Memory Care Pioneer Arden Courts Modernizes as Part of ProMedica, Welltower JV

When former President Ronald Reagan announced his Alzheimer’s disease diagnosis in November 1994, clinical studies geared toward finding a cure for the disease were in their infancy, and long-term care facilities were mostly focused on treating residents in the early throes of cognitive decline.

It was in this environment in which HCR ManorCare opened its first Arden Courts memory care community, in Potomac, Maryland. As more types of dementia have been identified, the Arden Courts brand has grown to 55 communities in 11 states, cared for over 43,500 residents, and many of the programming and design features it pioneered over 25 years ago are now commonplace within the industry, HCR ManorCare Vice President/General Manager, Assisted Living Mark McBride told Senior Housing News.

2020 is shaping up to be an important year in Arden Courts’ evolution. HCR ManorCare, the second-largest post-acute and long-term care provider in the U.S., filed for bankruptcy when it was acquired by non-profit health care system ProMedica for $3.3 billion in April 2018. Three months later, ProMedica and health care real estate investment trust Welltower (NYSE: WELL) closed on a $4.4 billion joint venture. All three companies are based in Toledo, Ohio.

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“[The Welltower-ProMedica JV] is a game changer and opens up a lot of different avenues,” McBride said.

While Arden Courts has been hit by the wave of new memory care competition in recent years, occupancy is trending up, capital is being allocated to upgrade buildings, and measured new development is on the horizon.

Pioneering design and programming

Arden Courts was among the first purpose built standalone memory communities to feature a small-house design, and consulted with several health care experts including Johns Hopkins University on preferred design and programming.

Our communities are built so that the environment itself is a program.

HCR ManorCare Director of Executive Learning, Assisted Living Pauline Coram

A typical Arden Courts community features four themed houses under one roof, each house containing between 14 and 16 residents at one time. These houses have dedicated living rooms, kitchens and pantries, dining rooms and bathing areas, and connect to common amenities such as arts and crafts rooms and studios off the court area, HCR ManorCare Director of Executive Learning, Assisted Living Pauline Coram told SHN. The design evokes a home-like environment, and the smaller design provides less negative stimulation and distraction, reducing the odds of residents becoming agitated.

“The smaller design makes [Arden Courts] feel more comfortable and comforting to residents and their families,” she said.

The home-like design allows caregivers to develop routine-based schedules such as set meal, social interaction and bedtimes to reduce the frequency of negative behaviors, foster deeper relationships between residents and caregivers, and allow caregivers to identify changes in residents’ behaviors sooner.

Arden Courts’ communities contain 12 exit doors, which are never locked and provide access to an outdoor courtyard. This allows residents freedom of movement between their living quarters and the outdoors, effectively using dementia patients’ tendencies to wander as part of their treatment.

Throughout the courtyard are areas with activity prompts for residents. A patio may contain a broom and a note to sweep it. Another area may include a wheelbarrow and potted plants, with instructions to arrange the plants in the wheelbarrow into a pleasing design.

This freedom of movement is also intended to reduce the possibility of resident agitation, and McBride calls the courtyards the most important component of Arden Courts’ design.

“Imagine being in an empty shopping center. You reach a door and your instinct is to be on the other side, but you can’t exit because it’s locked and you begin to panic. Here, we’re providing residents with the ability to de-escalate on their own,” he said.

To assist in wayfinding, Arden Courts’ houses are color-themed, and residents have shadow boxes next to their living quarters with visual cues that they are home.

“At Arden Courts, our philosophy of care speaks to the design and environment. It supports individuals with dementia. Our communities are built so that the environment itself is a program,” Coram said.

Over the years, HCR ManorCare has retrofitted the living rooms of some Arden Courts communities with Namaste Care, a program for treating residents with advanced dementia through touch and sensory stimulation. Arden Courts was one of the first memory care brands to implement adult Montessori classes, which focus on what a person can do, McBride said. Residents who do not want to participate in either have the option to engage in individual pursuits.

Modernizing and expanding the portfolio

With the Welltower-ProMedica JV in place, HCR ManorCare is turning its attention to modernizing the Arden Courts portfolio in the face of more competition, selecting sites for new developments and exploring partnerships with other organizations on dementia research. This is part of $400 million in CapEx investment ProMedica has pledged to invest across the HCR ManorCare portfolio over the next five years.

The overall goal of the ManorCare acquisition is to enhance care while lowering costs by giving ProMedica more direct control over the large population of high-risk seniors residing in ManorCare’s skilled nursing facilities and the Arden Court communities. The organizations have been tight-lipped about specific outcomes achieved so far, but Welltower Executive VP and Chief Investment Officer Shankh Mitra is “pleased with the investment” and believes the total forward IRR has “materially improved” since the deal was inked, he said on the company’s Q3 2019 earnings call.

ProMedica and HCR ManorCare are working to merge the two systems’ cultures into one organization. McBride noted that everything seems to be meshing well so far, and HCR ManorCare is in talks with different aspects of ProMedica’s business lines about where and what the Arden Courts brand can enhance as part of the ProMedica platform. For the time being, however, Arden Courts will operate as its own assisted living brand.

“[The Welltower-ProMedica JV] is a game changer and opens up a lot of different avenues.

HCR ManorCare Vice President/General Manager, Assisted Living Mark McBride

That said, a capital expenditure strategy is underway to modernize the design features of Arden Courts’ communities. The newest facility, in Easton, Pennsylvania, was completed in 2015. An initial focus will be on changing the color themes of the individual houses from bold primary colors to softer, muted themes. HCR ManorCare will also change out furniture, as well as change the programming of the porch themes based on the census and age of its residents.

“We all love Frank Sinatra, but we need to realize that some of our future residents were raised on classic rock and we need to accommodate that,” Coram said.

Renovations will be done on a continuous, case-by-case basis, based on need and priority. They come as the senior care industry has increasingly prioritized memory care in recent years, which has impacted Arden Courts’ occupancy rates. Occupancy rates across the portfolio range between 80% and 90%. On average, seven new memory care communities have opened in Arden Courts’ markets over the past three years, which has had a short-term impact on occupancy.

“We have seen an overall improvement in occupancy over the past two years,” McBride said.

Part of that improvement can be attributed to HCR ManorCare’s assisted living sales team. Associates have been rebranded as “memory care advisors” and tasked with providing the families of prospective residents with making the most educated decisions for their parents’ care, even if that is not at an Arden Courts community. All memory care advisors undergo HCR ManorCare’s “Circle of Care” training that caregivers undertake, and all are retrained annually.

The Welltower-ProMedica JV lays the foundation for Arden Courts to gain scale, as well, but at a modest and sustainable pace. The firm is looking at several sites for new developments but did not offer details, and wants to build two new communities a year, McBride told SHN.

“[Arden Courts] is a special place. What we do and how we do it is meaningful for our residents and families. We do not cave to outside pressures and focus on doing the right thing, 100% of the time,” he said.

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