There’s been some uncertainty about the future of continuing care retirement communities (CCRCs)—whether they will appeal to the next generation of seniors, or whether their pricing model will deter those potential residents.
In reality, though, CCRCs are likely here to stay, Greystone Communities co-CEO John Spooner told Senior Housing News.
Irving, Texas-based Greystone is a management consulting firm for senior housing providers that offers guidance related to strategic planning, occupancy improvement, redevelopment and expansion, and more.
The question of whether CCRCs will remain relevant has plagued the senior housing industry for decades.
“You hear debates or conversations about that, and they seem to circulate around every few years,” Spooner said. Still, their continued presence in the market suggests that the property type will survive for many more years.
“They’ve just proven themselves as an important, reliable provider of services, care, and quality for 100 years now,” Spooner said. “Their future, in my view, is solid.”
The future of CCRCs might be solid, but that doesn’t mean that changes aren’t needed. Pricing, for example, is an area of concern. Traditionally, CCRCs charge a hefty entrance fee in exchange for guaranteeing residents will be able to live on the campus and receive additional care as their needs escalate.
Some observers worry that CCRCs are not properly underwriting to cover all of their skilled nursing costs for aging resident populations. Others, including Spooner, believe that CCRC pricing models also need to be more consumer-friendly, and this means moving away from fixed-rate pricing toward a more a la carte approach.
“The most compelling trend we see right now among seniors is wanting to control monthly costs,” he said. “Nobody really knows how long they’re going to live, how much health care they’ll need—we’ll probably see more unbundled programs, more programs where fees can expand or contract with care, needs or services, or life phases.”
This trend has already started to catch on. Pleasanton, California-based HumanGood, for instance, is considering abandoning the “one-size-fits-all” mentality that CCRCs have adopted for so long.
“We’ve bundled a whole bunch of services together, offered them as a bundle—but that may not be the most relevant or economically viable thing to do,” HumanGood President and CEO John Cochrane told Senior Housing News in August 2017. “One of the things we’ll be exploring is un-bundled services.”
Spooner also sees some changes on the horizon for standalone assisted living communities.
For instance, to attract future residents who are bound to be older, frailer and have chronic conditions that would traditionally be treated in skilled nursing facilities, assisted living communities will have begin to offer more specialty care.
For instance, Spooner predicts that standalone assisted living communities will start offering specialty programs for residents who have Parkinson’s disease, so that they can be “cared for quite comfortably” in that setting.
“Senior living has long suffered from a reputational downer,” Spooner said. “Nobody gets up and goes, ‘Well gee whiz, that’s the greatest looking thing I’ve ever seen, I’m gonna go move in,’—yet.”
Senior housing still has a stigma, and older Americans tend to be financially unprepared to make the transition, he added. As more housing and care options become available, and as the industry becomes more successful in explaining how and why a person should save for their potential long-term care needs, senior housing will become a more mainstream part of life.
“You’d like [senior housing] to be part of a life phase type of thing,” Spooner said. “There are very traditional life phases—find a mate, have kids, work, kids leave, retire. There’s a void after that.”
Written by Mary Kate Nelson