Who owns CCRCs?

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For many years, CCRCs were owned by local or regional companies or nonprofits.  By some estimates, up to 80% of CCRCs were nonprofits.  But, that’s been changing recently. When the housing market crashed, so did a lot of new nonprofit CCRC developments.  This caused a wave of acquisitions by for-profit providers between 2009 and today, which has forever altered the landscape of senior housing.

Here are some of the big players in the senior housing industry and a summary of who owns them: (Note that this list is certainly not exhaustive.  If there’s a big one that I’ve left off, please let me know.)

Also, as more and more retirement communities become more professionally-managed, companies have sprung up offering management services.  Life Care Services is one of the largest in the country.  They manage care for over 28,000 seniors.

Why does this matter for seniors?  For the most part, it won’t change life for seniors all that much.  But, there are some things to keep in mind:

  • Communities that used to be owned by small, local companies are now owned and operated by much larger companies. This doesn’t necessarily make that a bad thing.  Rather, it’s a fact that senior should keep in mind when shopping for retirement housing.
  • It isn’t always clear who owns what. Olive Garden is owned by Darden Restaurants, but you never really see their name.  It’s not that they’re being secretive.  It’s just that Darden owns about ten other chains of restaurants.  Similarly, Sunrise and Erickson are owned by much larger companies.  So, when you go visit the campus, remember that you’re visiting part of a much, much larger company that has service lines in dozens of other aspects of real estate and senior housing.
  • Get ready for that “big company” feel.  On the one hand, large companies having significant ownership stakes in restaurants, shopping centers, and other facets of American life has worked out well for us.  We see a Wal-Mart sign, and we know instinctively what types of things we can buy there.  It sets our expectations and helps us to understand the types of services offered in one location.  On the other hand, we’ve all had the experience of eating at a restaurant that “got too big.”  There will be senior housing chains that fail because they cut costs too much and service gets sloppy.  There will be others that people flock to because they offer the best service for the best price.

Seniors housing is undergoing a major change.  But, at the end of the day, you’ll still be looking for the same things when shopping for senior housing: good care, professional staff, a history of safety, well-kept facilities, and happy residents.

Want to learn more about CCRCs? Check out some more articles:

Should retirement communities be run like McDonalds? Part 1 Part 2

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Should retirement communities be owned and run like a McDonald’s? (Part 2)

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 Note: This is Part 2 of two. Read “Should retirement communities be owned and run like a McDonald’s? (Part 1)” here.

The Bad News:

Managers don’t always care as much about customers. To be fair, this is an issue that every company faces. As a business owner or manager, your goal is to make money. Most of the time, you do that by making the customer happy. But, sometimes that goal can be obscured, especially when managers have bonuses or other competing interests at hand.

It’s worse in corporate situations where managers get bonuses based on financial performance. This can sometimes lead to short-term thinking, which is not always in the best interest of the customer.

For example, real estate investors and hedge funds are under enormous pressure to improve their return on investment, and sometimes this means taking more aggressive approaches to investing. Some of these plays will pay off. Others will blow up.

Risk is magnified.  Aggressive growth strategies in a large provider of senior housing can blow up quickly if the market shifts at the wrong time.  What’s worse is that communities that are perfectly healthy and vibrant can be dragged down by disasters in other parts of the country.  For instance, declines in real estate in one part of the country can impact sales at retirement communities in that area.  If these communities are owned by a regional provider, then no one outside of that area is really impacted.  However, a national provider that has trouble in one market might be tempted to pull cash from an otherwise healthy community to help cover the costs.

Parting Thoughts:

None of these benefits or drawbacks are set in stone.  There are plenty of corporations that begin shaving services and customer care as they get bigger.  Also, there are plenty of companies that are huge behemoths and yet still manage to make customers happy every single day.  The success or failure of a national chain of senior housing communities depends largely on the way the company is run, which is why it’s really, really important that these companies hire good managers.

I can’t say for sure if the consolidation trend is good or bad. In fact, it doesn’t matter because it’s going to happen one way or another. It will certainly impact residents’ lives, although not necessarily in bad ways.

My instinct is to rattle my saber and declare war against the invasion of Wall Street. Seniors shouldn’t have to worry about their home being sold at a bankruptcy auction after hotshot managers make silly decisions and invest foolishly. But, then again, that sort of thing happened in the industry prior to Wall Street arriving.

