As the medical needs of residents grow increasingly complex, seniors housing owners and operators are forging more partnerships with healthcare providers and networks.

The collaborative approach already shows promise to reduce resident hospitalizations, increase assisted living length of stay, improve resident satisfaction and provide support to overstretched staff.

For example, the big real estate investment trust Welltower (NYSE: WELL) has taken several steps to partner with healthcare organizations as part of its seniors housing strategy.

In 2019, the company partnered with the nonprofit health system ProMedica to acquire the HCR ManorCare portfolio of skilled nursing and senior living communities. ProMedica offers a Medicare Advantage insurance plan for residents, allowing the provider to more closely manage and coordinate their care.

Last September, Welltower formed a partnership with insurer Anthem and its affiliate CareMore Health. Residents who enroll in the Medicare Advantage insurance plan have access to teams of medical professionals who provide care on site at Welltower-owned buildings.

Also, Welltower recently announced its intention to form a partnership with Philadelphia-based Thomas Jefferson University and Jefferson Health. Expected to be finalized in the next 90 days, the agreement will create a joint venture in which Welltower would acquire a stake in certain Jefferson real estate assets.

Additionally, Jefferson’s clinicians would provide care at Welltower senior housing, assisted living and memory care communities throughout the region as well as future ones the organizations could build together.

“These partnerships with CareMore, ManorCare and the impending partnership with Jefferson Health are about making our real estate more consequential to where and how healthcare is delivered, and working in partnership with best-in-class payors, providers and innovators to achieve strong health outcomes and reduce the overall cost of care,” said Mark Shaver, senior vice president, business strategy and health systems initiatives, Welltower.

Partnership Provides Easy Access to Medical Services

The CareMore partnership is already producing results.

CareMore’s senior living solution—called “Touch”—has been rolled out to a handful of Welltower communities operated by Belmont Village Senior Living and SRG Senior Living. Most of the communities are in California.

In 2020, Welltower plans to expand the CareMore program to five more states with five additional operators. CareMore is based in Cerritos, California, and has operations in nine states and the District of Columbia.

SRG Senior Living introduced the Touch program last August at six of its buildings. The company plans to offer the program at another six buildings early this year.

“We are extremely happy with the program,” said Isaac Hagerman, vice president of health and quality at SRG, Solana Beach, California. “The program is a more cost-effective insurance solution for residents.”

Residents who are enrolled in the program have easy access to medical services. “There’s no more waiting,” said Hagerman. CareMore’s nurse practitioner sees residents on site. Mobile lab tests and x-ray units are brought into the community. Hagerman said the CareMore model is a good solution for assisted living because it cuts the red tape and provides immediate care for residents.

Belmont Village has offered the CareMore program at two of its communities for about 18 months. The program is being expanded to two Belmont properties in Houston, and three in the Los Angeles area.

“We’ve learned a lot,” said Sheri Easton-Garret, senior vice president of clinical services at Belmont Village. She emphasized the collaborative nature of the program which involves building staff and CareMore practitioners.

CareMore currently provides healthcare services through its Touch program for 7,000 senior living residents in California, Arizona and Nevada. Most are insured through an Anthem Medicare Advantage plan. CareMore expects to expand this year to 17 markets in seven states.

In addition to general medical care, CareMore offers services such as behavioral health, podiatry, dental and social work services as well as a pharmacy team to review medications, dependent on the location. The CareMore team can also directly admit a resident to a skilled nursing facility in its network.

The CareMore program works best when at least 30% of residents sign up for the Medicare Advantage plan, according to Jim Lydiard, general manager of CareMore’s Touch program. “That’s when we become a difference maker,” he said.

For a more detailed discussion on the CareMore’s Touch program, see the February NIC Insider newsletter. CareMore’s Lydiard will be featured on two panel discussions at the upcoming 2020 NIC Spring Conference, March 4-6 in San Diego: “What’s the Physician’s Role in the Value Equation?” and “Planning for the Care Needs of the Forgotten Middle.” For details and to register for the conference, visit nicevent.org.

The Labor Department reported that there were 225,000 jobs added in January. This was more than the consensus estimate of 165,000 and marked the 112th consecutive month of job gains. For all of 2019, average monthly gains were less at 175,000. For 2018, monthly gains averaged 193,000 and for 2017, monthly gains averaged 176,000. The latter data points were revised from prior estimates.

