Medicare’s Changing Priorities Open Opportunities for the Industry

Insights on senior housing and care from the agency’s top administrator.  

More data. More dialogue. That was the ask of the industry by the director of the Medicare program during a candid discussion at the 2024 NIC Spring Conference in Dallas.

“We all have to partner together to provide better care, improve population health and spend the healthcare dollar in a more effective way,” said Dr. Meena Seshamani, MD, PhD, Deputy Administrator and Director of the Center for Medicare. “I want to drive everyone to a call to action.” 

In a lively Q&A format, the well-attended, keynote session addressed the direction of the Medicare program and what it means for senior housing and care, dovetailing with the conference theme “Insights into Action.” The discussion was facilitated by David C. Grabowski, PhD, Professor of Health Care Policy, Department of Health Care Policy, Harvard Medical School.  

Attendees got an insider’s look at Medicare’s priorities. Top of the list is the shift to value-based care arrangements. All Medicare beneficiaries are expected to be treated by a provider in a value-based care model by 2030, according to the Centers for Medicare and Medicaid Services (CMS). Seshamani explained that value-based care is an effort to rethink how healthcare is provided. Instead of treating illnesses on a fee-for-service basis, value-based care models treat the whole person with the aim of keeping them healthy to ultimately drive better outcomes at a lower cost. 

“Can senior living be part of holistic care?” asked Grabowski. “Is there an opportunity to provide care on site?” 

“Yes,” said Seshamani, adding that there is an opportunity to provide people with care where they live. But she noted that senior living is not considered a provider under the Medicare law. “That is where partnerships that are data-driven to demonstrate quality and cost, can enable what we all seek to provide. That is where the power of value-based care comes into play,” she said.  

Possible partners for senior living providers are Accountable Care Organizations (ACOs) and Medicare Advantage plans, both value-based care models.  

ACOs, for example, take responsibility for the cost and quality of care provided to patients. If an ACO meets quality metrics and saves Medicare money, then the ACO shares in the savings. “ACOs have knocked it out of the park on quality measures,” said Seshamani. “It’s an example of how partnerships can work to everyone’s benefit.” 

CMS recently issued a request for comment on Medicare Advantage plans to gauge the effectiveness of the model. Seshamani challenged the audience to submit their ideas by the end of May.  

“We need data and transparency to encourage innovation and market competition in ways that are central to our mission,” she said.  

Panelists from the 2024 Spring Conference

Measure Results 

Grabowski asked what metrics senior living providers should track.  

CMS has created a universal foundation of quality metrics that can drive change.  

Measures include tests such as screening for depression, blood pressure, and diabetes, among others. CMS also has an innovation center to test new program models and metrics.  

Medicare doesn’t cover long-term care, but Grabowski wondered about Medicare Advantage plans that offer a supplemental benefit for long-term care.  

Seshamani said this is another case where CMS needs more data to assess the effectiveness of the benefit. Do people understand the benefit? What is the uptake? Does it improve health? Medicare Advantage plans have been asked to report their data. “We want to make sure that what is being offered is being delivered,” she said.  

Grabowski observed that prior authorizations and denials of care required by Medicare Advantage plans are common pain points for skilled nursing providers. In an example of how dialogue with stakeholders can impact policy, CMS asked for comments on the issue and received 4,000 replies. The feedback was used to change the policies. For example, as of January 1, 2024, denials can only be made by providers with clinical expertise.  

NIC Co-founder and Strategic Advisor Bob Kramer fielded audience questions in an animated back and forth.  

Question: What about staffing shortages? 

Seshamani: Providers are encouraged to look for partnerships. For example, Medicare pays for certain community health services. 

Question: How can senior living providers partner with Medicare Advantage plans for non-medical services? 

Seshamani: Medicare wants more information on the kinds of benefits that are working. Providing data is a good way to engage with Medicare.   

Kramer wrapped up the session emphasizing that the senior living sector has an enormous opportunity. Providers have their eyes on Medicare beneficiaries 24/7. 

“Dr. Seshamani is here to spur a dialogue,” said Kramer. He added that as senior living moves to center stage on quality-of-life issues for older people, the industry must provide data. “We can’t just say we do a great job,” said Kramer. “Dr. Seshamani has opened the door for us to show our results.” 

