Founded by a former Pennsylvania governor during the early days of senior living, Country Meadows Retirement Communities is evolving to meet current operating challenges and future demand while maintaining its market share in an increasingly competitive environment.
The Hershey, Pennsylvania-based company has just launched a hospice business branded as Lifesong Hospice and Palliative Care, is exploring Medicare Advantage plays, and is investing in a workforce training and education company it owns, CEO and President Michael Leader told Senior Housing News.
All the while, it is sticking with a time-tested senior living model that has held up in the face of new supply, he added.
The company’s portfolio consists of 11 locations across Pennsylvania and Maryland, with roughly 2,200 total units. All its communities were ground-up developments and offer a continuum of care, although only one is an entrance-fee continuing care retirement community (CCRC). Typical rents are market-rate, but not at the highest end of the spectrum, Leader said.
Leader’s father, George M. Leader, served as Pennsylvania’s governor from 1955 to 1959. He then entered the skilled nursing industry before going on to found Country Meadows. After retiring from Country Meadows, he started a separate senior living company, Providence Place, which today has a six-property portfolio, has its headquarters near Country Meadows’, and is led by Michael Leader’s brother, David Leader.
The deep roots in this region and consistent, family ownership have created competitive advantages for Country Meadows, Michael Leader told SHN.
The following interview has been edited for length and clarity.
Not every senior living company was started by a former state governor. Tell me how Country Meadows got started.
We’ve kept a fairly low profile because we’re, by choice, a regional company. But we’ve been around for 35 years.
My dad got interested in aging services when he was in government back in the 1950s, and actually established the Pennsylvania Commission on Aging to study the senior population in the state, which is one of the largest in the country, and to design programs that engage senior citizens.
When he left office, he got involved with a guy named Fred Diamond, who was establishing nursing homes out in California in the late 1950s, early 1960s. [My dad] flew out to California and visited some of them. He thought it was the next wave that was going to blanket the health care industry.
We started out, in the family, in the skilled nursing field in 1962. [My dad] had been in mortgage banking, and he started by helping to arrange a loan to somebody who wanted to buy a nursing home, and he ended being the silent partner to this guy. It turned out that the man, who advertised himself as a health care professional, an administrative professional, wasn’t very good at managing. The company by then had three nursing homes and was on the brink of bankruptcy. My dad said, “Well, either you have to buy me out, or I’m going to have to buy you out.” And the guy said, “You’re welcome to buy me out.”
For the next 18 years, we grew to 20 nursing homes. We joined a Midwestern company, which literally within months was subject to an unfriendly takeover offer, which landed us right smack dab into ManorCare.
Within a year and a half, both my dad and I left that company, and the rest is history. We launched Country Meadows at the nascent start of the assisted living industry in the early 1980s. We were really interested in working with a population that was healthier and better able to benefit from some of the programs that we offered them, to stay intellectually, physically, socially health and more active and independent.
Did your dad’s political skills or connections come in handy in senior living?
He was the second-youngest governor in Pennsylvania history. By the time he left office, he was just 41 years old.
But he loved [senior housing and care], and I think that was reflected in the fact that when he “retired” at 80, he started another company. He loved to build. He wanted to provide as much value for our residents as he could, in terms of better physical health, the ability to be independent longer, to maintain self-esteem, and activity level. He drove his car until he was 95, went to the office every day, drove out to visit his facilities on a weekly basis.
He had run for US Senate after he was governor and he lost. As we look back on that, we — his kids — think it was a blessing, because he found so much joy in this industry that he wouldn’t have had, because being a senator is very different from being a governor. Being a governor, you’re initiating things all the time … He loved being the CEO and making decisions and building new buildings and helping to design them, so it was a great profession for him following his political career.
Today, all 11 Country Meadows communities have a continuum of care, with independent and assisted living, and memory care?
Yes, and we have an [earlier stage] memory program, which we call Connections Club, and our Connections program is the secure memory care.
We were the first company in the United States to be an approved Validation organization. Validation is a method of working with people who have dementia that trains staff to help reduce frustration and anxiety. We train outside organizations as well.
What are some of the key components of that method?
The old technique used to be reality orientation, reminding residents where they were, what the day of the week and month of the year is, so forth and so on … [Now], we don’t say, “Your wife died three years ago, Mr. Leader.” We say, “You and your wife were really close, weren’t you? What do you miss most about your wife?”
So, you don’t try to correct them as much as understand them and bring them a more positive conversation, which can distract them from frustrating thought processes as well as sometimes the physical challenges that go with it.
