By Steve Moran
There are a bunch of reasons I have so much appreciation for the role The National Investment Center for Seniors Housing & Care (NIC) plays in senior living. They see their primary role as creating transparency for investors. While I don’t dispute that role, my awe is all about how they are helping us expand our thinking about what we do and how we do it.
I had a chance to sit with Bob Kramer, the founder of NIC, and talk about where senior living is today and where we are going. You can watch the interview below, but here are some of the highlights:
The whole value proposition of senior living is not about healthcare, but rather it is about helping residents live the very best life they can live; to achieve their goals for this time in their life.
This means the future is not being a conduit to the hospital, not having the hospital be the third shift of senior living, but rather bringing healthcare to the residents, which will allow them to live the best possible life that they want to live.
To be successful going forward, we should be thinking about the needs of those holding the purse strings for the care of residents. More and more, they are looking for value, which means delivering the right care, and the right amount of care at the lowest cost.
This starts with care coordination, which is something that senior living can do better than any other entities.
Care coordination means bringing care and wellness initiatives to seniors where they live. It is a proactive rather than a reactive approach. It reduces costs and vastly improves the quality of life for residents.
The big question is this: are we, as an industry, really willing to take this on? Bob asks this question: If an adult daughter of a resident is paying thousands of dollars a month to a senior living community to give her mom or dad the very best quality of life, will they really be willing to pay all that money and then still be responsible for making care management decisions in the middle of the night or any time?
The problem is that they are paying a lot of money; they are living busy, overwhelmed lives; and mostly they do not have the knowledge or skills to navigate the complexities of accessing the optimal levels of healthcare for their loved ones. In Bob’s view, it is one of senior living's biggest challenges and biggest opportunities.
Where Do You Start?
I believe many operators are convinced this is the right thing to do, but it feels too complex, too difficult, too resource intensive. I asked Bob for some suggestions about where an operator should start:
The first thing you need to do is understand the dynamics in the markets where you operate. What percentage of residents are on Medicare Advantage programs? Which plans? What are the big medical providers that are serving MA members?
Are any of your provider organizations in risk-sharing contracts? Do any of them have downside risk? The data shows that when these organizations have downside risk they become much more willing to look at working with senior living providers. You also need to understand the pain points for your payers and healthcare providers.
There is so much more in the interview. It is 27-minutes long and it will be worth every minute of watching and listening to here.
I want to leave you with this big important question for operators and capital providers:
“Do you really think that in 5 to 10 years people will really pay you five to seven thousand dollars a month and then still be the ones doing all the coordination for doctors, prescriptions, tests, therapy, and hospitalization?"
This is the challenge and opportunity.