The Covid-19 pandemic is pressuring the senior living industry in myriad ways, and providers that don’t adapt with the times risk going extinct.
Life plan communities are more complex to operate in the Covid-19 era, and nonprofits generally don’t have access to the same scale and resources that their for-profit peers do. So, the pandemic demands that these organizations identify and pursue survival strategies, leaders with Kendal Corp. and RiverWoods Group said Wednesday during the 2020 LeadingAge Annual Meeting Virtual Experience.
But as tough as the new pandemic age is for life plan communities, it’s also an opportunity for providers to make some necessary changes, and potentially emerge from the pandemic with a better toolset to serve an incoming generation of older adults. And there is reason for optimism.
The average occupancy rate for life plan communities is depressed from pre-pandemic totals and currently sitting at 86.6%, but they are outperforming other senior housing and care sectors, according to new quarterly data from the National Investment Center for Seniors Housing & Care (NIC). Moving forward, Kendal and RiverWoods are focused on ways to boost efficiency, speed up new development, reach the middle market, harness technology, align with other stakeholders and keep residents engaged through the end of the pandemic and beyond.
“Sometimes, you just get used to the way it is and it’s hard to make a change. But … never waste a good pandemic,” RiverWoods Group CEO Justine Vogel said Wednesday. “Change what you can, and don’t go back to the old ways.”
One of the biggest sea changes facing the senior living industry is the fact that millions more older adults may not be able to afford the services they need as they age.
Kennett Square, Pennsylvania-based Kendal Corp. is tackling the issue by rethinking some of its services and programs for residents, according to CEO Sean Kelly. That includes by unbundling some services, and finding new ways to offer care and support in ways that meet older adults where they are, such as with new technology or by building upon existing delivery systems like Kendal at Home.
“Yes, more affordable housing wants to be built over long periods of time,” Kelly said. “But, I also believe that we have the chops, and frankly an obligation, to figure out how to distribute our services and programs more fully across a larger portion of the demographic.”
Kendal is also looking to source new partnerships with different health care industry stakeholders, such as hospital systems, primary care physicians, insurance companies and even the federal government itself, all with the goal of reducing costs to residents and their families.
Exeter, New Hampshire-based RiverWoods Group has also looked at ways to unbundle its services, use technology to reach more older adults in need and locate new partnerships inside and outside the industry.
Faster development, with a focus on affordability
Additionally, both organizations are rethinking growth in preparation for the post-pandemic landscape. Before the pandemic began, Kendal was focused on projects in urban areas — a practice that has mostly “come to a screeching halt,” Kelly said.
“We’re starting to move back out into the suburban settings, which are no less difficult to develop,” he added.
Kendal is also rethinking some of the traditional components of the life plan community itself, such as the practice of collecting an entry fee from new residents.
“Part of our barrier to growth, going back to the middle market, has to do with the fundamental model of the life plan community that includes a big entrance fee,” Kelly said. “I think we really need to work hard at considering new models more consistently that make the idea of development easier.”
To overcome some of these challenges, Kelly suggested senior living providers may be able to forge partnerships with affordable housing developers or for-profit, multifamily housing developers.
For RiverWoods, there is a sense that the organization will need to find ways to grow beyond its three life plan communities in order to survive and thrive down the road. But, given all of the barriers to new development for non-profit life plan communities, that will likely necessitate some creative thinking.
“As we go into the future, it’s going to be harder and harder to be small,” Vogel said. “We’re going to have to figure out how to work together, how to work with others, and how to project for the world that this is a great way to live.”
But at the end of the day, both CEOs emphatically agree that change shouldn’t come without plenty of input from residents and associates.
“[Residents are] paying a significant amount of money, and they want to be a part of the decision or at least part of the conversation,” Vogel said. “I don’t think that’s ever going away, and if we miss on that, the financial repercussions will be dramatic.”