Conference attendees can view the entire session with Dr. Seshamani on the conference app

How to Succeed in the Growing Active Adult Rental Market

Two developers share lessons learned. 

As the active adult rental segment attracts more investors amid a quickly growing pool of potential customers, a highly interactive session at the 2024 NIC Spring Conference took a deep dive into the product type. Two broad-reaching case studies of successful strategies were highlighted. The audience was also polled throughout the discussion for their input. 

The session was led by NIC Senior Principal Caroline Clapp, NIC’s subject matter expert on the active adult rental sector. It is one of the key focus areas of NIC’s strategic plan to increase data and transparency in the segment.  

Joining Clapp on stage were two veteran active adult developers: Jane Arthur Roslovic, CEO and co-founder of Treplus Communities; and Robert May, managing director of Avenida Partners.  

Putting the discussion in context, Clapp noted that NIC MAP Vision tracks 540 active adult properties with 80,000 units nationwide. The penetration rate among potential residents is less than 1%. 

Clapp identified four key factors in a successful active adult strategy:  

  • Understanding the consumer;  
  • Choosing a product type, design, and location conducive to downsizing;  
  • Selecting amenities and activities distinct from traditional multifamily products; and 
  • Implementing and maintaining a strong sense of hospitality and brand. 

Understanding the consumer comes first. “We can’t do enough research,” said May, whose company has been building active adult communities for 14 years. When choosing a location, he focuses first on the demographics, mostly baby boomers.  

About 60% of residents come from a seven-mile radius. In his experience, baby boomers have high expectations but need to be educated about the product and lifestyle.  

In audience polls, attendees indicated that demographics and opportunities for product diversification were most appealing in the space and that multifamily expertise would best transition to active adult, followed by senior housing. Both Roslovic and May cautioned that neither multifamily nor senior housing expertise were a simple transition into active adult. “Our customer is very discerning,” added Roslovic, whose company has five projects in Ohio. “They are usually coming from a home and think hard about where to spend their money.” The Treplus strategy is to select three sites in a metro area. The company builds communities with roughly 120 single-story cottages. “Municipalities are getting more difficult to deal with,” noted Roslovic.   

Both developers emphasized the importance of working with a local team of attorneys, engineers, and construction crews. Another key is understanding the area’s culture and consumer preferences.  

Active adult communities should be located near retail shops and service providers.  “I like in-fill locations,” said May. “It’s all about activity, connectivity, and accessibility.” 

Rental rates are market dependent. But generally, Treplus apartments are priced 20% over multifamily products and 40% under independent living products. 

May looks at the same data but generally uses other active adult project pricing as a reference point.  “It’s all about selling the value proposition,” said May. Active adult is not a need-based product, he added, but the consumer wants to feel like they will be happier and have more fun at the community.

Caroline Clapp leads a session at the 2024 Spring Conference with veteran active adult developers: Jane Arthur Roslovic, CEO and co-founder of Treplus Communities; and Robert May, managing director of Avenida Partners.  

Desirable Tenants 

The active adult tenant profile is attractive to potential investors. Residents typically rent for a period of 5-10 years, lengthier than both traditional multifamily and independent living residents. Compared to traditional multifamily, active adult residents generally are quieter; timelier with payments; and less destructive of property due to lower turnover. “They’re not as sensitive to rent increases either,” said May.  

Most renters are downsizing from bigger homes, and designs should take that into account. Communities feature large apartments or attached cottages or villas. Units have lots of storage but no stairs.   

A hospitality approach is key. Both developers agreed that successful lease-up and operations largely depend upon the on-site lifestyle coordinator.  “You can’t sell the lifestyle without a lifestyle coordinator,” said May. “They are a critical part of the value proposition.” The lifestyle coordinator also provides a tenant feedback loop to the leasing office and property manager, further bolstering residents’ hospitality experience.   

Treplus has a resident activity committee that works with the lifestyle coordinator to put programs together. The company has one lifestyle coordinator that serves the organization’s four communities in Columbus, Ohio, and its newly opened community in Dayton. A sixth community is planned for Columbus.   

The final audience poll asked attendees for their largest barrier to entry or expansion in the active adult rental space, and access to capital was the first choice, followed by consumer education. 

