Senior housing operators might have a humility problem.
Namely, they pride themselves on managing nearly all aspects of a community in-house, when a partner might do a better job in certain areas, said Robert G. Kramer, founder and now strategic advisor at the National Investment Center for Seniors Housing & Care (NIC).
More providers have realized the value of partnerships in recent years, but this should still be an area of focus, Kramer said last week at the annual PointClickCare SUMMIT in Orlando, Florida.
This is not the only tip that Kramer and other industry experts offered. Providers need to figure out a way to offer a more affordable product or have their hands forced, while focusing on great leadership should be a top priority in the face of continuing supply challenges.
Middle-market a must
It’s been clear that affordable senior housing options are in extremely high demand. Not meeting that demand quickly enough could negatively impact the entire senior housing industry in more ways than one.
For instance, failure to actually create a viable middle-market senior living product could realistically result in “really draconian set-aside requirements” imposed on senior living providers nationwide, according to Kramer. Set-aside requirements refer to the number of units that communities must reserve for lower income residents.
“Mandatory set-asides will happen in every state in the country if we don’t step up,” Kramer warned last week at PointClickCare’s 2017 SUMMIT in Orlando, Florida. Some states, like New Jersey, already have affordability requirements in place.
Nowadays, partnering with ancillary service providers—whether to offer residents salon services, wellness treatments or other perks—is fairly common among senior housing operators. But that hasn’t always been the case.
“Three or four years ago, it was build it in-house or acquire [an ancillary services provider],” Kramer said, noting that these types of partnerships used to generate “a lot of suspicion” among senior housing companies.
“I think partnerships are much more prevalent today,” he said.
It’s possible that more senior housing providers have admitted that they aren’t necessarily the best at all things.
This took longer than it should have, Kramer implied.
Humility is “one of the great challenges… of many operating companies,” Kramer explained. “It’s very hard [for senior housing providers] to be good at all the differing skill sets required now across the board.”
When they’re done well, partnerships with ancillary services providers can actually enable senior housing providers to achieve a deeper penetration in their markets, as well as increased credibility within those markets, Kramer added.
All the while, it’s critical that senior housing providers choose their partners well. Failure in this regard could wreck an entire provider’s reputation rather quickly, according to Sunrise Senior Living Vice President of Operations and Systems Marty Damian, who also spoke at SUMMIT.
“The moment that I have a partner who doesn’t live up to my standards is the moment that my brand is tarnished,” Damian explained. With the help of shared data, Damian said, Sunrise can immediately know whether or not its partnerships are proving beneficial and whether they should be renewed.
“Because I collect that data, I can see what’s working and what’s not,” he said. “It’s okay to challenge the vendor and push that vendor out.”
Think like a local
The emergence of new competition—and especially the construction of new, shiny buildings—can make even the most seasoned senior housing providers nervous. Still, communities with exceptional leadership have little to fear.
“You can have a great ED with a much older building and a poor location, but word gets out,” Kramer explained.
“It’s great to have a new building, but new buildings really only last for a few months,” he said, adding that communities can be “old and horrible-looking” but still attract local residents if they are “clean and provide good care.”
Communities, in other words, need not fear new competition if they have a great leadership team in place at the local level. That’s something every provider should look into when a competitor enters their marketplace.
“Reputations are made and burned locally,” Kramer explained.
Written by Mary Kate Nelson