From Tech to Payment Sources, Senior Living Execs See Need for Big Industry Changes

With the darkest days of the pandemic in the rear-view mirror, more senior living operators should consider experimenting with new technology, adopting new standards for data — and potentially even start taking reimbursements from the federal government.

Those were some of the big takeaways from a panel discussion at the 2023 Argentum Senior Living Executive Conference in New Orleans this week.

It’s no secret that the industry was radically changed when the Covid-19 pandemic hit in 2020 — or as Arrow Senior Living CEO Stephanie Harris puts it, “blown up overnight.” Operators have spent the last three years picking up the pieces and putting them back together in almost every facet of the business, from staffing and culinary services to activities and health care.

But the “silver lining” of that period of destruction and reassembly is that senior living operators have had a long period to change the old ways, including many that needed to change for the future anyway.

“One of the bigger changes … is thinking about the new consumer, the new employee, the expectations of how the pandemic has even changed what people want, where they live, where they work, or where they spend time,” Harris said. “So one of the things we’re looking at is having to shift the business model.”

From bold predictions about the future of payment sources in senior living to how the industry can and should collaborate, here are some ways operators including Arrow Senior Living, Solera Senior Living, Retirement Unlimited (RUI) and Belmont Village are looking to shift the industry’s business model into a new gear.

Rethinking reimbursement

The senior living industry has long resisted taking federal reimbursements for services the way the skilled nursing industry does. In recent years, certain payments from Medicare and Medicaid have started to creep into the conversation for many operators — but Adam Kaplan believes the industry can go much further than that in its quest for federal dollars.

“My prediction is that assisted living and memory care will be reimbursed, they will not remain private-pay,” Kaplan said during the panel discussion.

His argument is one that operators have made as they have grown cozier with payers in recent years: The senior living industry already creates a lot of value for the health care industry, so why not get paid for those efforts?

For decades, the popular counterpoint to that argument has been that the industry is wary of more oversight from the federal government. But the current era of margin compression and financial headwinds necessitates a new way of thinking, according to Kaplan.

“Given the degree of margin contraction that we see, we need to be thinking about whether we’re going to be a private-pay industry long-term,” he said.

He believes the industry has a chance to demonstrate two big advantages: That it can improve outcomes among older adults, and that it can deliver services older adults need at a lower cost relative to other options.

“I don’t think that we always articulated that value proposition very well,” he said.

Solera has co-located a primary care clinic on a Solera community campus in Austin, Texas. And what is exciting for Kaplan is that the collaboration offers the provider a real opportunity to show its value improving quality and outcomes.

“For every person that enrolls using their primary care service, they take the Medicare rate for those beneficiaries, and then we participate in part of the shared savings,” Kaplan said.

But the industry will need lots of data with which to prove its value — and that has been on the mind of Belmont Village President and panel moderator Mercedes Kerr. She said she believes data standardization is necessary and coming — and that she is “optimistic for the first time ever” that operators are waking up to that fact.

“I believe that the industry will have to come to terms with some level of standardization, whether it’s quality of care, whether it’s reporting or financial metrics,” she said. “It’s going to be a very heavy lift, but one that I think everybody is going to somehow eventually come into.”

Changing tech, changing preferences

As the boomers loom large over the senior living industry’s next decade, operators have agreed that they are bringing with them a whole new set of preferences. And while exactly what those preferences are remains to be seen in some cases, the bottom line for operators is that they must be willing to be flexible when it comes to what their future residents want.

That is especially true given that the industry has spent the last two years raising resident rates, according to Kaplan.

“[Residents] are saying, okay, now that you have passed that on to us, game on, we’re going to expect more from you,” he said.

RUI is staying flexible and changing with the times, according to President Doris-Ellie Sullivan. She noted that the operator saw a big and somewhat unexpected influx of independent living residents, some of whom brought a new taste for the finer things.

“Our alcohol and wine list — they were demanding,” she said.

The operator also catered to the group through lifelong learning opportunities and virtual engagement. Sullivan said the company is taking a look at automation and AI in conjunction with the company’s website.

New residents are also bringing new preferences for technology. While that can include the cutting-edge in devices, in some cases, operators don’t have to look far for guidance on where to go next.

For example, Arrow Senior Living held a hackathon earlier this year in January that resulted in the launch of a new app. The app — called The Archer — is integrated into the operator’s existing Arrow App, which lets residents view schedules or menus and communicate with one another.

“That’s how we’re going to move the needle in this business,” she said. “Figure out ways for [execs] to get out of the way and let our teams really drive innovation.”