“Life Care” is the widely used term that is significant in the history of the field of age targeted communities and services. Some of the largest organizations that build and manage communities have taken that name as have some of the largest continuing care at home programs. “LifeCare” is also the common name for the “A” or extensive contract that was the predominate way that most customers came to these communities and services. Until recently choosing the lifecare contract at many communities was like picking a black Model T Ford (other colors were first offered in 1926.)
Many customers still purchase a lifecare agreement that includes a pre-paid medical expense (and deductions) for facility care offerings that are part of the on-campus long term care safety net. What’s covered by LifeCare contracts can be defined differently and new modified and fee-for-service agreements have multiplied. Even the communities that have LifeCare as a part of their names are seeing an increasing percentage of customers buying these new lower cost and lower coverage agreements.
Continuing Care at Home Programs do not have the physical structures and legacy staffing commitments that communities have, and these customers are passionate about NOT moving to facility care. CCaH programs’ outstanding value proposition is that less than 5% of members ever use facility-based care. As data collection becomes more comprehensive, the difference between the health and health investments for this group as compared to the general population will accelerate change.
Skilled nursing is at the fulcrum of these trends and questions. Internal and external utilization for nursing care continues to drop by 3 percent or more per year. Regulations are increasing, staffing costs are up, occupancy is down and yet there is a promise to existing residents as well as greater socialization opportunities that must be considered. Similarly skilled nursing is a box that many customers want to check to consider a community as their future home. There are many questions for the board and management in these tensions…Can we attract and afford the right team of nurses? Can we fill and make a margin? Can we downsize and maintain operational and cost efficiencies? How can we provide better socialization opportunities in any model? Can or should we exit skilled nursing altogether?
I like adding a few more questions… What do our customers want? AND What do our residents want? Taking away anything, even if it is unused or unwanted, is usually not well received. Replacing something unwanted with something better may be the brighter path. More communities are adding “care coordinators” to their independent living teams and more CCaH members are keeping those relationships, their agreements, and moving into all types of communities. A new pattern is appearing that should be tested with residents and customers. It is much more than messaging to say there is a path forward to keep the promises of life care and lower the use of facility care while providing support and greater independence. More Life! Less Care!
Some questions for your consideration:
- Should you review and/or renew your actuarial study?
- Should you ask how the length of stay in different levels of living is changing over time?
- Is there a financial concern about a reduction or delay of entrance fee revenue due to longer independent living residency?
- Has this already started and how might it be addressed going forward?
- Should you consider Continuing Care at Home programs and Early Acceptance programs?
- Whether through partnerships, vendor agreements, or direct sponsorship; might these channels give customers more appealing choices, increase overall occupancy and revenue, and serve more lives?
- Should you consider consumer research with your wait list, residents, and other members?
- Are there pricing and packages of services that can be adjusted to give the customers a price-agnostic way to show their preferences?
- Can you make the same or greater margin?
Thanks to all the organizations who include me in their search for answers to these and other good questions.