Revisions also added several jobs to the prior two months. The change in total nonfarm payroll employment for November was revised up by 5,000 from 256,000 to 261,000 and the change for December was revised up by 2,000 from 145,000 to 147,000. Combined, 7,000 jobs were added to the original estimates. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. After revisions, job gains have averaged 211,000 over the last three months.

Health care added 36,000 jobs in January and has added 361,000 jobs in the past twelve months. Ambulatory health care services added 23,000 jobs during the month and hospitals added 10,000.

The January unemployment increased to 3.6% from 3.5% in December when it was at a 50-year low. The underemployment rate was 6.9% from 6.7%.

Average hourly earnings for all employees on private nonfarm payrolls rose in January by seven cents to $28.44. Over the past 12 months, average hourly earnings have increased by 3.1%. For 2018, the year over year pace was 3.0% and in 2017 it was 2.6%. Reasons why wages are not growing faster include the retirement of highly paid baby boomers and relatively weak productivity growth.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work inched up to 63.4% in January from 63.2% in December, which had been the highest since August 2013.

The January employment report will support the Fed’s “on hold” stance, at least for the time being. In December, the Federal Reserve left interest rates unchanged and signaled it would stay on hold through 2020, keeping the Fed and its policies on the sidelines during the election year.

Recent changes demonstrate that healthcare delivery and payment models have entered a period of disruption. While this may not yet be a top concern for everyone, many industry leaders have already begun to consider, and even embrace, the effects these changes will have on seniors housing and care.  

Traditional players in the healthcare system are looking to provide better outcomes for lower cost and are rethinking their models — particularly as they relate to caring for an aging population. Healthcare players traditionally involved in creating networks to provide acute care are increasingly emphasizing wellness, care coordination, and management of chronic conditions in order to reduce and prevent acute care episodes.

This shift creates new opportunities for seniors housing and care providers who are willing to adapt. As new entrants and unusual partnerships continue to emerge, the walls separating healthcare and seniors housing are breaking down.

The 2020 NIC Spring Conference, held in San Diego next month, invites attendees to learn more about the disruption occurring as seniors housing and healthcare begin to converge.

During the conference morning general session: “Join the Disruption: Convergence of Healthcare and Seniors Housing,” a panel of experts will discuss why changes in healthcare delivery and payment models are occurring; how partnerships can slow the rising trajectory of healthcare costs and improve healthcare outcomes for high-need, high-cost frail elders; and how partnerships with healthcare providers and payors can generate revenue for seniors housing providers while improving resident quality of life and length of stay. NIC Founder & Strategic Advisor, Bob Kramer will be joined by keynote speakers David Nash, M.D., founding dean emeritus, College of Population Health at Thomas Jefferson University, Will Shrank, M.D., chief medical officer at Humana, Inc., and Dan Lindh, president & CEO, Presbyterian Homes & Services, for this highly enlightening discussion.

In addition to thought-provoking educational programming, the NIC Spring Conference offers a unique opportunity to make connections with other leaders in the field while gaining the latest data-driven industry insights. Bringing together more than 1,700 owners, operators, and capital providers, — plus numerous healthcare leaders — the upcoming NIC Spring Conference is a must-attend event for decision makers across the sector. Learn more about the conference.

In evaluating the attractiveness of a market for seniors housing investment or development, supply and demand metrics are fundamental data to examine, and layering on an assessment of rent growth and occupancy may provide additional insight. The following analysis shows the relationships between average occupancy rates and rent growth patterns for assisted living over a four-year timeframe—from 3Q 2015 through 3Q 2019—for the NIC MAP® 31 Primary Markets in aggregate—and then looks at the relative performance of individual markets.

The four-year timeframe provides a recent look-back at the time series’ peak assisted living rent growth, inventory growth and absorption, and the time series’ low occupancy rate. The abbreviated time frame seeks to mitigate any potential confounding effects of the Great Recession on the market fundamentals. As the data is considered, it is important to note that the results would differ if the study took a one-year, two-year, or ten-year look-back, with greater or lesser fluctuations in market dynamics on display with various timeframes.

