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Senior Living Business |
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April 2007 issue Read more about Senior Living Business.
Companies Mentioned in this issue:
B’nai B’rith International p3 |
Tomorrow’s Seniors Want Options - Choice-Driven Senior Living Becomes the New ParadigmThe largest population in the senior demographic – with the greatest amount of wealth ever – is just hitting the U.S. senior care market. On top of that, land and construction costs have become so extravagant in many areas of the country that senior living costs/rates must be well above market value to justify any new development. Rather than seeking "senior care," leading-edge baby boomers, whether well-heeled or with moderate resources, are thinking about retirement environments where they can enjoy the rest of their lives — which could amount to two, three, or even four decades — and enhance their lifestyles intellectually, culturally, and socially. They want to own. They want to travel. They may even want a timeshare. Even seniors who aren’t as active — those who require skilled nursing, for example — want a more enriching environment than many nursing homes currently provide. And this represents a huge opportunity for senior care providers. Today’s traditional, needs-driven senior care model must adapt to the choice-driven model of senior living that is the preference of the coming surge of active, independent, and "younger" seniors. "Retirement must be viewed in a whole new perspective," says Maria Dwight, President, Founder, and CEO of Gerontological Services, Inc., "one that’s not necessarily health-focused nor care-based. It’s life-focused. It’s about having a wonderful life for the rest of their lives. Nursing homes are not going away, but the one-size-fits-all variety — the long corridor with the shiny floors and beds next to one another —just will not work in the future. It’s out. It’s gone. It’s dead." Canaries in the mine Jim Bowe, Vice President of New Business Development and Advocacy for Trinity Continuing Care Services, defines the choice-driven premise as an unrelenting insistence on quality, choice, value, and convenience. "We’re reaching the tail end of serving the so-called ‘silent generation,’ those that lived through the Depression and World War II and understand sacrifice," he says. "Over the next five years, as baby boomers approach old age, we’ll be entering the formative stages of a dramatic shift in terms of the market’s expectations. Adding to that seismic change will be the influence of increasingly astute adult children. All signs, therefore, are pointing to a need to anticipate how we’ll reinvent senior living for the next generation of consumers." Dwight recognizes the coming flux in the industry, as well, but sees some changes as already taking place. Many facilities have noticeably altered their living spaces and amenities over the last decade. The younger end of the "silent generation" is now about 70 years old and, with extended life expectancies, should continue to be around for many years to come. "I view these people as the canaries in the mine," she says. "They’re causing immediate changes that will only increase as the boomers come along. At some point, it’s likely that the industry will have to accommodate three generations of old people." In some ways, Dwight sees 55-plus active adult communities as direct competitors to CCRCs, because they bring in younger people who stay put until they need assisted living. On the other hand, with good positioning, those communities could serve as feeders to assisted living or skilled care facilities. Dwight’s clients are looking at that option when developing active adult communities. What do seniors want, anyway? How can you really know what future residents will want? "Ask them," says Dwight, who has more than 40 years of experience in programming and planning facilities and services for seniors. "[Next-generation seniors] are very outspoken. They want what they want. If they say they want a two-bedroom unit, they want a two-bedroom unit. If they don’t want to eat breakfast with 100 other people, they don’t want that kind of environment. They’re very honest and open — and, therefore, good indicators for the future." She also recommends that providers survey current residents. "Their lives are very much affected by what happens in this repositioning of the industry," she suggests, "and they, too, are very vocal. If you don’t ask, they’ll tell you anyway — and perhaps in ways that you don’t want to hear." According to research conducted by Dwight’s firm, the "younger older" market — the boomers — are definitely most interested in condos, while the "mid-older" market — 75-plus years of age — are accepting housing with refundable entry fees. "The big deal for those in the younger age group is about having control over both their lives and the services," she says. While Dwight is all for options, she is "curious," nevertheless, about whether condos and co-op housing options will succeed. "I have experience working with senior condos," she notes, "and the condo association becomes a very difficult vehicle in terms of being strategically visionary." John Durso, partner
and senior member of Ungaretti & Harris Healthcare Practices Group,
has dedicated his 29-year legal career to health care providers, including
religious and other not-for-profit organizations, that serve seniors. For
more than 10 of those years, his firm has set up condos and co-ops for
various clients. Along the same lines that Dwight brings up, Durso cites
two One problem with condo law and, sometimes to a lesser degree, co-op law is that management contracts are restricted to a certain length of time. "That results in a situation where, at some point, the developer or not-for-profit sponsor must give over operational control to the condo or co-op board — the residents," he explains. "Their view of long-range planning may not include such things as taking care of the roof or even changing the carpeting. Figuring they might not be around in a few years, they are sometimes unwilling to spend the money." A second issue, one that can affect other types of senior housing as well, is how to move residents from independent living — or from one setting to another — when their health deteriorates. "In a CCRC," Durso says, "the contract with residents reserves certain rights to the not-for-profit sponsor and to those running the facility. That’s harder to do in a condo or co-op setting, because the residents are owners. Even in a CCRC setting, though, we see fair-housing issues and challenges from residents who want to stay in their independent living units and have services brought in. The arguments are even stronger when the residents own their units and maintain their right to stay and bring services in — assuming they can afford those services." The social fallout and the programmatic issues for condos can be huge, according to Dwight, especially for facilities serving the less affluent. "Condos may not have all the expensive overhead," she maintains, "but they also have fewer amenities. That’s when we see people wanting to go back to co-housing and shared community services." Focus on community-based services Dwight expects that the most dramatic changes we will see will occur in the way services are delivered. "The demand for contract options will increase," she says, "and I foresee a lot more integration into the community at large. I also see intergenerational and multigenerational opportunities increasing." Community-based services, then, may be the future and, according to Dwight, providers will have a leg up if they can build on a solid reputation and good track record within a community. "It’s not easy to do," she admits, "but a lot of organizations are doing it — and doing it well." As examples of community-based alternatives that are working well, Dwight points to Beacon Hill Village, a not-for-profit organization in Boston that owns no real estate but, instead, has developed a network of services. She also cites Community Without Walls, Inc., a Princeton, New Jersey-based organization that helps its members "age in place" — initially in the current residence and, subsequently, in other community-based options such as shared housing, assisted living, and CCRCs — by assisting with information, education, social support, and advocacy. "You’ll find these kinds of services happening more and more," says Dwight. "They’re springing up spontaneously. I see a huge opportunity for not-for-profits to excel in this area, but it is entrepreneurial. They’ll have to move fast." Comments by Jim Bowe, Maria Dwight, John Durso, and Rick Mazza are from the March 6, 2007, audio conference, "Best Practices for Not-For-Profit Providers: Changing Your Business Model to Meet the Needs of a Choice-Driven Senior Market," part of The SeniorCare Investor Audio Conference Series. For more information: (203) 846-6800. |
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