Under Pressure, Providers Go Big on Ancillary Services

Amid pressing business challenges and a changing resident demographic, the senior living industry is increasingly seeking out additional avenues to come out on top, with ancillary services playing an ever-larger role.

These additional amenities and clinical services encompass everything from massage therapy and salons to dermatology and X-rays, administered on site at senior living communities in an effort to serve residents as completely as possible. As resident acuity rises and providers struggle with maintaining consistent occupancy levels, offerings geared toward health care and wellness will become the norm in senior living settings, according to Senior Housing News’ new report, “Inside the Big Business of Ancillary Services in Senior Living.”

The top three ancillary services in senior living typically include home health care, rehabilitation and hospice care, says Maribeth Bersani, COO and senior vice president of public policy for industry association Argentum. Yet providers are taking their services past what might be considered the norm to go above and beyond for their residents.


At Colorado-based Balfour Senior Living, a developer, owner and operator with three communities up and running in Denver, Louisville and Stapleton, Colorado, and another under construction in Ann Arbor, Michigan, ancillary services include daily conveniences and health care options alike. Residents can request extra house keeping, or take advantage of appointments with physicians doing rounds at the communities.

Meanwhile, Fellowship Village, a continuing care retirement community (CCRC) in Basking Ridge, New Jersey under the ownership of Needham, Massachusetts-based senior care company Fellowship Senior Living, brings specialists into its medical center like podiatrists and cardiologists. Presbyterian Senior Living, a not-for-profit provider of retirement and senior care services headquartered in Dillsburg, Pennsylvania, can similarly administer EKGs on site.

A Business Necessity


Beyond the obvious goal of more fully serving residents and their complex needs, ancillary services prove significant business drivers for senior living companies, both in terms of direct revenue and boosting length of stay.

Five Star Senior Living (NYSE: FVE), for example, has decided to go even bigger on ancillary services as it faces occupancy challenges. The company sees the impact of ancillary services directly in its bottom line, as senior living revenues were down on a year-over-year basis in  the third quarter of 2016, but an increase in ancillary revenue offset any major losses.

Balfour Senior Living sees a portion of revenue from its communities’ salons and spas, and Fellowship Senior Living experienced revenue growth upon the introduction of various home and community-based services.

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Direct revenue aside, ancillary services stand to keep residents in communities—and specific care settings—longer.

Across the industry, the average length of stay in assisted living is 22 months, down from 36 months previously, according to Illumination 2016 Analytics’ 10-year analysis, as presented at the Argentum Senior Living Executive Conference in May 2016. That significant decrease is likely because the vast majority of move outs stem from health issues, and annual resident turnover is pressured by a rise in acuity.

Greater lengths of stay certainly benefit senior living communities, both in regard to margins gained and cost savings. A vacated unit, for instance, brings with it costs associated with improvements and repairs, along with marketing the unit to attract a new resident from there.

All things considered, ancillary services have certainly found their place in senior living, and in the future, they’re only going to become more prevalent, diverse and focused on health care.

“There’s a very brig future for good ancillary services in the senior housing market, because residents will need these services,” says Dr. Steven Fuller, vice president and corporate medical director for Presbyterian Senior Living.

Editor’s Note: The full report, “Inside the Big Business of Ancillary Services in Senior Living,” is available here

Written by Kourtney Liepelt

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