Similar to the saying, “If the mountain will not come to Mahomet, Mahomet must go to the mountain,” the senior housing industry is increasingly finding that if older adults don’t want to go to senior living communities, it’s going to need to find ways to bring its services to the senior.
Consumers as a movement drive the senior housing business, and their wants and needs are changing considerably. This is forcing the industry to evolve as well, said a healthcare consultant at a session during Life Services Network’s annual meeting and exhibition, held in Chicago, Ill.
Most people, when asked, don’t think they’ll move into a retirement community because they don’t want to leave their current home, said Andy Edeburn, Health Care Consultant at Minneapolis, Minn.-based consulting firm CliftonLarsonAllen LLP. Though boomers are beginning to retire, they’re not exactly picking up and moving: just 16% of respondents to a 2012 MetLife survey on how boomers are transitioning into retirement said they planned to move from their current residence, while 83% had no plans to do so.
“The market for us is people who want to stay in their own home,” Edeburn said. “The reality is, the aspect of the argument [that it’s socially stimulating to live in senior living communities] is changing; the boomers are not like the customers we serve right now.”
Business model is shifting toward home & community
Boomers are more vocal, and adapting the industry to the customer is key, Edeburn said. Current care models have largely evolved out of nursing homes, but that’s not what consumers want; the industry needs to re-envision the way it delivers housing and care.
Keeping up with popular consumer sentiment, there’s a political trend toward home- and community-based services (HCBS).
“Right now, political winds have changed, and it’s politically savvy to re-appropriate funding for home and community care settings,” said Edeburn. While there’s a stigma that it costs more to care for someone at home, technology is going to make it easier to proactively—and cost-effectively— manage patients in home settings, he added.
For senior living providers with traditional communities, it could be a good idea to develop some sort of HCBS system, whether as a stand-alone business, or as a feeder product, the consultant advised.
Providers who are getting into HCBS options are recognizing it as a service opportunity, especially considering the two ways to grow market share: Go out and steal it, or buy it up through acquiring another company.
But if current senior living providers do this, they’re going to have to adjust their mindset.
“Operating a home health agency through a nursing home lens does not work. It’s a totally different mindset to operate a HCBS product than an institutional practice,” Edeburn said before advising providers to look for professionals trained in home- and community-based services rather than going with a former nursing home administrator who’s relying on past experience.
Look for greater segmentation
Right now, senior housing and care is roughly divided between three segments: independent living, assisted living, and skilled nursing (many of which also offer memory care). But look for a broadening of the continuum, Edeburn said, as greater segmentation emerges to follow people’s desire to age in place.
Instead of a three-tiered model, Edeburn thinks the continuum will end up looking more along the lines of co-operative housing–>independent living apartments–>housing with services–>catered living–>assisted living apartments–>skilled nursing, with even more nuanced variations of senior living and care along the continuum, including short-term rehab or long-term acute care.
“It’s not going to be the same product that we’re serving the current generation,” he said.
The boomers are coming! …but not for 10 years. (Or more.)
Despite all the hype about the impending silver tsunami, the leading wave of the boomers won’t hit for 10 more years, Edeburn pointed out, and besides, considering declining home values, lack of savings, and less time to recover financially, boomers might not be the industry’s next big customer.
“Senior consumers, as buyers, are challenged,” the consultant said. And exacerbating the problem is that many seniors are subsidizing adult children who have been impacted even more by the Great Recession.
Ultimately, rather than eagerly awaiting the boomer generation, he said, the industry might want root for an economic recovery.
Written by Alyssa Gerace
Do you have comments or differing views? I’m interested in writing some follow-up articles based on the concepts and ideas Edeburn presented, but I need more perspectives and outlooks. Email me!