By Tom Mann, Principal
Throughout the years, Love & Company has strived to provide senior living C-level executives with key industry insights and trends. In this five-part blog series, I will examine how some of the more progressive organizations are preparing for the future. I thought about writing this series eight months ago when I first noticed Amazon’s interest in senior living. That was the seminal moment when I realized that the proverbial wolf was at the door.
Threat or an opportunity? Both!
If you want to know how quickly technology is changing our world, just ask a New York City cab driver. In 2014, the licensing (a medallion) to drive a taxi was both limited and costly (approximately $1 million). Today, thanks to the impact of ride-sharing services, Uber and Lyft, a medallion holder will be lucky to get $250,000 if he or she attempts to sell his or her rights. This seismic shift has left many independent taxi drivers underwater and buried in debt.
Taxi drivers won’t be alone. I almost always utilize Uber’s services while traveling now as opposed to a rental car. Why? For the same reasons I no longer use cabbies: convenience, price and service. It’s also the same reason I now shop with Amazon rather than go to the mall.
Which business would you rather be in: the taxi business or the transportation business?
On top of all the technological changes, we are seeing a dramatic shift in age and racial profile that will affect who we serve as well as who serves them. Healthcare providers will see ever-evolving shifts in reimbursement models as the nation struggles with how to deal with the financial burdens arising from the burgeoning senior population.
For organizations to survive, they need to be ahead of the curve and react at the speed of light. In fact, the most progressive companies need to question how they can disrupt their own industry…before another company does.
So what does all this change mean to senior living communities?
Currently, less than 5% of the age- and income-qualified population moves to a Life Plan Community. A whopping 95% of seniors elect to stay in their houses as long as possible, and this option is becoming even easier through services such as Amazon (food, household goods, entertainment), Uber (transportation and food), Skype and Facetime (socialization), Angie’s list (handyman services), telemedicine and an abundance of home health options. In addition, older adults are finding and utilizing home-sharing options, such as Airbnb and SilverNest, to reduce expenses while enjoying the company of others.
As Life Plan Communities, we need to ask ourselves:
- Are we in the senior living business, or are we in the business of serving seniors?
- How will technology, healthcare innovations (nanotechnology, biotechnology, mapping of the human genome, etc.) and changing demographics disrupt our business, and what should we do differently?
- What can we do to make senior living communities more attractive to a larger percentage of people?
- How quickly do we need to change?
Preparing for change by creating a “new” organization
The most progressive organizations, such as Asbury Communities and Westminster Communities of Florida, have invested significant time and effort to better prepare for the future. Roger Stevens, the CEO at Westminster, confirms, “Every two to three years, we update our five-year plan. The plan consists of two parts: Conditions Affecting Planning and, assuming those conditions, the Board Directives (the term we use to describe the heart of our strategic plan). As part of that process, we invite outside experts. This year we invited Rich Scanlon of Ziegler and Tom Mann of Love & Company to discuss conditions expected in our industry over the next several years. In preparation for this year’s meeting, our board members read two books, Upside by Ken Gronbach and The Truth About Your Future by Ric Edelman, along with other articles on the industry that I forward to them as time goes by. We live in a very exciting time when change happens so rapidly, many organizations get caught flat-footed. We strive to be proactive, rather than reactive.”
“One of the lessons we have learned through experience is that in order to truly create success around new initiatives, you must create laser-focus on them and not just add it to someone’s already full portfolio,” says Asbury’s President and CEO Doug Leidig. Doug continues, “And that certainly includes myself. In my opinion, too many CEOs personally bite off more than they can chew. To that end, I have hired and reassigned staff into a discrete growth team that has the primary responsibility to focus on growing the organization both through bricks and mortar in addition to exploring and adding new business lines and developing joint ventures/partnerships. We are going to be disruptors of senior living because we’re focused on improving the lives of seniors. That requires taking advantage of new advances in technology and healthcare. It also requires paying attention to every operational detail!” In addition to managing eight of its own communities, Asbury is assisting other communities with their management through affiliation.
As an example of operational efficiency, in 2009 Asbury joined Caring Communities, a Reciprocal Risk Retention Group. Its members include 65 of the top 150 ranked CCRCs in the country. Caring Communities made a total capital contribution of $560,508 in 2009, and it began to receive dividends in accordance with its investment parameters in 2014. Over the past three years, as a result of its record and focus on risk and claims, Caring Communities has received dividends totaling $719,427.
But if you really want to see Doug excited, ask him about Asbury’s integrated technology. “I view Asbury integrated technology as one of our biggest opportunities. Technology can improve the lives of the seniors we serve, as well as improve the services we provide. We recently created a phone-based app for our front-line staff. These are people who typically don’t have access to computers at work, which makes communication difficult. This new app makes exchanges between our associates and management much, much easier … which ultimately means a happier, more informed, more effective employee.”
How much has this app helped communication? Nearly 1,200 associates have downloaded the app, of which about 40% are associates who don’t have email. That means Asbury is now reaching an additional 450 associates. When you look at the total number of associates now connected via email (1,250) and app-only/non-email (450), Asbury is now directly connected with about 1,700 associates electronically, which is an amazing 26% bump in connection! Users of the app read and are engaged at levels much higher than Asbury has ever experienced. For example, read rates in the app are nearly double what Asbury has seen in email communications (75% read rate in the app vs. 39% on email)!
That’s just the tip of the iceberg! Asbury is also maximizing the strengths of business partners to bring advances to its residents and clients. Doug points out, “We will soon be bringing Paro, a therapeutic seal that utilizes artificial intelligence, to our residents with the assistance of one of our business partners, Sodexo Senior Living. Paro helps to increase the socialization of seniors with dementia.”
Doug adds, “We’re currently piloting a telehealth program with TripleCare to determine if treating residents in place with off-site telephysicians is better than transferring them to the hospital. Just think of the positive impact on the residents and the reduction of readmissions! And on the other end of the spectrum, with independent living environments we’ve begun piloting smart homes with K4Connect.”
Love & Company’s president, Rob Love, and Roger Stevens agree with Asbury’s focus on technology and wellness. “It is clear that smart technology is here to stay and is a very real factor in the marketability of homes today. As such, it will quickly become a basic expectation of boomers as they begin to consider Life Plan Communities more and more. To be ready, communities need to be planning for this today,” advises Rob Love. “Look,” adds Roger, “the Quantified Self digital trend will continue to gain traction with boomers. Tracking your activity with the assistance of smart watches and other items will soon become the norm. We’ll see everything from fitness to sleep, to glucose monitoring, ideally improving wellness and empowering residents to be the champions of their own health. Residents will be enabled to manage health issues that are either chronic or acute. Insurers such as Kaiser Permanente and Humana are already studying digital health interventions. I don’t think it will be long before they partner with progressive senior living organizations to improve success rates for resident treatments and lowering re-admissions.”
For more information about how Love & Company can help your community stay ahead of the curve during this “age of disruption,” contact Tim Bracken at 410-207-0013, or click here for a free assessment!