A dramatic increase in business for a new startup, Cohana, suggests just how much Covid-19 has fueled interest in small home-style senior living.
Based in Miramar, Florida — in the Miami/Ft. Lauderdale metro area — Cohana was founded in September 2019 by the husband and wife team of David and Jennifer Phillip. In addition to being a long-time hospice nurse, David is co-owner of a six-bed assisted living home in Margate, Florida. Running that home, he became frustrated in working with large, online referral platforms to gain residents. He created Cohana to be an alternative.
After launching last fall, Cohana was slowly gaining traction among South Florida assisted living providers and potential residents, Phillip told Senior Housing News. Then, Covid-19 reached the United States in mid-March.
The pandemic coincided with a dramatic surge in business for Cohana, which saw its user base expand by about 140%, according to Phillip. Most of that growth came from new assisted living providers joining the platform, the majority of which operate small homes like the one Phillip himself co-owns. Currently, Cohana has 140 providers approved to list and more than 1,500 active accounts, which includes both assisted living providers and potential residents.
The pandemic may have driven business to Cohana because small-home providers — already at a marketing disadvantage compared to larger rivals — lost the ability to interact in person with key referral sources such as doctors and rehab centers. At the same time, Covid-19 has increased consumer interest in alternatives to apartment- or resort-style assisted living options, Phillip — who experienced a Covid-19 infection himself — believes. The idea is that small-house senior living is easier to secure from an infection control standpoint, and offers a more homelike atmosphere for residents who need to forgo trips outside the building and be isolated from visitors.
“The pandemic … created an opportunity to address this market,” Phillip said. “We’re getting a lot of phone calls from families and residents looking for a more private option.”
And the market size is substantial. About 46% of the assisted living market in Florida consists of 4- to 10-bed facilities, Phillip said. In Florida, facilities are considered assisted living if they have more than six residents, while those with fewer than six beds are licensed as adult family care homes.
But while numerous, most small home-style care residences are run as discrete businesses and lack the benefits of scale. Most operate without a formal marketing plan, for example, Phillip said. One of the ultimate goals for Cohana is to not only be a preferred referral platform for these care providers, but to offer continuous support and help further professionalize this side of the industry.
Ongoing support from Cohana could range from health care advice from clinical professionals to liability insurance coverage to assistance in getting residents to and from medical appointments. Already, Cohana has a network of volunteer nurses to field questions from providers on the platform, Phillip said. A major focus at the moment is refining Cohana’s value proposition in preparation for seeking investors, and the company is receiving help in this endeavor as part of a program with the nonprofit Venture Mentoring Team (VMT).
The Cohana business model is based on the company’s ability to provide ongoing support. To be listed on the platform, a provider pays a one-time fee of $24.95. Then, when residents process their monthly rental and care fee, Cohana collects 5%.
This system compares favorably to what large online referral companies charge, Phillip argues. These referral companies typically take the first month’s rent for residents who come through their system. Average length of stay in assisted living is around 22 months, but that is variable, with some residents turning over much sooner for various reasons, Phillip said. So, a smaller upfront fee and ongoing charges while the resident remains in place should be attractive to smaller communities that lack the revenue of buildings that may be 50 to 100 units or larger. And the focus on providing support to assisted living communities, and concentrating less on being a placement service for consumers, is another differentiator. The Phillips compare Cohana to Airbnb in terms of creating a trusted, vetted marketplace for consumers.
That said, Cohana is not limiting itself to listing and working with small-house providers and is already working with some larger companies. However, both David and Jennifer Phillip believe that senior living is shifting toward more intimate communities, due to consumer demand trends and the massive need for options at a middle-market price point.
“We see that this is the future,” Jennifer Phillip told SHN.