Economic pressures placed on middle-income older adults during the COVID-19 pandemic has created a growing population of seniors with housing needs but limited resources.
Senior housing providers recognize the challenges of this growing demographic and see an opportunity to provide creative ways to meet their needs in cost-effective ways.
John Cochrane, president and CEO of Pleasanton, CA-based nonprofit senior housing provider HumanGood, said the economic disruption caused to the middle market means the industry will need to work more collaboratively, think differently about healthcare and be open to new partnerships to provide needed services.
“The pandemic had an immediate influence deeply felt across our company and the field,” said Cochrane, who was part of a panel Thursday at the National Investment Center for Seniors Housing & Care 2020 Fall Conference on “Seniors housing’s new reality: Impacts and ideas for the forgotten middle.”
“The middle market is aware of their own economic circumstances,” Cochrane said. “They are increasingly aware of their own health and wellness circumstances. They are looking for resources to manage that.” The industry needs to find new ways of delivering early holistic value in healthcare to help seniors live their best lives, live independently and not be a draw on society, he added.
Another panelist, James Lydiard, staff vice president of California-based integrated health plan and care delivery company CareMore Health, said housing and healthcare no longer are separate sectors when serving older adults.
“You need both,” he said. “Start to think about assisted living and independent living settings as much as healthcare settings as you think about nursing homes and hospitals. We’re not there yet, but these are discussions we need to start having now.”
Healthcare partners, Lydiard said, can be a function of community operations. Ideally, he added, operators should work with fewer, more intimate, partners to achieve an operational and productivity impact in their communities. Narrowing the number of providers and the number of options, Lydiard said, will make residents’ lives better, make building operations run more smoothly, and allow partner companies to bring more robust solutions to a building or community.
Cochrane said providers need to look at unbundling services like the cable companies and be willing to let go of those services that can be better delivered through a service partnership.
Healthcare, he added, is one of those areas.
“I think we are one-size-fits-all healthcare. We’re trying to serve everybody, and we’re kind of an acquaintance of a lot of people, but we’re not developing deep relationships, nor are we getting deep impactful results for the people we’re trying to serve,” Cochrane said. “We can better serve with partners who understand those populations, and have the resources to address their needs in a really comprehensive way. We can benefit from that.”
The third panelist, Bill Pettit, president of Seattle-based R.D. Merrill Co., the parent company of Merrill Gardens and sister company Pillar Properties, said R.D. Merrill is exploring that unbundling and multiple partnership model by working with local home healthcare companies to identify a principal vendor to deliver better efficiency.
By partnering on the care side, and with more novel, custom solutions on the dietary side, Pettit said he’ll be able to operate buildings and charge rents that are $1,000 to $2,000 less per month than the full-service senior housing model.
After realizing it was losing its middle-income seniors over the past 10 to 15 years due to cost increases in operations and construction, R.D. Merrill partnered last fall with Toledo, OH-based healthcare real estate investment trust ReNew REIT to buy a portfolio of senior housing buildings at an “attractive valuation” to serve seniors out of a less expensive physical plant.
R.D. Merrill plans to turn those 35 communities into a new Merrill brand to still deliver many of the benefits of lifestyle enhancements in senior living, but focused on a way to do it with less staff and lower cost.
“More affluent seniors make decisions in different ways than middle-income seniors, who are far more open to participating in their own needs as seniors and facilitating that in different ways,” Pettit said. “We think seniors in the middle income are far more cognizant of their resources and willing to make decisions based on those resources differently than more affluent seniors.”
Pettit said the biggest impediment the industry has to the middle market is the conviction that the full-service senior housing community is the only solution.
“There are other solutions. We’re crafting one,” Pettit said. “Our biggest impediment is ourselves.”