NIC Chats Podcast with Bob Kramer

Introduction: (00:00)
Welcome to NIC Chats: ideas and inspiration from senior living leaders with host Beth Mace. Mace is the chief economist and director of outreach. Get to know some of the people influencing senior living today and perhaps learn a thing or two from their experiences. This episode of NIC Chats is brought to you by Capital One. As one of the top 10 financial service providers in the U.S; Capital One can offer a unique combination of financial strength, personal attention, and flexible products.

Beth Mace: (00:31)
Hello, and welcome to NIC's inaugural podcast that we're calling NIC Chats. My name is Beth Mace. I'm the chief economist and director of outreach here at NIC. I'm thrilled to be starting this series of podcasts. The focus of the podcast will be talking to people that I find interesting with ideas that I think you'd like to hear about. I promise you some humor, engagement, authenticity, insights, inspiration, and hopefully an a-ha moment when a light bulb may go on for you. I'm delighted that our first NIC Chat will be with Bob Kramer. As most of you know, Bob was a co-founder of NIC more than 30 years ago. He is currently a strategic advisor to NIC and he recently just launched a new organization called Nexus Insights. Most of you have attended one of the NIC conferences, which now draw more than 3000 people. When Bob started these conferences 30 years ago, they attracted just a few hundred people.

Beth Mace: (01:29)
We've also just announced the dates of the 2021 NIC fall conference that will be held in person in Houston from November 1st to November 3rd. And also we've just announced the merger of the NIC MAP data service, initiated under Bob's leadership, has now partnered with VisionLTC to form NIC MAP Vision. So with that let me tell you a little bit more about the podcast series. Each time we have a podcast, you're going to find a little bit of standard structure. Initially, there's going to be what I call three statements and only one is true. And I'll talk you through that in a minute when we get to that, and then I'm also going to have three standard questions that we're going to ask every speaker that we have. Those standard questions will include: what's the largest challenge facing our industry. What is one thing that we can do to grow talent in our industry?

Beth Mace: (02:23)
And what's one innovative way or idea on how to strengthen our industry as we go forward. So with that, we'll start. And Bob, thank you for joining us today.

Bob Kramer: (02:33)
I'm delighted to be with you, Beth. This should be fun. I hope we get a little bit more than just a little authenticity, but we'll work on it.

Beth Mace: (02:40)
We'll get a lot of authenticity. So I'll start off by talking about the three statements and only one is true. And I want you to start thinking about this. And for those of you who know Bob, it might be immediate to you what the truth is and what the non-truths are. So the first one, Bob went to the very last concerts of Jimmy Hendrix, Janice Joplin, and Jim Morrison, part of The Doors. That's the first one, the second one, Bob Kramer has seven grandchildren. Third, Bob Kramer has started two companies. So as the podcast goes on, we'll reveal the answers to those. So Bob, why senior housing of all the opportunities and career paths out there, why did you choose to devote your career to this sector? Now I might add that given your contagious and passionate enthusiasm, the industry is pretty lucky that you chose this path, but what was that all about? How did you get here?

Bob Kramer: (03:42)
It was one of those as often happens fortuitous type circumstances, Beth, I was a freshman legislator in Maryland in the early eighties, there was a troubled not-for-profit CCRC. I was known as a consumer rights advocate. Then speaker of the Maryland house, Ben Cardin, as a member asked me as a consumer rights advocate in the house if I would serve on a task force to rewrite the CCRC regs. I turned to my aid at the time, this is before cell phones and such things, put my hand over the phone and said what the heck's a CCRC. But that was my introduction to the industry, serving on that task force. A couple of months later, I had two admirals walk into my office. And when you're a 32 year old freshman legislator and you represent the US Naval Academy in the state legislature, you do what I did.

Bob Kramer: (04:33)
I stood up and said, yes, sir. And they said, son, our buddies and we want to build ourselves a retirement community and we need your help. That then went on to become Ginger Cove. I spoke at their groundbreaking, but it took me a while to find out that Life Care services had actually put these guys up to approaching me saying, this is your state rep, he serves on this task force that is going to rewrite the regs that will control our ability to develop this community with you. You better get to know him and make him your best friend. So really those two things brought me into the industry. And then when Bill Myriad decided to take Myriad into senior living, I had gotten to know him through another not-for-profit that started on whose board he served. And I was approached by his governmental affairs director and asked if I would be the head of a trade group, which was called NASLI, National Association of Senior Living Industries.

Bob Kramer: (05:31)
This was 1985. I was still in the legislature. And so those things are what brought me in; why did I stay? Because quite frankly, I saw it was going to be an enormous social challenge to our country for how we were going to address this. And it was an issue namely, how we provide for, care for, and how we think of and engage elders in our society. That energized me and I saw I wasn't the only one: Tony Mullen in particular, Al Holbrook; we saw there was going to be a huge need for capital. And that's what brought about NIC, recognizing it's not going to be a public sector solution alone.

Beth Mace: (06:16)
Great. Thank you. So Bob, you quote, "semi retired" from NIC a while back and now you've created a new organization called Nexus Insights. Where are you going with that? And what are you still doing with NIC?

Bob Kramer: (06:31)
Well, as you know, Beth, I don't believe in a concept of retirement. I like to think of re-firing and re-engaging. I started nexus because when COVID happened, I saw for at least for my lifetime, a once in a lifetime, just moment of disruptive innovation. And I thought I had something to say, and it's a moment that I think needs and rewards agent provocateurs, and that's a role I enjoy playing. So Nexus is more of a think tank. It's a content dissemination platform to really, provoke debate and discussion and provide unvarnished insights that can help all the different types of companies pivot from the lessons learned from COVID as well as the new customer we're going to be serving.

