Brookdale Senior Living’s test of a value-based care coordination program for residents delivered “extremely promising” results, and the program now is being rolled out to additional communities, President and CEO Cindy Baier said Tuesday during the Brentwood, TN-based company’s first-quarter earnings call.
The program, Brookdale HealthPlus, was launched in early 2020 to help improve residents’ quality of life through evidence-based preventive care coordination. Residents are not charged extra for the program, Baier said.
“It works by providing each HealthPlus community with access to a registered nurse care manager who helps promote residents’ health and wellness,” she said. “These care managers use the latest technology and communication tools to enable responsive, effective care coordination with residents’ primary care providers, other specialists and family members.”
The company fine-tuned the program over the course of the pandemic and then hired a third party to assess its success in delivering value-based outcomes.
“The results of the pilot were extremely promising,” Baier said. “The data revealed that residents in HealthPlus communities had fewer urgent care or emergency room visits and fewer hospitalizations than similar residents in private housing. Importantly, the data also showed higher resident retention … which results in favorable occupancy rate increases.”
Those residents were retained, increasing length of stay and driving revenue growth, because their health span was lengthened, she said. Move-ins also were accelerated, Baier said, because the program “attracts more residents to our communities.”
Communities in which the HealthPlus program was being piloted also saw higher retention rates for employees, Baier said. “We expect this program will further improve our residents’ satisfaction and quality of life while reducing costs to residents, their families and the overall healthcare system,” she added.
In April, Brookdale expanded the program from 16 to 31 communities, and the company will be integrating it into 18 more communities before the end of the second quarter, Baier said. It currently is available at several communities in Ohio and Texas.
The company also expects to roll out the program to additional communities in 2024 and beyond.
“I see tremendous opportunity for Brookdale HealthPlus, and I’m optimistic that we will produce favorable outcomes for our residents, associates and shareholders,” she said, adding the company still is working on how to capture more value for Brookdale shareholders.
Brookdale considers HealthPlus a “long-term strategic program” and is “very passionate” about it, Baier said.
Welltower lease agreements revised
Brookdale also announced that it had entered into revised agreements under each of its three triple-net leases with Toledo, OH-based real estate investment trust Welltower.
“As part of this transaction, we extended a lease containing 39 communities that was due to mature in 2026, and Welltower has agreed to make available a pool of $17 million for additional landlord-funded [capital expenditure] investments across two of its leased portfolios,” Baier said. The funds will be used for projects at 69 leased senior living communities to help them be competitive, according to Brookdale.
The lease revisions, Baier said, will improve Brookdale’s near-term cash flow as well as bolster liquidity over the next few years.
Under the revised leases, Brookdale keeps its existing purchase options for all three Welltower leases, including a purchase option for the lease involving five communities that may be exercised at the end of 2024.
The renegotiation with Welltower comes after Brookdale in February decided not to renew a 35-community lease with Westlake Village, CA-based REIT LTC Properties. That lease represents less than 3% of Brookdale’s total unit count, Baier said.
“While we have had a long and productive relationship with LTC, we do not believe extending this lease under the terms of the renewal option would be to the long-term benefit of Brookdale and our shareholders,” she told analysts and shareholders on the earnings call.
Brookdale will operate the communities to the lease term date, Dec. 31, and will work with LTC to help them transition smoothly to new operators, Baier said. LTC Properties recently announced that it plans to sell approximately half of the 35 Brookdale communities it owns and re-lease the other half.
Baier said that Brookdale does not have any other near-term lease amendments or transactions planned.
In other news, the CEO said that Brookdale completed the sale of its last entry-free community last week. “This transaction further simplifies our business and operations,” she said.