OPERATIONAL EXCELLENCE
models from other industries isn’t as simple as it seems. “If you’re serving a need-driven group, you can’t compromise on the care,” Kramer says. “The labor and care component is the
hardest nut to crack. And that’s where tech- nology plays a significant role.” More data, more savings: The mid-
dle-market resident of the future will likely be surrounded by screens and sensors (and at ease with them). Sensors are already opening up worlds of data, the kind that can shave time from caregivers’ tasks and allow them to practice more personalized service. The cohort of middle-income seniors is
also predicted to have a greater instance of multiple chronic health conditions, so tech- nology advances such as fall prediction tech- nology, floor and door sensors, and lighting programming may be essential to preserve their well-being and keep their health care costs down. Technology investments aren’t limited to
tools that assist health and well-being; they’re critical to getting the economies of scale in operation that make cost efficiencies possible. Technology investments that save time and money require a company-wide culture, Trefzger says—no silos allowed. “It’s got to be an ecosystem, or it fails.” No more bells and whistles: To get more
affordable senior living, increase the square footage. Sounds strange? Jon Fletcher, vice president at Presbyterian Homes & Services (PHS) told why turning the typical “shrink
SENIORS OF THE FUTURE
Two more important data discoveries the NIC study points out about the seniors of the future:
They’ll be more educated: “Rates of college education among seniors 75 and over will increase from 24 percent in 2014 to 38 percent in 2029,” the report reads. “Concurrently, the portion of seniors without a high school degree will shrink from 12 percent in 2014 to 3 percent in 2029.” More education usually adds up to less extreme poverty.
They’ll be more diverse: “Mirroring the rest of the country, future seniors will also be more racially and ethnically diverse with minorities increasing from 9 percent of the population 75 and older today to 16 percent in 2029,” the study reads. That indicates the industry would do well to step up efforts to be more inclusive and diverse in every aspect.
to save money” approach on its end works. For middle-market residence, a slightly
larger (1,000 square feet) apartment feels more like home—there’s not the shock of moving from a detached house to a tiny “unit.” This decreases turnover and makes marketing easier. Recoup for this by using builder-grade fixtures and carpeted floors, for instance. The chandeliers and soaring atriums that
characterize some high-end senior living design aren’t going to cut it in this mar- ket. Listening to prospective residents and doing market research can save a misstep. Middle-market residents, Kramer says, are willing to give up some things, but they may not be the ones operators expect. Scale and centralize: Both Affinity and
PHS are vigilant about operating efficien- cies. From resilient landscaping to a shared call center for all communities, they hunt for ways to get better services for less: manage- ment, food purchasing, billing, marketing, and more. Trefzger predicts regional providers will
be at an advantage as the middle market grows, because they can more easily scale and centralize. PHS does the same, using a hub-and-spoke model with central shared management capacity at the hubs. Tackle policy: It’s difficult to see a way to
serve the middle market without addressing the Medicaid spend down policies. “The regulations were designed with good intentions, but they make it difficult to
“You can’t compromise on the care,” says Bob Kramer, founder and strategic advisor at NIC. Technology use and centralization become areas to find cost efficiencies.
serve and provide an affordable product to the middle market,” Kramer says. “Some- one could have spent 50 years as a nurse, or trade union worker, or first responder, and their only choice ends up being, ‘Sorry, you have to shed every asset that you worked for and be labeled poor.’” “Boomers aren’t having it—not to men-
tion the impact that would have on Med- icaid,” Kramer says. “We’ve got to figure this out.”
Don’t forget your mission “We are first and foremost caregivers, so focus on caregiving,” Trefzger says. “That’s where the middle market needs us to be.” NIC plans to continue to highlight pro-
viders serving this market who can share knowledge and experience. The study notes that by 2029, the aver-
age Boomer will be only 83 years old—two years shy of the average entry age to assisted living. “The next 10 years present an oppor- tunity for the industry to broaden its target market, create new and innovative seniors housing residences, and prepare for the years after 2029, when the nation’s massive senior population will need these options the most,” the authors write. Kramer points out that while the study
stops at 2029, the trend continues: “This is the future: The middle-income cohort will grow, and the lower-income one will shrink, for another 20 years.” In fact, both predict the middle market
will become the new normal in senior living, with other diverse offerings filling out the market. “The middle will be forgotten no more,” Trefzger says.
28 SENIOR LIVING EXECUTIVE JULY/AUGUST 2019
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