Market-level occupancy and rent growth performance

As shown in the following chart, data was plotted for the four-year timeframe (3Q 2015 to 3Q 2019) to understand the relative performance of rent growth and occupancy trends for each of the 31 NIC MAP Primary Markets. The chart displays each market’s performance relative to each other and to the Primary Markets’ average for annual same store asking rent growth and average occupancy for this four-year period (for the Primary Markets, rent growth averaged 3.0% over this period, while the occupancy rate averaged 86.5%). The differing colors for the markets’ marks is simply to help distinguish each market’s plotting relative to that of the others.

• Nine markets in the upper right quadrant had higher than average annual rent growth (ranging from 5.6% in San Jose to 3.0% in New York City) and higher than average occupancy (ranging from 93.3% in San Jose to 88.3% in San Diego).
• Eleven markets in the lower left quadrant had lower than average rent growth (ranging from 1.5% in Detroit to 2.7% in Denver) and lower than average occupancy (74.6% in San Antonio to 86.2% in St. Louis).
• Six markets in the upper left quadrant had lower than average rent growth (ranging from 2.5% in Tampa to 3.0% in Minneapolis) and higher than average occupancy (89.4% in Pittsburgh to 86.9% in Tampa and Riverside).
• Five markets in the lower right quadrant had higher than average rent growth (ranging from 3.3% in Phoenix and Cincinnati to 3.0% in Houston) and lower than average occupancy (ranging from 86.1% in Cincinnati to 77.9% in Las Vegas).

  

The strongest performing markets—those with the highest assisted living average annual asking rent growth rates and highest average all occupancy rates for the four-year timeframe included San Jose, Portland, Sacramento, New York City, Los Angeles, San Francisco, Baltimore, Seattle and San Diego. Many of these markets have limited supply due to constraints such as significant land development regulations, physical constraints on geographical expansion, and extended entitlement processes and/or premium prices on land due to scarcity. Building seniors housing may also not be considered the highest and best use of land, with other types of real estate taking priority. Investors and developers in markets with these characteristics tend to have a long-term hold strategy and are typically rewarded with the ability to maintain or command higher rents because of relatively more restricted competition.

The weakest performing markets—those with the lowest assisted living average annual asking rent growth rates and lowest average all occupancy rates for the four-year timeframe included Detroit, Orlando, Miami, San Antonio, Dallas, Chicago, Kansas City, St. Louis, Atlanta, Philadelphia, and Denver. What do these markets have in common? A simple answer may not be enough as there may be a variety of influences, including but not limited to, demand fluctuations, several consecutive quarters of sustained construction, price pressures from new seniors housing inventory competition or oversupply, lost market share to alternative options for housing and/or care such as age-restricted multifamily apartments, home health services, co-housing, aging-in-place technology, and adverse local economic conditions.

The table below describes the commonalities of each quadrant in the scatterplot chart discussed above for the four-year timeframe. In addition to the assisted living all occupancy rates and average annual same store asking rent growth rates that were diagrammed in the scatterplot chart, stabilized occupancy (defined by NIC as properties that have been open for at least two years or, if open for less than two years, have already reached a 95% occupancy), the percent difference (i.e. “gap”) between the all and stabilized occupancy rates (which denotes the percentage of units still in lease-up), average age of properties in the market, net annual absorption growth, net annual inventory growth and construction as a share of inventory were examined for each of the 31 Primary Markets to suggest potential patterns for further exploration.

Source: NIC MAP^® Data Service

Despite the recent softening in assisted living occupancy and rent growth over the four year timeframe, some markets have experienced high rent growth matched with high occupancy, some have seen low rent growth matched with low occupancy, and others have experienced high occupancy and low rent growth, or low occupancy and high rent growth. What are some of the potential connecting factors?

Markets with either (1) strong absorption of new inventory, (2) a lull in cyclical construction, and/or (3) high barrier to-entry markets with limited new stock often have higher occupancy rates and can typically command higher rates of annual rent growth. In contrast, saturated markets—and markets with sustained construction cycles—may experience suppressed rent growth and lower occupancy rates for multiple years until demand catches up with supply. Under such conditions, operators may struggle to attract enough residents to fully lease-up a market’s new and existing units and may react to occupancy pressures by wholesale reductions in asking rents, and/or by offering point of sale concessions to offset and moderate revenue lost to vacancies.

