Senior Living Providers Test New Models with Home-Based Services

As the senior living industry’s evolution continues and the impending “silver tsunami” advances, some providers who are questioning how to stay ahead of the curve are testing new home and community-based business models. 

The 61% of respondents for the 2013 LeadingAge-Ziegler 100 indicating they provide HCBS is a decrease from the previous two years, at 72% in 2012 and 73% in 2011. However, data indicates that as not-for-profit organizations age, the more likely they are to branch into home-based services as a way to extend their missions into the community, the survey finds.

Texas-based The Legacy Senior Communities recently celebrated its 60th anniversary, but a recent move into HCBS isn’t just about fulfilling its mission: it also reflects a belief from the top that today’s senior living stock may be obsolete in 30 years.

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“Nothing’s really fundamentally changed. We build new buildings, make them prettier, we might change some aspects, but the model hasn’t changed. We’re still taking care of people in nursing homes, and assisted living is the nursing home of 15 years ago,” says Michael Ellentuck, president of Legacy. “Eventually we’re going to have to find a different model.”

Legacy has a strong short-term rehabilitation care focus, serving around 2,000 families in 2012. The organization’s decision to get into home care in 2012 was a “natural progression,” Ellentuck says, and Legacy at Home served around 500 families in its first year of existence. The not-for-profit business line is Medicare-certified and is currently seeking Medicaid certification as well. 

As the nation’s senior population continues to expand, Ellentuck is thinking ahead to what hospital systems will be looking for in a post-Affordable Care Act world. 

“They’re going to develop strategic partnerships. Not everybody can do everything, and if you try to, you’re foolish. You have to know what you’re good at and find the right partners,” he says. “The genesis for the [home care line] development was twofold: We discharge 70-80 people a month out of our rehab centers back home, and we felt it would provide a seamless transition to have the same company that has already worked with them, and also make us a more valuable partner as ACOs form.”

Because it can often take months to receive licensure, Legacy at Home earned very little during its first six months of operation. The organization had tapped into the Legacy Foundation to get funding to launch and operate until Medicare reimbursements kicked in. Legacy at Home is expected to break even in 2013, and longer-term, Ellentuck says the goal is to generate revenue as part of its mission to introduce a charitable component that offers reduced or free services.

Fellow not-for-profit Asbury Communities, Inc. recognizes an “ongoing cultural shift” in where services are expected to be provided, says Bill Pickhardt, senior vice president of the organization’s Asbury Home Service. 

In 2012, Asbury launched its HCBS line geared toward people aging in place in their private residences, offering help with meals, home maintenance, housekeeping, and transportation to appointments and other services typically provided in assisted living communities. 

This past year Asbury Home Services has served nearly 340 private duty clients, 20 of whom live outside of Asbury communities. In the span of 10 months, there was an approximately 8% shift to clients outside of a CCRC, says Pickhardt, with a business goal of having 50% of its clients living outside Asbury-operated communities by the end of year three. 

“Everyone thinks of bricks and mortars, but it takes time to become a change agent and think of us outside of the campus versus inside,” he says. “My prediction is, we’re going to see other bricks and mortar trying to reposition campuses as a one-stop shop. We’ll see them marketing themselves as a family of services for seniors, not just as a retirement community campus.” 

Both not-for-profits currently operate within a certain radius of their existing communities with the possibility of future expansion, including into home health for Asbury. Staying within a 10-mile radius of bricks and mortar communities is part of Asbury’s business model, as it’s deploying existing employees out to clients’ homes. 

Legacy views itself as a regional home healthcare company with possible new locations in Houston, Fort Worth, or San Antonio, says Ellentuck, while Asbury is open to considering acquisitions in strategic locations and expanding its employee pool as its client list grows. 

A lot of organizations will likely start marketing campaigns to break down the perception that their CCRC is only for the wealthy, Pickhardt predicts. “We’ll start seeing them position themselves as mid-price point, or a flexible organization that has services for the aging at all income levels and locations,” he says. 

“If folks are not already in the space, I expect them to get into it,” he says. “The question is, do they do it organically, look to acquire, or partner? It’s probably going to be a combination based on the organization’s cash position and appetite for risk. Our business model is that home care is the future, and who knows how many bricks and mortar communities will be built 25 years from now. We want to serve our internal residents as well as focus on external residents.” 

Written by Alyssa Gerace

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