CHICAGO — For decades, the senior living industry catered to the business of wants, building on lessons from the hospitality industry in offering comfort, ease and fun. But only 10% of Americans have an interest in senior housing, according to one industry expert.
“You’ve invested in your physical plants and your social programming, and it has worked. You all have buildings filled with seniors who have chosen your communities for a sense of purpose and lifestyle that they desire,” said Caroline Pearson, executive director of the Peterson Center on Health Care, who presented a NIC Talk on combining housing and healthcare during this week’s 2023 National investment Center for Seniors Housing & Care Fall Conference, which wrapped up Wednesday.
But surveys show that 88% of Americans want to age in place in their homes. And today, most middle income adults can’t afford assisted living, and they are not inclined to stretch their budgets for lifestyle, community or bocce ball, according to Pearson, who was the lead author of the 2019 Forgotten Middle study by NORC at the University of Chicago, which was funded by NIC.
Unlike the housing industry, the healthcare industry catered to medical need at the exclusion of customer experience, convenience and service, she said.
“What this dichotomy ignores is that as we age, these two areas converge,” Pearson said. “What we will need and want more than anything is to be safe, to be well, to be cared for, not to be a burden on our families, and to have good, easy access to medical care.”
It will take a change in priorities to get that 88% of people to leave their homes for senior housing, she said, and it will take an understanding that what they want is also what they need.
Senior living operators, Pearson said, already are seeing “acuity creep” and are taking care of people who are older and frailer than those living in the greater community. Residents are twice as likely to be hospitalized, they are in need of assistance with activities of daily living, and they are more likely to have cognitive impairment, she said.
“These are health and medical needs you are dealing with in your communities every day,” she said. “Embrace them.”
The number of middle-income older adults will double in size from 8 million today to 16 million by 2033, and 72% of them will not be able to easily pay for assisted living, Pearson said. If they sell their homes and get help from their families to make a move, they aren’t going to do it for community or a sense of purpose, but because they need it, she added.
“Over time, their priorities will shift, whether it’s gradually or suddenly,” Pearson said. “This means a holistic rethink of how housing and healthcare can be combined in a truly integrated and holistic fashion.”
Partnering to boost margins, resident well-being
Providers have options for integrating healthcare into housing, including providing onsite nurses who can serve as a conduit between residents and their care teams, using retail clinics that can be a first point of medical service for residents and the greater community, offering nursing and personal care services to get over the hump of any required service hour minimums, and providing virtual and digital care.
Medicare Advantage plans, which she said spent $3 billion on resident assessments last year alone, are another way for senior living providers to integrate healthcare into their offerings. Pearson said that Medicare Advantage plans are sending people into member homes to record all of their healthcare needs, connect them with providers, and support the plans’ risk adjustments and quality improvements, which generates revenue.
“There is money to be had in Medicare Advantage. They want eyes on members. You live with their members,” Pearson said. “Invite these partners into your communities, and find creative ways to work with them to both help them achieve their healthcare goals and your residents achieve their wellness goals.”
Risk-based providers are the fastest-growing segment in all of healthcare, she said. They, similarly, are contracting with a variety of community organizations to support the needs of the aging population outside the clinician’s office, Pearson said, adding that senior living providers can partner with those risk-based providers and tap into the resources the healthcare community has to offer.
Integrating healthcare in housing, she said, supports continued growth and profitability for operators.
“At the end of the day, that’s what will serve your current residents. It’s what’s going to attract new middle-income residents into your properties, and it’s what’s going to create a valuable business proposition for you to offer to the healthcare community,” Pearson said. “At the end of the day for older adults, healthcare is not just what they need. It’s also what they want. And that makes all the difference.”