Both developers agreed that pre-leasing is important and begins well before construction. “Education is key the minute you pick the site,” said Roslovic. Both developers build the community clubhouse first, which operates initially as a space for leasing and events. Stabilization at Treplus properties takes 24-36 months from groundbreaking.  

Avenida has an informal partnership with Greystar to handle property management. Treplus takes a different approach and self manages its properties.  

Both developers believe the active adult rental segment will become institutionalized as the capital markets improve and more investors recognize the opportunity. “There is demand out there,” said May. 

Conference attendees can view the entire Active Adult session on the conference app.

Unlocking Success: Navigating the Operator-Owner Relationship

In the dynamic world of senior living, the partnership between operators and owners holds the key to transforming ordinary buildings into vibrant, thriving communities.

In the dynamic world of senior living, the partnership between operators and owners holds the key to transforming ordinary buildings into vibrant, thriving communities.

Operators are tasked with managing relationships with various owners, each with their unique needs, expectations, and strategic objectives. Conversely, owners oversee multiple operators, each bringing their distinct management styles, market insights, and operational approaches to the table.Success in senior living lies not merely in the individual efforts of operators or owners but in the seamless alignment of visions, strategies, and growth goals between these crucial stakeholders. 

The Heart: At the heart of every high-performing operator-owner partnership lies a foundation of continuous and open dialogue. This goes beyond addressing issues as they arise; it involves maintaining a constant flow of communication characterized by transparency, mutual respect, and collaboration. Whether it’s sharing successes, addressing challenges head-on, or providing regular updates, fostering a culture of open dialogue creates an environment where everyone is kept informed and aligned with the overarching objectives. 

At the operational level, transparent communication channels play a pivotal role in ensuring effective relationship between operators and owners. Operators possess valuable insights into day-to-day activities, resident satisfaction, staffing dynamics, and service delivery optimization strategies. By facilitating open dialogue around these operational insights with owners, operators enable their owner-partners to gain a deeper understanding of the operational intricacies and how they translate into financial performance. This mutual exchange of open communications empowers owners to make informed decisions, offer strategic guidance, and actively participate in driving operational excellence. 

The Core: Collaboration serves as the core of success in the operator-owner relationship. It involves more than just recognizing each other’s expertise; it requires a shared commitment to working together, leveraging complementary strengths, and aligning actions with collective goals. Collaboration isn’t merely a buzzword—it’s the secret that transforms individual efforts into collective achievements. By bridging the expertise of operators with the strategic vision of owners, collaboration creates a synergy that propels the partnership forward and drives sustained success in senior living communities. 

True collaboration emerges when owners demonstrate confidence in operators by entrusting them with operational data and insights. By leveraging critical data such as occupancy rates, resident demographics, and care outcomes, operators fortify their ability to drive performance improvements, implement data-driven strategies, and deliver superior outcomes for residents and stakeholders alike. This provides owners with confidence in current and future financial outcomes through informed data sharing. This trust-based collaboration fosters a sense of partnership, mutual accountability, and shared ownership of outcomes, laying the groundwork for long-term success and growth. 

Movement for Success: To propel these relationships toward success, implementing practical measures is vital. Here are five simple, yet effective steps to consider: 

  1. Establish Routine Communication: Regular calls foster open dialogue and trust.
     
  2. Implement Reporting Cadences: Introduce regular reports for transparency and accountability outside of required financials.
  3. Share Industry Insights: Provide trend insights for proactive strategy adjustments.
  4. Develop Annual Business Plans: Collaborate on strategic objectives and metrics annually. 
  5. Conduct Annual Review Meetings: Reflect on performance, celebrate achievements, and plan for growth. 

Building a robust operator-owner partnership requires a comprehensive approach rooted in understanding, communication, collaboration, and trust. Mastery of these crucial elements cultivates a partnership that transcends individual interests, nurturing a culture of innovation and excellence.  

Through this synergistic approach, stakeholders enhance the performance of senior living communities, enrich residents’ lives, and contribute to the broader community’s well-being. By deepening their commitment to open dialogue, collaboration, and trust, stakeholders unlock the relationship’s full potential, propelling sustained success and growth in the evolving senior living sector. 

