Juniper CEO Anticipates Amazon Effect, Seeks New Development Partner

Her recent induction into the American Seniors Housing Association (ASHA) Hall of Fame gave Juniper Communities CEO Lynne Katzmann reason to reflect on her past, but it didn’t take long for her to re-focus on the future.

“It’s going to be a big year for change,” she told Senior Housing News, just a few hours after the ASHA induction ceremony last week in Palm Springs, California.

The “Amazon-ification” of health care is one change that Katzmann is closely tracking. Although the Amazon effect on senior living is hard to foresee with certainty, she is running through various potential scenarios, including the acquisition of a senior living provider by Amazon.

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The rising demographic of aging baby boomers is also bringing change to the senior living industry, and Katzmann is blunt about the fact that most of today’s product will not appeal to the next generation of residents. That’s one reason why Bloomfield, New Jersey-based Juniper is planning to pursue new ground-up construction in some markets, once the company identifies the right development partner.

Getting back into development marks a change for the company; years ago, after a few tough construction projects, Katzmann shifted toward growth through acquisition.

Katzmann also continues to make progress toward launching Medicare Advantage plans with her partners in The Perennial Consortium, while Juniper is building a new, “integrated” approach to resident programs and activities.

An eye on Amazon

Juniper operates a portfolio of 20 properties across New Jersey, Florida, Pennsylvania and Colorado — but for its relatively modest size, the company has had an outsized influence in the senior housing industry.

That influence is due in large part to Juniper’s Connect4Life integrated care platform. Through Connect4Life, Juniper leverages health records technology, care coordination capabilities, and an array of health services to drive resident well-being, reduce hospitalizations and extend length of stay. Connect4Life has demonstrated how senior living can become more integral in the overall health care continuum, and is forming the basis of other providers’ care models as they seek to enter the Medicare Advantage market.

Connect4Life is a reflection of Katzmann’s belief that senior living communities can play a key role in bending the cost curve for U.S. health care by driving better outcomes for some of the highest-risk, highest-cost patients — and she thinks that potential health care disruptors also see this potential.

Of all the possible disruptors, Katzmann is most closely attuned to Seattle-based behemoth Amazon, given its significant incursions into health care.

Among its health care plays, Amazon acquired pharmacy company PillPack, and is creating health insurance plans and services for its employees through the Haven venture with JPMorgan Chase and Berkshire Hathaway. Amazon’s Echo is also being enabled with a growing number of health-related applications, and Katzmann believes that these devices in the future will be able to sense people’s movements or even changes in their body temperature.

The data that Amazon is able to glean from Echo devices and other sources could be enormously powerful in driving proactive care in senior living settings, which in turn would save the health care system a lot of money and translate to financial returns for Amazon, Katzmann said.

Amazon’s interest in health care clearly includes the mature market but also extends beyond it, and Katzmann is not sure how much of the company’s focus will ultimately be on seniors. Still, the sheer size of the boomer demographic is impossible to ignore, and Amazon is amassing capabilities that could eventually translate into a senior living play, she believes. That includes owning a name-brand senior living provider.

“I think they have many pieces of the puzzle,” she said. “I think getting into seniors, for them, could make sense. And owning a name brand [provider] could make sense.”

Such an acquisition does not appear imminent, she added, but those who think the possibility is outlandish should consider the diverse array of businesses that Amazon has come to own over the years, including grocery chain Whole Foods.

Extending the thought experiment, Katzmann noted that private equity firms have been investing aggressively in senior housing and are likely to keep doing so in the coming years. A PE firm could assemble a large senior living portfolio — perhaps along with ancillary service businesses — rebrand it and be ready to sell when Amazon is further along in its health care strategy and interested in buying.

This type of speculation might seem easy to ignore, particularly as senior living providers are focused on meeting current operational challenges. But this is the kind of thinking that informed the creation of Connect4Life and established Katzmann as an industry leader.

“The coolest thing for me about [the Hall of Fame induction] is that it shows being really different is okay, and speaking your mind and not being afraid to try new things,” she told SHN. “I think that’s the only reason I’m getting recognition.”

Perennial progress

Medicare Advantage (MA) is another realm in which Katzmann is in the vanguard of the senior living industry. She spearheaded the creation of The Perennial Consortium, through which Juniper and two other providers — Christian Living Communities and Ohio Living — are launching Medicare Advantage special needs plans tailored to senior living residents.

This effort is progressing, with the care model application going to the Centers for Medicare & Medicaid Services (CMS) in two weeks, Katzmann said.

Medicare Advantage special needs plans have historically been designed mainly with skilled nursing residents in mind, so The Perennial Consortium’s model will be “fundamentally shifting” the center of gravity to private-pay senior living communities, Katzmann said.

She is eager to showcase the ability of senior living providers to facilitate care coordination and older adults’ successful transitions between different settings, to drive value to the health care system as a whole. The idea is that this will accomplished, in part, through recently allowed MA benefits related to chronic care and social determinants of health, which senior living communities commonly provide.

“I have two goals for this year — this is Lynne speaking, not necessarily all of Perennial. One is to put our care model, which is senior housing-based, in front of CMS and to demonstrate its value,” she said. “The second is to do a deep dive on benefits and to construct a benefits package for Perennial which meets all the Medicare criteria … but also looks creatively at the kind of benefits that are preventative in orientation, that would meet the governance goals but also perhaps allow [senior housing] to play a larger role.”

Going back to development

While Juniper has been successful in many arenas, the company is not known for ground-up development. Katzmann was initially drawn to development as a chance to create eco-friendly buildings, and she is still proud of the few properties that Juniper built from the ground up, but the process involved fights with architects and construction managers, including an unsuccessful arbitration with a contractor.

After that experience, Juniper focused on acquiring under-managed properties. Now, though, Katzmann is getting ready to jump back into the development game in order to create next-generation communities in certain markets — such as Denver and State College, Pennsylvania — where Juniper has a footprint.

Still, Katzmann is quick to acknowledge that is not a “core competency” for herself or the Juniper team, and so they are seeking a developer to partner with.

“That’s one of our objectives, to find a partner that we can collaborate with,” she said. “We have capital, so we’re willing to own all or a piece of [a building] … We’ve been keeping our powder dry a long time, and it would be really good to be able to deploy it more quickly than we have.”

Juniper intends to re-enter the development fray in part due to high acquisition prices related to the rush of capital into the sector, particularly private equity. But there is also the evolving senior living consumer to consider.

“I don’t think the product that exists today is going to be the successful product tomorrow, in most cases,” Katzmann said.

She believes that senior housing projects going up in urban cores and suburban downtowns, with a mix of retail and public-facing space, are a move in the right direction. These projects meet boomers’ stated desires to be more integrated into the community at large, and their location and designs also open up new possibilities for programming.

One example of this type of urban community is the Murano in downtown Seattle, operated by Leisure Care and developed by Columbia Pacific Advisors. It so happens that Katzmann’s son, Andrew Katzmann, is a senior analyst at Columbia Pacific. He has been around the senior living industry his whole life — the first year after he was born, he traveled 75,000 miles with his mother as she worked to get Juniper off the ground. Last week, he inducted her into the ASHA Hall of Fame.

“It’s a little overwhelming,” she said, of her son’s role in the induction ceremony. “That was very meaningful.”

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