Ultimately, I think the rules of the game will have to be rewritten a bit, and, unfortunately, it will be big corporations wielding the pen.  Competition will continue. Consolidation will continue. There will be bankruptcies, but, by and large, the ramifications will be felt only for managers and debt holders, not seniors themselves. However, the benefits of consolidation mean that seniors might see better amenities and more activities.

Read Should retirement communities be owned and run like a McDonald’s? (Part 1)

Want to learn more about senior housing? Check out these articles:

Five questions to ask during your visit to senior housing.

Why do CCRCs charge an entrance fee?

What is adult daycare?

Take your pet with you to the retirement community.

Should retirement communities be owned and run like a McDonald’s? (Part 1)

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Note: This is Part 1 of two. Read “Should retirement communities be owned and run like a McDonald’s? (Part 2)” here.

Five or ten years ago, there weren’t that many really large companies building continuing care retirement communities. Sure, Brookdale and Sunrise were big, as was (and is) Emeritus and Atria. But, they largely focused on nursing homes and assisted living.  Most CCRCs were owned by smaller, regional companies or by nonprofits.

Since the market crashed in 2008, that has changed dramatically. Senior housing has become an increasingly attractive play for anyone from hedge funds to real estate investors.  This has spurred a round of consolidation that is relatively unprecedented.  It’s very possible that in the next decade, the majority of retirement communities in the United States could be owned by the same two or three companies.

Is that a bad thing? 

We tend to distrust big corporations, and I think for good reason.  But, yet, we all tend to eat at chain restaurants, shop at chain stores, and buy products from the same big online retailers.  Is it really a big deal if retirement communities follow suit? Would having a few national chains control the entire market impact consumers?

I see several benefits and drawbacks to this scenario:

Most large firms have better access to capital. Smaller retirement communities have to work harder to get credit in the event of financial difficulty, and it’s more expensive.  Larger firms can negotiate for loans and financing on a much more national basis, making it easier to finance campus improvements or new communities.  They also have better access to development consulting and other services, which might be prohibitively expensive for smaller companies. Overall this is good for residents, since providers can get the funding their need in a more efficient manner.

Standards and procedures will be more uniform. Ever visited a family restaurant that just didn’t function well? The cash register was too close to the buffet line, and the tables didn’t leave enough room for servers to walk? Well, most of those issues have been solved in chain restaurants.

As firms get larger, they learn which strategies work the best, and they optimize their organizations.  That’s good news for senior housing where staff have to handle a large array of situations and can benefit from additional training that smaller companies might not have been able to provide.

Lifestyle improvements. Larger corporations will probably be better-suited for creating amenities and activities that improve residents’ quality of life:

  • Better activities:  Smaller companies usually rely on one dedicated activity coordinator to handle all aspects of resident life.  If there were a few national providers, these organizations could pay a department of people to craft activities, travel, or other amenities that would help improve resident quality of life.  Since large corporations can negotiate on a grand scale, these services might also be cheaper.
  • Travel agreements among communities in the same chain would allow seniors to effectively visit any city in the country and always have a place to stay.
  • Large corporations can afford to investment in aging in place technology, which might help seniors stay independent for longer.

Read Should retirement communities be owned and run like a McDonald’s? (Part 2)

Want to learn more about senior housing? Check out these articles:

What to expect on your first visit to a retirement community.

Three sneaky sales tactics and your best defense!

How to find a CCRC.

What is LifeCare?

Helping Friends find the Right Community

Togetherness

I’ve got a friend who just moved into a senior housing.  Her children live miles away from here, and as she gets older, she has decided that her best bet is to move into a an independent living community.  As she’s gone through this process, I’ve helped her with some of the aspects of the move and, through it, have gained a better appreciation for the role that friends can play during this time in life.

If you’ve got a friend who needs your help in finding the right retirement community, here are some tips:

Ask first. Before moving forward with any of these other suggestions, make sure to ask whether or not your friend wants help.  It seems like common sense, but not everyone wants a companion when they visit retirement communities.

Offer to drive. The retirement community that my friend ended up picking was right down the street from her old apartment complex, but having me there to make sure that we arrived on time, drive her, and drop her off at the door really helped her focus on making the most out of the visit.

Help carry papers or purses. The marketing department will offer you all sorts of goodies during your visit: a folder containing community information, a bottle of water, etc. It’s a lot to handle, especially for a person with mobility issues.  Bringing a backpack or even just offering to help carry these items can be very helpful.

