Seniors Housing Business

AUG-SEP 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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38 Seniors Housing Business n August-September 2018 By Jane Adler As occupancies soften and new residents move in at older ages and with more chronic conditions, ancillary services are playing a growing role in seniors housing. Providers are leveraging ancillary services to extend the stay of their residents and offer the kinds of extras that keep them happy and healthy. Ancillary services can boost the bottom line, too. New buildings often feature dedicated spaces for ancillary services. Modern therapy gyms allow residents to receive professional treat- ments on site. Home health providers may have offices in the building, making it easy for residents to schedule and receive the healthcare they need. Extras like salon and valet services are the kind of perks that can help make a building stand out from the competition. Meanwhile, seniors housing providers are getting creative. One assisted living building, for example, features a special floor or con- cierge level with its own attendant, similar to those in fancy hotels. Another has an in-house team available to accompany the senior to the doctor or the opera. Technology is making ancillary services eas- ier to deliver (see sidebar). Seniors can schedule a ride, get a meal delivered, or visit the doc- tor via a telehealth conference using portable devices. While ancillary services are important to the success of a seniors housing property, they can also be difficult to manage. They don't always result in a big increase in net operating income, either. "Ancillary services have become more important over the last five years," says Alan Fairbanks, executive vice president at Bickford Senior Living based in Olathe, Kansas. "We have more frail individuals who need those services than in the past." Ancillary services fall into two broad catego- ries: those related to healthcare and home care, or what's called private duty care or personal care; and extras such as individual transporta- tion, or special programs. Most ancillary services fall into the first category. These personal and healthcare ser- vices also have the most potential to generate revenue. George Mason University in conjunction with the American Seniors Housing Asso- ciation (ASHA) recently conducted a ground- breaking survey to determine the extent to which providers are offering coordinated access to ancillary health services. The online survey was completed by 50 senior living providers representing a total of about 1,500 seniors housing communities. Among survey respondents, 78 percent indi- cated they offer residents access to at least one ancillary health service. The most commonly reported available service was rehab, offered by 88 percent of assisted living communities and 84 percent of independent living commu- nities. Other popular services included home care, home healthcare, primary physician care and pharmacy. Anecdotally, operators say the services help increase the length of stay. This is especially true with independent living residents who pay for extra help because they prefer not to move to assisted living. Juniper Communities of Bloomfield, New Jersey, conducted a research study in 2017. The intent of the study was to gauge the results of its Connect4Life program, which provides ancillary health services on-site along with an on-site health navigator at the company's 21 senior living communities. Results showed that the length of stay among Juniper residents was 12 percent higher than it was before the pro- gram was implemented. Of note, there is no extra charge for the ser- vice and rents have not been increased to cover the cost of the service. Company CEO and President Lynne Katzmann says the costs have been covered by rearranging staff patterns in most cases. Ancillary services are a big business The home care/personal care and home healthcare industries are valued at about $93.4 billion, according to IBISWorld Industry Research, a business information and market research firm. The size of the market for these ancillary services makes them an attractive tar- get for senior living operators. In the first quarter of 2018, Brookdale Senior Living (NYSE: BKD) tallied revenue of $110.5 million from its in-house ancillary services, including home health, hospice and outpatient therapy. Operating income after expenses was $8.3 million. Despite the promise of added revenue, the complexity of ancillary services makes this niche business tricky to navigate. Medicare reimburses some services, but many senior liv- ing operators avoid that part of the business. More Service, Please n Operations With consumers wanting more ancillary services brought to their door, senior living providers are trying to figure out the best and most profitable way to make that happen. A senior gets help from a worker for home care company Honor, a startup with a tech platform that makes scheduling easy.

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