Did Country Meadows always offer a continuum of care?
We didn’t have the continuum at the outset, but we built our campuses in modules, and as time went on, we saw that some people needed additional memory care, and that they didn’t fit so well in with the people who didn’t need memory support. At that point we started designing accommodations, apartments, and neighborhoods that were appropriate for them … and we eventually then worked our way into having multiple neighborhoods.
So, now we have independent living neighborhoods, personal care neighborhoods, we have a restorative program called Pathways, and Connections secure neighborhoods, but basically we have four different levels. Our campuses average about 230 beds, so we have larger than average campuses.
Is Pathways a rehab program?
It’s a couple of things.
We have a program that we call Progressions, which is a transitional program for people coming from the acute care hospital or acute care rehab, so if they need to extend their rehabilitation stay, we can take them for two to eight weeks and continue them in our rehabilitation program, and make sure that they have the strength and the mobility and flexibility to return home safely.
The other part is for people who need more extended restorative care or continuing restorative care — people with residual paralysis following a stroke, those with a progressive neuromuscular disease.
I’m proud to say that we have added, within the last year, a certified program called Delay the Disease, developed by [nonprofit health system] OhioHealth, for Parkinson’s patients.
Exercise has always been part of Parkinson’s treatment, along with medication, of course, but this program was developed by physical therapists and neurologists to extend physical exercise and add a neurological component to it, so that when you’re exercising you also do some mental challenges. In a very simple fashion, it’s like if you’re doing some exercise, you also at the same time count backwards from 100 by 2, so you have to think.
It’s been proven that this actually can delay the disease, that’s why it’s called Delay the Disease.
Is the Progressions rehab reimbursed through Medicare? Do you see rehab patients becoming residents?
The therapy is all paid for through Medicare Part A or Part B. They pay their room and board out of pocket.
Half of the people who come in through the Progressions program stay with us permanently. That’s one of the reasons we do it. They move into an assisted living or even an independent living bed after they complete their [rehab] … And sometimes they go home and they say, “I was better off back there,” and they come back. But overall, we track this population and about half of them eventually end up as residents.
Do you have skilled nursing on any of your campuses?
On one, our Bethlehem campus in Eastern Pennsylvania. Typically, Genesis Rehab Services provides all of our rehabilitation on every campus. We have a partnership with Bayada for home health, so they can do some things, including behavioral health and some skilled nursing treatments. We’re developing a partnership with a chronic care management medical team on some campuses.
We’re looking for partners who can add value to the assisted living services that we provide, the base services.
Are any of the campuses CCRCs with an entrance fee?
The one with the nursing center is technically a CCRC, but it doesn’t have a large entrance fee.
Pennsylvania has a lot of CCRCs, so how you stand out from the crowd? Is this one way, by offering a rental model and a lower entrance fee at your one CCRC?
Yes. But it’s about bringing people to your campus to show them what you offer, and we think that this helps to increase the traffic and the flow to our campuses. We can offer a modest CCRC contract to people if that’s what they choose, but most of our customers even on that campus are fee-for-service.
When did the newest Country Meadows building open?
We opened a new building two years ago. Our Forks Campus. It’s near Easton, in the Lehigh Valley region.
How full is that building?
It’s leased up. It was filled within nine months.
Any plans for other new development?
Right now, we’re focusing on launching our hospice program. We are just taking our first patients into our company’s new hospice and palliative care program, and we’re looking forward to rolling that out in the next couple of years throughout Central Pennsylvania.
Six of our campuses plus two of the Providence Place campuses are within, I would say, a 50-mile radius, and we would like to serve those campuses with this program and then eventually branch into our other campuses in the Lehigh Valley.
Why does now seem the right time to start a hospice?
Some hospices do a good job, that we work with, but some don’t do a very good job, and we think that our residents will want to continue to be served by a Country Meadows-owned staff that understands our culture and our philosophy and will be able to coordinate closely with the caregivers who’ve been taking care of them during their stay with us.
We have established a separate office for the hospice company in suburban Harrisburg, in Hershey, at a nexus of several interstates where they can go in multiple directions easily. So, it has its own staff of about eight people, its own office. They are now temporarily licensed by the state of Pennsylvania. You go through caring for some patients, then you’re inspected by the state to see how well you did that. If you did that sufficiently well, then you get a permit license, then you can apply for your federal license and apply to CMS to be approved for reimbursement. So, it’s a process that takes several months to achieve. Initially, you’re working without any reimbursement until you get approved by CMS as a federally licensed hospice company.
