Senior Centers Export Services to People at Home

Senior communities have been hammered by an extended recession, depressed real estate values, and changes in healthcare reimbursement rules. Now, communities throughout the country are exploring new business models and exporting their skills and services to individuals who decide, through choice or necessity, to continue living in their own homes.

[See Top 10 U.S. Places for Healthcare.]

The changes often aren't the stuff of dramatic news headlines. But their cumulative effect, many participants feel, will amount over time to a revolution in the way health and wellness services are provided to the nation's rising population of older citizens. The delay or even overturning of the health reform law will influence only the timing of this shift. Its inevitability is driven by the need to find more cost-effective ways to help surging elderly populations, enabled by electronic health technologies.

"What we are doing now is beginning to transform ourselves from a senior living services company to an aging services company," says Tom Stofac, chief executive of Ohio Masonic Home in Springfield. "We want to be a trusted resource to help people age respectfully," he explains, "and to be a partner in the aging process with people wherever they are."

Ohio Masonic has three campuses providing residential care to about 1,000 people. It also has a home healthcare company operating in 36 Ohio counties and eye care coordinators throughout the state. There are about 100,000 Masons who live in Ohio, and Stofac would like to help them all.

"How do you want to age and where do you want to age?" are consumer questions for which senior housing and care providers should provide successful answers. "We shouldn't be predisposed to tell you that you need to move into a CCRC [continuing care community]," Stofac says.

[See Health: The Biggest Determinant of Your Retirement Security.]

Necessity is clearly the mother of invention for senior housing operators. The numbers of new living units at high-end CCRCs have been very small for several years. The normal funding mechanism for six-figure CCRC entrance fees has come from people selling their primary residence. With housing values on a five-year skid, older homeowners have either been unable to sell their homes or unwilling to sell at depressed prices.

At the same time, aging seniors are showing less interest in moving into a CCRC so long as they can maintain active lifestyles in their own homes. Meanwhile, government spending curbs have reduced profits at many nursing homes, and threaten its basic business model.

"I'm not seeing this tidal wave of new customers coming back into the market for high-end independent living," says Scott Collins, the head of Linkage in Mason, Ohio. It provides consulting and business services to more than 400 senior housing communities. "More and more people want an active living lifestyle and not to congregate in a community," he observes. "Life is forever changed in the long-term care industry."

At the same time, assisted living facilities and nursing homes are dealing with residents who are both older and sicker. "Assisted living looks almost like nursing homes did 10 years ago," Collins says. "Nursing homes have changed into acute care facilities, and the acuity levels [of illnesses] have risen dramatically over the last eight to 10 years."

[See How to Succeed at Juggling Caregiving Burdens.]

If that weren't enough, reimbursement rates have either been cut by the government or seem likely to be reduced because of big healthcare budget deficits expected to last decades. "Many [nursing home] operators are trying to get out of nursing facilities," he says. "Today, an operator often says, 'The more people I serve, the more money I lose.'"

As financial pressures rise on senior living institutions, it's also clear that tomorrow's market includes big increases in seniors aging in place in their homes. Surveys show that seniors overwhelmingly prefer to stay in their homes and adjacent communities. And private and government care programs increasingly prefer home-based care as more affordable.

National Church Residences (NCR) in Columbus, Ohio, is bridging these two trends with its new offerings, says chief medical officer Mike Barber. Besides having four CCRCs and a hospice in Ohio, he says, NCR is the nation's largest provider of subsidized housing for the elderly, with facilities in 28 states and Puerto Rico. Barber is overseeing efforts to export NCR's healthcare skills into its housing units.

"We have built a patient-centered medical home model that we are co-locating where these seniors live," he says. "We are taking one of our large affordable housing units and putting a medical home there. Nurses and healthcare practitioners will have exam rooms right there and will also be able to visit people in their apartments."

"By putting it in the neighborhood where they live, you eliminate the inefficiency of driving across town to different places," Barber says. "There is strong evidence that we can make a big difference in their health outcomes while dramatically lowering costs."

"People out in the field understand that we can't continue as we have been going," he says. Rising healthcare and housing costs must somehow be cut to help balance the federal budget, and Barber thinks NCR's approach can do this and simultaneously improve people's health and the quality of their lives. "It's not only inevitable, but it's the right thing to do," he says.



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