Senior living providers exploring ways to drive revenue through expanded service offerings may consider adult day health programs to be a natural progression into a new product line, but their benefits are derived more from marketing value than up-front revenue production.
CCRCs are generally looking for two things, says Brian Schiff, senior vice president at Greystone Communities: The ability to improve overall revenue, without having to necessarily raise costs on existing residents exceeding ordinary adjustments, and to have more doors into the community at large.
“The things you want in adult day health—good activity programs, transportation, dining programs—are all things that already exist, and the community typically has spaces that can work for it,” says Schiff. “In terms of who we serve, it’s a very natural progression into a new product line.”
Nonprofit providers in particular whose mission it is to serve more seniors and invest money to serve populations in need can find adult day health to fill mission criteria. Additionally, it can be viewed as a marketing opportunity, he says. With more people introduced to a senior living community, their use may expand beyond day services into healthcare needs, and it could be a natural next step to look into moving into a CCRC’s assisted living or perhaps even skilled nursing unit.
However, it’s a “fallacy” to believe an adult day health attendee will move into independent living, Schiff says. “It’s not really a precursor for that, although it can be a precursor for healthcare services,” he says.
Starting a program is no bed of roses, and Schiff says there are several places where providers can often underestimate challenges and costs.
For Greystone, which works with a few communities that offer adult day health, one such area was transportation.
“Many of these folks don’t have transportation easily available to them to get to the community,” he says. “Their caregiver needs to be at work at 8 a.m., the adult day health center may not open til 9 a.m., so we have to use our bus to pick them up.”
That issue ties in closely with the next one: hours.
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“People need more flexibility in the hours [of the program] than we would have anticipated going in,” says Schiff. “We originally envisioned our hours as a morning program, maybe 9 a.m. to noon. Then, it turned into nine-to-five. Now, we’re finding we need the ability to take people even earlier—say, 7 a.m.—and keep them later, til around 7 p.m., to fit the needs of the caregiver.”
Extended hours brought about other issues on the dining side. Expectations shifted from providing a snack in the morning, to providing snacks in the morning and afternoon—along with breakfast, lunch, and dinner.
Another thing to consider is the range of needs of the people attending adult day health programs.
“We’re used to a moderately homogenous group in independent living who are able to do most things for themselves,” says Schiff. “When they need assistance, then they move to assisted living, or if they have memory impairments, they go to memory care.”
The adult day health group cuts across that entire swathe, says Schiff. “You can’t just program for independent living—you have to think about developing individualized programing for a group of 15 to 25 people whose needs are much broader.”
Because of the range of needs, pricing is generally “all over the place,” he says. “The best success we’ve had is to treat it like assisted living and have a base price plus level of care on top of that.”
Community residents can pose another challenge, as some may object to bringing in “outsiders,” he says, emphasizing the importance of good communication with existing residents.
Bottom line: While many areas have a need for adult day services, it’s an extremely sensitive market, says Schiff, and providing them won’t necessarily be lucrative in terms of income.
Schiff couldn’t share any hard numbers for the communities Greystone works with that have such programs, but he did say that running an adult day program does function as a community benefit and effectively as marketing dollars.
“If having a program allows me to be one bed fuller in assisted living, because it acted as a front door to that, then that one full bed is worth $50,000 a year to us,” he says. “That certainly makes a difference in terms of how you’d look at the income of adult day health. We don’t look at it as a stand-alone business, because doing that we’re not going to show it making money.”
Written by Alyssa Gerace