As you go through this process before getting reimbursement, are you eating the cost?
We’re eating it. Hopefully, you make it up. It’s part of your investment and establishing it. It’s like building a new campus for $25 million or $30 million, you have to put the money up before you begin to make dollar one.
Do you have other sources of revenue, outside senior living and hopefully hospice?
We have an educational company. Argentum’s predecessor — which was ALFA, the Assisted Living Federation of America — started an educational company, which it called Assisted Living University. It was the first and oldest provider of educational materials to assisted living providers, and they did them on VHS tapes.
Along the way, the name changed to Senior Living University, or now SeniorLivingU, and eight years ago we acquired this. Country Meadows operates it under that name, SeniorLivingU. We use it for our own internal training of coworkers at both Country Meadows and Providence Place, but we sell training materials all over the country, actually internationally. There’s online training and DVDs.
That has fit one of our corporate goals, to help the industry be as good as it can be. Training is so critical that we are investing to develop materials that we think can do better than what’s out there now to train people, especially in the communities where they don’t have the resources of the large conglomerates to have their own training department.
Speaking of workforce training, staffing seems to be the No. 1 challenge facing providers these days.
I would agree with that. It’s very, very challenging, and we’re looking under every stone to find good people. We’re fortunate in that 65% of our coworkers have been with us for at least a year, and our turnover is among the lowest in the industry, but it’s still too high.
We try to have a career ladder in each of our job categories. The educational arm of the company, SeniorLivingU, plays into that, to give people the skills that they need to advance in the career ladder and make more money.
We also have a liberal nursing scholarship program, which is not uncommon in the industry, but we have, probably at any given time, 15 or 20 coworkers who are in LPN school or who are LPNs who are moving to get their RN degree. That’s another way of retaining good people.
Years ago, when I was in the nursing home industry, one of my fellow operators said, “Turnover is good. We hire people at the entry level and that keeps our wages down.” People aren’t saying that anymore.
Another trend is increasing integration with other types of health care providers and payers. Are you talking to health systems or thinking about Medicare Advantage?
Yes and yes.
I have to say, even for a company with some substance like ours, it hasn’t been easy to integrate with hospital systems, major health systems. They seem to be, at least around here, so consumed with figuring out their own future that they’re not that interested in engaging with us. We talk to them, but they don’t have great ideas at this point.
The Progressions program is something that they have related to, because it helps to channel people out of the hospital and give them some additional support, especially the ones that they think may have some challenges before they go home, or when they go home, so we help to get them prepared to go back to their home independently.
But we are looking at Medicare Advantage. We’re studying it, we’re looking for potential partners to work with that on.
Are you looking at existing MA insurers to partner with, or senior living partners to start your own plan?
We’re looking at both. We’re keeping our powder dry. We’re talking to plans that are in development, and we’re learning more about what it takes to develop our own plan, but my intuition is that we’re not quite large enough to be our own plan. It seems that a minimum size for plans is around 5,000 participants, and people have the choice of choosing whatever Advantage plan they want to be in, and the insurance companies here in Pennsylvania are marking the heck out of theirs. So, I know we wouldn’t get all of our residents in the plan. I think it’s probably going to be a collaborative effort with some other quality providers. But we’re still studying how to go about it.
It’s also an expensive process. There’s a major investment on the part of participants to start a Medicare Advantage plan, and you have to have a substantial fund to be able to pay for the cost of care if the reimbursement you receive from Medicare is not enough to cover the cost of the care that your clients need.
Oversupply is another challenge these days. Are you seeing new competition?
Yes, capital still seems to be flowing into Pennsylvania. When people see the high number of seniors here, the aging of our state population, especially 85-plus, and they see the statistics on baby boomers getting older, they salivate, but some of them are salivating without much in the way of facts, other than a very cursory reading of what’s happening.
They didn’t read the economic trends of baby boomers, and the fact that their savings are not as robust and their retirement plans are not as robust as the previous generation. They [should] know that this is not a bottomless pit of people just waiting in line to get into assisted living communities.
Say somebody comes to me and says, “Did you see the article that so-and-so is going to build a new community within a half mile of our campus?” There’s a quiver in their voice. I say, “Well, which would you rather be? Would you rather be Country Meadows with a best in the class reputation and a brand that’s known throughout the region for the last 15 or 20 years, or a company coming to the market for the first time, with a name that’s unknown, with a headquarters in another state, and a management company different from the ownership company?” And I think they get the point.
We have to trade on the quality of our care and the reputation that we built carefully, success by success.