Justin Hutchens, NIC Data & Analytics Conference Program Chair

This year’s Conference Chair, Justin Hutchens, EVP Senior Housing and Chief Investment Officer, Ventas, shares his thoughts on the upcoming gathering and what attendees can expect at this year’s event.

On May 21-22, 2024, NIC will host its second-annual Data & Analytics Conference. This year’s Conference Chair, Justin Hutchens, EVP Senior Housing and Chief Investment Officer, Ventas, shares his thoughts on the upcoming gathering and what attendees can expect at this year’s event.

NIC: This is the second year for the NIC Data & Analytics Conference. What sets this conference apart from other industry conferences?  

Hutchens: This conference is the first of its kind focused on the behind-the-scenes technical expertise that ultimately drives management reporting and analytics. 

NIC: What can attendees most look forward to when we all convene in mid-May?  

Hutchens: Attendees should leave informed and inspired to elevate their approach to creating and utilizing data analytics to support successful outcomes in their senior housing business. 

NIC: Do you have other thoughts you would like to share as individuals think about the value of attending the NIC Data & Analytics Conference?  

Hutchens: I encourage data scientists, analysts, and their respective leaders to attend the conference and be part a of the exciting early stages of advancing senior housing analytics. 

For more information on the NIC Data & Analytics conference, and to register, click here.  

Tech-Enhanced Senior Living: Insights from the 2024 NIC Spring Conference

The 2024 NIC Spring Conference saw a dynamic convergence of senior living operators and technology companies at the Innovation Lab, “Enhancing Health Outcomes Through Innovation: Tech-Enhanced Senior Living.”

Led by Moderator Abby Miller Levy, Managing Partner & Co-Founder of Primetime Partners and vice chair of NIC’s AgeTech Committee, and featuring panelists Amy Silva-Magalhaes, COO of The Bristal Assisted Living, and Greg Furst, Technology M&A Strategy Consultant at Omega Healthcare Investors, the session aimed to explore the transformative potential of technology in senior living. 

Abby’s strategic approach to kickstart the dialogue included polling session attendees, which uncovered a notable presence of tech vendors. This established the foundation for an insightful discussion on the best approaches and challenges with technology implementation, the complexities of the relationship between technology companies and senior living partners, and the emerging technologies making waves in the senior housing and care industry. 

The panelists shared invaluable insights into the strategic prioritization of technology roadmaps. Mr. Furst emphasized aligning tech investments with organizational goals, underscoring the importance of budgeting, estimating costs, and assessing ROI. Ms. Silva-Magalhaes complemented his suggestions by stressing the significance of end-user inclusion and piloting options to ensure seamless adoption and user satisfaction. 

Transitioning to implementation strategies, Mr. Furst outlined recommended dos and don’ts, emphasizing thorough vendor diligence and alignment of expectations. This sentiment was echoed by Ms. Silva-Magalhaes, highlighting the inevitability of challenges and the importance of proactive planning to mitigate glitches. 

The session progressed as Ms. Levy introduced an interactive activity, encouraging attendees to break into groups and identify various pain points and best practices for the technology implementation process. Participants discussed several challenges, such as the growing demand for robust resident tech support, the significance of user-friendly interface design, and the crucial role of reliable Wi-Fi infrastructure in supporting technology systems. 

Some of the best practices shared included prioritizing user-friendly design over complex technology, setting micro goals for employees to ensure successful technology implementation, planning for potential failures in design and implementation, conducting weekly meetings to explore sales opportunities and maintain team alignment, and establishing a resident tech committee within communities to enhance implementation efforts and garner support. 

In a rapid-fire conclusion, Abby facilitated a recap of each group’s findings, fostering collaborative problem-solving and knowledge exchange. This segment provided attendees with the opportunity to relate to one another’s professional journeys and depart from the Innovation Lab equipped with actionable insights gleaned from diverse perspectives, thereby enriching the discourse on tech integration in senior living. 

Overall, the Innovation Lab served as a catalyst for exploring innovative solutions and fostering collaboration between tech vendors, capital providers, and senior living operators. It underscored the transformative potential of technology in addressing the unique challenges faced by older adults, paving the way for a future where technology plays a pivotal role in promoting health, wellbeing, and quality of life for older adults. With strategic planning, user-centered design, and proactive implementation, the vision of tech-enhanced senior living can be realized, ushering in a new era of holistic care and improved health outcomes.