Indeed, this analysis and blog post has only scratched the surface. Several questions may need to be answered with further research to understand what the key drivers of rent growth at the market-level are, including but not limited to:

• Influence of market saturation
• Age of inventory
• Timing of the construction cycle
• Geographic economic conditions
• Staffing costs
• Rising or falling target market income and home values
• Quantity and quality of existing and new inventory competition
• Consumer attitudes and awareness of seniors housing options
• Availability of alternative options for housing and/or care
• Demographic growth in age- and income-qualified households
• Changing resident acuity
• Levels of and duration of rent concessions

This blog has pointed out the wide differences in market performance by occupancy and rent growth and has suggested possible explanations for some of the disparities. However, to more fully understand rent and occupancy performance by market, an exploration of local market conditions and individual market dynamics should be considered.

If you’d like to learn more about the NIC MAP® Data Service, click here to visit our NIC MAP website.

Last year NIC launched seniorcare.nic.org, a website offering the latest information on seniors housing and care collaborations with the healthcare sector.  Providing curated resources and news articles relevant to the new partnerships, innovations, and business deals that are reshaping America’s seniors housing and healthcare landscape, the site offers insights into the rapid evolution of senior care.

In 2019, we posted more than  150 articles on seniorcare.nic.org, from a wide variety of outlets, including the Wall Street Journal, The New York Times, NPR, Forbes, The Boston Globe, every seniors housing and care sector journal, several medical journals, and a growing number of healthcare industry outlets, such as Modern Healthcare, Fierce Healthcare, and Home Health Care News, among others.

Judging by the quantity and size of deals announced just in the latter half of 2019, it appears that numerous organizations—including some of the nation’s largest businesses—are taking steps to adapt to a changing landscape. Stories highlighted the innovative new business models, technological advances, and emerging business strategies which are having an impact on the world of healthcare – and on seniors housing and care.

Below are a few journalistic highlights from the past several months, each of which illustrates a key trend that is reshaping housing and healthcare for America’s seniors.

Big Deals:

Many business relationships are being formalized, largely in response to the new challenges and opportunities presented by an evolving healthcare system, shifting demographics, advancing technologies, and the overarching need to improve outcomes at lower cost. A review of the headlines reveals new deals and partnerships, big and small, all of which may potentially impact the sector. Major recent deals include:

Walmart and Doctor on Demand and Amedisys

CVS and Aetna

Maplewood Senior Living and Penn Medicine

Leverage Health and WellBe Senior Medical

Amazon and PillPack and Health Navigator

Microsoft and Humana

Medica, Genevive, Presbyterian Homes & Services – and 9 other Senior Living Companies

Welltower and CareMore and Senior Resource Group and Belmont Village

Best Buy and GreatCall and Critical Signal Technologies

Sam’s Club and Humana and 98point6

New Partnerships:

Forbes senior contributor Bruce Japsen outlined the newly announced partnership between Microsoft and Humana. The headline, “Microsoft, Humana Partner To ‘Reimagine’ Healthcare For Aging Boomers” reflects growing awareness of the opportunity inherent in a huge population that is growing older and will otherwise stress the current system to its breaking point.

“With an estimated 10,000 people joining the Medicare system daily, we have a tremendous opportunity to address the growing demands on the health care system by improving health outcomes and lowering costs,” Microsoft corporate vice president of health technology and alliances, Dr. Greg Moore, said in a statement announcing the partnership.

“The next step for medical records is to go beyond the collection of information to the delivery of insights,” Humana chief medical and corporate affairs officer Dr. William Shrank said. “Microsoft technologies offer Humana the ability to apply sophisticated analytics to our members’ records, and in turn, provide clinicians and care teams with the opportunities to make a difference in patients’ health.”

Senior Housing News highlights another recent partnership in Tim Mullaney’s article, “Welltower, CareMore Initiative Drives Senior Living Integration with Medicare Advantage”. As Mullaney writes, “The participating organizations anticipate that the initiative will lead to improved health and wellness for senior housing residents, which in turn will reduce hospitalizations and other costly interventions and increase length of stay.” CareMore, which is affiliated with Anthem, one of the nation’s largest health insurers, was looking to scale its successes working with senior living providers on a facility-by-facility basis, according to Dr. Sachin Jain, CareMore’s president and CEO:

“As we started to think about how we could make an even greater impact on American health care and further refine this model, we started to look for broader national partners,” Jain said. “Welltower was an obvious choice.”