Make a list of questions beforehand. When in the thick of things, it’s hard to remember which items are important.  Consider helping your friend write down a list of questions ahead of time.  Carry the list in your pocket so that it’s easy to reach during the marketing visit.

Offer emotional support. The idea of moving to senior housing can be very stressful for some people.  Seniors often just need a friend to hear their concerns.  Try to focus on listening, and let them discuss their concerns.

Try not to push the issue one way or another. It may be blatantly obvious to you which decision is “the best,” but try to let your friend work through the decision on her own.

Allow her time to come to an independent conclusion. Again, it may be hard to be patient.  But, most people will recognize when they need help.  If you can, allow your friend time to come to a decision regarding her move.

After visiting the local retirement community with my friend, we went out for Chinese food and discussed our impressions of the visit.  At the time, she was against moving, since her apartment offered numerous advantages over the retirement community.  After several months of consideration, she finally decided to move.  Now that she’s been in her new apartment for a few weeks, she wishes that she had moved earlier!

Gone are the days when we could rely on our family to handle all of our aging needs.  Seniors who have no close family members benefit from the trusted companionship of friends.  If you’ve got a friend who is interested in moving into senior housing and has asked for your help, don’t hesitate to tag along and lend a helping hand.

Want to learn more about senior housing? Check out these other articles:

Why it’s not a good idea to get pushy with a senior housing decision.

Signs of trouble in any community.

How to time your move into a CCRC.

Slightly scary articles about senior housing.

Signs of Trouble in any Community

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It doesn’t matter if you’re looking at independent living, assisted living, or skilled nursing, there are some things that are bad news in every community:

Lack of maintenance. Communities in financial danger or communities with incompetent management will sometimes postpone maintaining the property in order to save some cash in the short term.  This is a bad idea, since small maintenance issues can grow quickly into large problems.  If you see things like unkempt grass, out-of-order toilets, torn carpet, trash in the hallways, or other indicators of maintenance problems, you can bet that there are other things that are wrong that staff isn’t working to fix.

Bad odors. You might be tempted to forgive foul smells in a nursing home, but doing so is a mistake.  The only aroma that you should smell in any retirement community is that from cleaning supplies or food service.  Anything else is a sign that something is awry.  Even nursing homes, where staff have to change adult diapers, should have measures in place to remove the soiled linens from the building.  While there are exceptions to this rule, it’s generally a good bet to skip communities that have a foul smell in the air.

Ill-tempered staff. Regardless of wage rates and turnover, no one wants to live in a place where angry, unhappy people work.  If you see any staff member lose their temper or lash out (especially if management is around to see the episode), see yourself to the door.

Thinly-stretched staff.  There is a lot of staff turnover in the senior housing industry.  For one, most people who work at retirement communities aren’t paid very much.  They also do manual labor jobs like lifting patients or cleaning rooms.  As competition has increased in the senior housing industry, managers are forced to cut wages and staffing ratios even more.  That means that people burn out faster at their jobs.

Staffing ratios (the number of patients to one nurse) have been stretched in recent years due to market pressures.  But, good communities will make sure that staff members aren’t overworked such that they can’t care for patients.  So, if you visit a community where everyone always appears to be in a state of panic, consider other options.

Untrained staff. Unfortunately, staff in retirement communities need to know how to handle many different types of situations not normally experienced in other unskilled positions. When emergencies occur, untrained staff can be downright hazardous to themselves and to residents.  Make sure to ask about the training and background checks that staff members receive prior to joining the community’s workforce.

Angry residents or families. While there will always be at least one resident who is not happy living in the community, pay attention to the attitude and demeanor of the folks who live on the property.  If they’re not happy, then you probably won’t be happy either.

Please remember that it’s ok to listen to your instincts.  If something doesn’t feel right, then you’re perfectly fine to end the meeting and leave.  Also, remember that your decision doesn’t have to be made in one day.  Feel free to do multiple visits to the community.  You can also request lunch or dinner with some current residents to get a feel for the place.  Sometimes retirement communities will also offer you a one night stay in their guest suite to give you an idea of what it’s like to live there.  Feel free to take them up on this offer and to get an idea for how the community functions on a daily basis.

Want to learn more about senior housing? Check out these other articles:

Pushing for a move to senior housing isn’t a good idea.

What is adult daycare?

How to “test drive” a community.

Pets and senior housing.

Paying for a CCRC.

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