improve the quality and efficiency of care delivery is still in its early stages.

I strongly believe the use of technology will continue to grow in seniors housing, particularly as the baby boom generation, now 51 to 69, age into seniors housing.   The baby boomers were the first generation to being interacting with computers during their school years and are generally much more comfortable using technology than the Roaring Twenties and Depression Era babies using technology in senior housing communities today.

Much has been made of the ability of technology to enable a greater proportion of old, frail seniors to living independently and I believe we will see continued progress in this area. But I also see technology increasingly being used within senior housing communities to enhance 1) communication and interaction, 3) engagement, 3) evaluation and 4) mobility.

Communication and Interaction

FaceTime, Skype and similar services are a vital link between grandparents and grandchildren and may be the biggest single driver spurring current senior housing residents, generally 75 years of age or older, to use smartphones and computers.   These same tools, along with more conventional email, are now and will increasingly be used to link adult children and other family members with senior housing residents and, for the savvy senior housing operators, to link adult children with caregivers and administrators to get more timely and more interactive information on how their loved ones are faring in senior housing communities.   These same tools will also become an increasingly important link between senior housing communities and other caregivers outside the community, including physicians and hospitals.   Healthcare IT and data interoperability among facilities and caregivers is still in its infancy but some forward thinking operators are building data links between their facilities, hospitals and other healthcare providers.   The goal here is to improve communication, reduce unnecessary hospitalizations and adverse drug interactions but the technology also has the potential to greatly improve communication with seniors themselves and with their families regarding healthcare issues.

Engagement

Use of Wii and other video games to engage seniors socially and mentally barely crack the potential of technology to enhance engagement and mental stimulation for seniors, who often feel isolated in senior housing facilities today.     Why not use technology to deliver high quality courses, concerts, yoga and other activities with better trained and more professionally produced programs than are possible with local volunteers and on-site staff.   Most senior housing residents in my observations are bored in their communities and would welcome more stimulating programming that technology can likely deliver better and less expensively.   There is also emerging technology, such as robots of various types, that has the potential to engage residents much more actively and much more regularly than can be done today by human staff.   As the cost of this technology declines, a robot companion for every resident that wants one is a realistic near-term possibility and robots, in addition to engaging residents directly, could also offer video links to family members and care givers and friends potentially in a more seamless way than is possible with current smartphone and computer software.

While I was on vacation this past month, there was an article on July 2, 2015 in the “Personal Journal” section of the Wall Street Journal about a dating service for seniors started by the Hebrew Home in Riverdale to connect its residents.   While this dating service appears to be more staff than technology driven, it points out another potential use of technology for engaging senior housing residents that even most professionals working in the field would not have considered.

Evaluation

Seniors housing facilities are regularly evaluating residents to determine what level of services and support is appropriate and a range of caregivers inside and outside senior housing facilities are regularly evaluating seniors mental and physical conditions to ideally adjust care and medications levels to avoid falls and other adverse health conditions.   Technology is emerging, including devices such as the Apple Watch and Fitbit, to monitor various health parameters.   To date this technology has been focused on younger, healthy, tech savvy adults, not seniors.   But I see significant opportunities for seniors’ health conditions to be monitored in greater detail in real time in an unobtrusive manner and to alert caregivers when key vital signs, like blood sugar or blood pressure, deviate from established norms.   Using technology to monitor cognitive ability on a regular basis is already possible via online tests and will be using increasingly in seniors housing communities, I believe.    Also, as noted above under communication, some degree of remote patient assessment and diagnosis is already happening in some senior housing communities as on site staff reach out to on-call physicians or nurse practitioners. Expanded use of remote technology for resident healthcare evaluation has the potential to significantly enhance the ability of facilities to address resident needs without resorting to an ambulance call or hospital visit.

Mobility

An entrance fee CCRC in Baltimore, near where I live, recently added a Zipcar site in its parking lot.   The service is available to residents and staff and has the benefit of reducing demand for parking from seniors holding on to their cars, improving mobility options for residents still able to drive and for staff, many of whom rely on public transportation to get to and from work.   I haven’t seen details about how Zipcar may qualify seniors to drive its vehicles but this concept seems to be to offer greatly enhanced mobility options for seniors and staff.   The other options that I see significantly enhancing mobility options for seniors are Uber and Lyft type services, which can provide much better and more flexible mobility options for senior housing residents that the typical senior housing facility van.   Seniors are already using Uber and Lyft from their homes but I have not yet seen senior housing communities formerly engage Uber and Lyft in lieu of or in addition to offering the conventional van. Nor have I seen these services target senior housing communities by training drivers to deal with senior residents or equipping vehicles with handicapped access but these accommodations would seem to offer great potential to enhance senior housing resident mobility. I believe there is a significant opportunity both for Uber and Lyft and for senior housing operators to develop a ride sharing service specifically designed for and targeted to seniors living on their own and in senior housing facilities.

Guidance for Operators

It is unlikely in my view that grand integrated technology solutions will appear for communication/interaction, engagement, evaluation and mobility.   Rather innovation by operators and technology companies will likely create technology to address specific issues and operator will be left to integrate these into their operations. The best way for operators to prepare for new technology, in my view, is to build innovation and experimentation into their operations, working with small groups of staff or individual properties.   Try things, some will work, some won’t but over time technology offers the potential to significantly enhance the resident experience in seniors housing and to increase care quality and delivery.   Operators able to innovate will be able to differentiate themselves from competitors and offer services that will not be available in seniors’ homes.

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