For its part, Welltower, a REIT with a portfolio of about 1,300 properties nationwide, is pursuing a strategy that anticipates healthcare increasingly moving out of hospitals and into residences. It is building closer relationships with healthcare systems and payers, while shifting the focus of care – and value – into the senior living realm.

As Welltower Senior Vice President of Business Strategy and Health System Initiatives Mark Shaver said, “We believe this will make our sites of care more consequential.”

New Models:

Within the space of a week last fall, three of America’s biggest retailers announced plans to leverage health care’s move to the home. The Home Health Care News article, “Best Buy, Amazon and Walmart Leading Retail’s Race into Home-Based Care”, by Bailey Bryant, summarizes the separate plans, all of which place big bets on a major shift in the delivery of healthcare in America.

Best Buy announced its goal of supplying “5 million seniors with health monitoring services in five years.” Analysts at Morgan Stanley said of the company’s plans that, “Looking ahead, we believe Best Buy’s deeper push into health monitoring, related efforts to reduce medical expenses for insurers, and right to share in the cost savings represent a significant revenue and profit opportunity in the long term.” The company’s healthcare moves could bring in an additional $46 billion in long term revenues – which is more than Best Buy’s current annual revenues of $43 billion.

The article goes on to point out that, “When it comes to in-home care, Amazon is getting its toes wet with employees first. Last week, the company announced the rollout of Amazon Care, a new virtual care clinic pilot available to Seattle-based employees and their dependents.”

Walmart is also mentioned, “Finally, Walmart is getting in the home-based care game with a prototype of its new Walmart Health clinic, which features an Amedisys Inc. (Nasdaq: AMED) kiosk designed to help educate customers and potential patients on home health services.

Innovation:

A HealthLeaders article by Christopher Cheney, “Walmart, Doctor on Demand Join Forces in Primary Care Telemedicine Deal,” discusses how the retail giant plans to use telehealth to deliver quality primary care to its employees, who pay a $4 copay.

As Cheney writes, “The new partnership provides primary care and behavioral health services via video-based telemedicine to Walmart employees and their dependents in Colorado, Minnesota, and Wisconsin.

According to Doctor on Demand CEO, Hill Ferguson, “We can help patients manage chronic conditions from the comfort of their home, keep them out of the emergency room, and make sure that if they need in-person care that we can route them to the right place where they will optimize for quality and cost.”

Modern Healthcare recently published Shelby Livingston’s article, “CVS’ first HealthHUBs driving more prescriptions, clinic visits,” delving into what appears to be a major early success for the pharmacy giant’s innovative new pilot program.

As Livingston summarizes, “The HealthHUB locations cater to everyday needs, with a special focus on chronic disease management, offering services like blood draws, sleep apnea assessments and diabetes care. Patients can access one-on-one and group counseling with a dietitian in the store. The stores also feature a care concierge to educate customers about the services and connect them with in-store providers.”

Venture “Catalyst” firm Leverage Health and WellBe Senior Medical announced a strategic partnership to “provide specialty geriatric care to frail, polychronic seniors in Medicare Advantage health plans.”

A McKnight’s Long-Term Care News piece, titled “Leverage Health backs WellBe concept in new partnership,” by Kimberly Marselas, quotes WellBe founder and CEO, Jeff Kang, “Building a deep relationship with our patients and physically being in the home allows our team to address both clinical and social determinants of health directly. The result is immediate, dramatic improvement to the person’s overall health and wellbeing as we follow the patient across every care setting.”

The pieces referenced above are just a sampling of those available on www.seniorcare.nic.org. Our team regularly updates a growing list of articles, specially curated for relevance. To stay on top of what’s happening across the seniors housing and care spectrum, in terms of collaborations, partnerships, and innovations involving healthcare, keep an eye on our list, and link to the growing body of journalism that is tracking how our system is evolving, as it happens.

This is an updated version of an article that originally appeared in the Housing & Healthcare blog on seniorcare.nic.org in November 2019.