There’s a tremendous—and growing—market for memory care in the United States, as the number of Americans age 65 and older with an Alzheimer’s diagnosis is projected to increase from 5.1 million in 2010 to 13.5 million by 2050, according to estimates from the Alzheimer’s Association.
With mounting demand, memory care provider Silverado Senior Living is looking to meet those needs and is expanding its company presence by developing several new locations across the United States. Senior Housing News spoke with Silverado’s co-founder and chief executive officer, Loren Shook, to find out more about his company’s development plans, how they’re financing their projects, and what sets them apart from other memory care providers.
Senior Housing News: What’s your attitude and outlook on the need to develop memory care communities?
Loren Shook: We’re expanding our company; we’re adding communities in a number of markets. We’re in the process of adding six communities right now.
There are needs in various markets for good, high-quality memory care services. We see a need for free-standing memory care services that are dedicated specifically to serving those people with memory care services, with a staff that understands the complexities and different diagnostic groups, and what their needs are.
There are a lot of small units of memory care in assisted living settings. Those are good, and are meeting earlier stages or memory disorder needs; there’s a certain market where that exists.
But there’s another market of people that have very significant problems that develop, and they have behaviors that come from that. Unfortunately what happens in a lot of markets is those people get medicated. The thinking is that it’s necessary, that it’s part of the disease. But that couldn’t be further from the truth. That’s wrong.
As we grow our company, we take our model that reduces the use of psychotropic medications by about 35%. With our programing and expertise, we provide a better quality of life for them, and it helps slow the progression of the disease, which we understand can’t be completely stopped.
SHN: Can you talk about your recent partnership with Meridian Realty Advisors?
LS: We’re happy to have a partnership with Meridian. We’re developing several communities with them; one in Onion Creek, in Austin, Texas just broke ground.
We’re looking to develop five communities in the near future with them where we manage them, we’ll mature them, fill them up, then purchase them with our Health Care REIT/Silverado joint venture. We look forward to doing that with other equity partners for whom we manage for, as well.
SHN: Why are you using Meridian as a capital partner, if you have a REIT relationship?
LS: We are doing some development with the REIT, such as a turnaround opportunity in Lake Zurich, Ill. [with Health Care REIT]. We turned it around and we’re filling it up; we’ll sell it to our REIT joint venture. The Naperville [Illinois] and Brookfield, Wisconsin communities are under our partnership with the REIT, too.
They generally have the appetite to do a certain number of ground-up construction, but only have a certain amount they’re interested in doing. By going to other equity sources or other partners like Meridian, we’re able to expand our growth footprint.
SHN: What other projects do you have in the works?
LS: We’re planning to add three to four communities a year. It’s pretty safe to say we’ll be on that track, with the combination of ground-up construction, taking over management deals for other companies, and us acquiring “problem” locations, like the Lake Zurich acquisition.
We also have hospice and home service line, which started in 2004. Our home care service is a private pay model; it’s not a Medicare or home health model.
We take a different approach: We have life care managers. It’s a masters-trained individual, a geriatric care manager. They help family through process of the disease; creating a treatment plan through assessments and diagnoses, and coordinating what they might need.
SHN: How is your care approach different from others?
LS: Out of people in senior living communities that pass away, maybe 25% of them are on hospice care when they pass away. In nursing homes, it’s less than 5%. At Silverado, it’s north of 80% [of our residents] on hospice care, which is an enormously important statistic in facilitating people to have what we call a “good death.” That’s when families are brought together, loose ends are tied up in terms of the person passing away, and they’re prepared to pass on. It’s helping them transition their spirit from this life to the next.
Hospitals definitely care about readmissions. When someone’s in hospice, they’re not getting admitted [to the hospital]. Silverado is very appealing to hospitals and professionals, as they and physicians will get penalized for rehospitalizations above a certain benchmark. This is a really critical component; it’s a piece of what I’m talking about relative to a specialty, standalone memory care community.
By definition, we’re getting the toughest cases. We can tell you that our readmission rate, due to behavioral health, is 5%. That’s an incredible number given how we serve people. That is very appealing to IPAs and hospitals relative to the ACO world, and physicians as well for getting more referrals.
SHN: How do you see senior living and care communities evolving to meet the needs of a growing memory care population?
LS: In the past, there was not a very high expectation for memory care; it felt like people with memory-impaired diseases were not treatable, that you couldn’t improve their quality of life. People basically expected to go to institutional setting and be medicated; you just try to send them to the best place to keep them clean, dry, feed them well, in a place that didn’t smell. That was as good as it gets.
Thankfully, the world’s changed. At Silverado, our families will talk about us being an incredible party place. We’re like party animals. We’ve created a place that people never dreamed possible.
Some thought that wasn’t possible, but we’re able to take our residents to [sporting events]; we have residents who organize volunteer groups. They’re going to the beach, going to the hospital to give blankets to kits. We give our residents purpose.