Beth Mace: (07:20)
Super. So in our three statements, only one is true, one of the questions was that you've started two companies. So we have NIC and now we have Nexus Insights. Were there others? You don't have to go through each one, just how many approximate companies?

Bob Kramer: (07:35)
About seven.

Beth Mace: (07:36)
Seven, all right. So there, we know that first statement was not true in terms of just two companies. All right. So I've known you for a long time. You're an incredibly busy person. You've been involved in a lot of not-for-profits, served on boards, you volunteer and on top of those job responsibilities, of course, is your life. So what's your secret. Tell our audience that are listening in and, especially if they're younger, how do you possibly balance work and family life? And where do you get, honestly, where do you get your energy and enthusiasm? We'd like to bottle it up and sell it.

Bob Kramer: (08:06)
As you know, Beth, I'm a person of deep faith who also believes that the glass is half full, not half empty. I'd also say that it's a matter of, you have to be willing to spell out your priorities, which I think means write them down and then invite people to hold you accountable to those priorities. But even more, if you're passionate or if you're a person that gets caught up in something, you will lose sight yourself of your own priorities. And you have to have people that you've invited into your life to hold up so to speak, your schedule and your priorities. That's what led to my getting out of politics. I had a group of friends. I gave them my priorities and they held up my schedule and my priorities and after four years in the Maryland legislature said, well, Bob, what do you think?

Bob Kramer: (08:58)
And it was pretty clear to me as I was about to become a likely chair of a major committee that, you know, my wife was going to basically be a single parent, raising the kids in the future. And that wasn't right. It wasn't priority. So I think it's if you write things down, that's a step towards accountability. The other is inviting people to hold you accountable. You will not hold yourself accountable because we just don't see our own flaws. And we, we reposition mentally our flaws as strengths. You know, we believe that a need constitutes a call. We believe that urgent means critical means trumps all other priorities and it doesn't necessarily.

Beth Mace: (09:46)
So I find that one of the a-ha moments. So, um, I think that's really important for our listeners to hear that, to understand what your priorities are, write them down and be accountable and have someone else who is your friend or a family member hold you accountable.

Bob Kramer: (10:02)
It probably should not be a business colleague or someone who's kind of, you know, like if I had asked another politician to hold me accountable, that person would be just as susceptible to what I was susceptible to. So it really needs somebody, a personal friend whose kind of independent of the sphere in which you're likely to get consumed.

Beth Mace: (10:30)
Okay. So, I have one more personal question then we're going to get more into the industry questions. So just briefly, who was one of the biggest influencers in your life?

Bob Kramer: (10:41)
That's, that's really pretty straight forward. I would say it was my dad, cause my dad forced me to learn how to think and to learn how that if I didn't understand the other side to an issue or a question, then I didn't know the issue or question. And you know, growing up in Washington DC when, my sisters by now were off at school and, I was a lot younger and at dinner table, if you didn't come to the dinner table, having read the op-ed page of The Post, it was like coming unprepared for the dinner. And so we'd say grace, and then my dad would say, so what'd you think of so-and-so's piece? And no matter what the issue, whatever position I took, my dad always took the opposite. And you know, I compared notes with my sisters years later and we realized we often times didn't have a clue what our dad's position was, but he was determined that we would not be simplistic in our thinking.

Bob Kramer: (11:52)
And he was determined that we would understand differing perspectives on an issue and that you were not informed if that wasn't true. And when I was first elected to the legislature, I was overwhelmed with lobbyists. I told my aid to give them all 15 minutes. And after five minutes of intros, I told them you have 10 minutes to give me the three most influential arguments of the opposing position for that which you want to lobby me. Two thirds of them couldn't do it. And I told them, I don't want to ever hear from you again.

Beth Mace: (12:28)
All right. So another a-ha moment for those especially young folks out there, to really think about when you're arguing and I've argued with you myself, Bob in my life. You're pretty good at it. So you had training as a young man. So that would be another sort of a-ha moment. When you really think about an argument to always put a hat on how the other viewpoint, both from an empathy point of view, as well as for an understanding of the topic.

Bob Kramer: (12:51)
When I was in the legislature similarly, I had different sort of groups of people put around each sort of key issue at the time, but that was a deliberately diverse group. I chose them because they didn't all think the same way. And that was critical because otherwise, and you see the net result of it in today's society, where we have so much siloed thinking of people that only hear views that reinforce their own. And, you know, the reality is that you can't get things done as a society where everyone thinks alike because in the reality is people don't really. And so you've got to get to understand, you know, the question isn't what's his opinion, but why does he hold it? Or she hold it? If you don't understand that you can't learn how to communicate and how to persuade.

Beth Mace: (13:40)
Okay. So now we're going to switch a little bit. I want some views on, on the industry. The senior housing and care industry. So this is going to be one of our standard podcasts questions. What's one of the largest challenges facing our industry today? Now we're just coming out of, well, hopefully we're coming out of a pandemic ;as we're recording this it's March, 2021. So briefly, what would you view as one of the largest challenges and there's many, but just highlight one.

Bob Kramer: (14:06)
I would say we have a twin challenge. And the reason I say that is we're liable to overreact on one and then miss the other. And the twin challenges are to learn the lessons and apply them from the COVID pandemic at the same time that we prepare for a totally new customer. And by that, I mean the boomer. And we can overreact on COVID as if it's all about safety and raising the bar on prevention of disease and so forth, and miss how different a customer, this new customer is going to be in the boomer. Similarly, we can be so focused on the boomer that we forget the sort of basics of how the new table stakes for senior living are. Have you fully edited the 21st century world of digital? When it comes to transparency, is your immediate thought, why not versus why should I? You will not have credibility and trust of your audience, of the public,

Bob Kramer: (15:13)
and most of all of residents and their families, if you're not transparent. And so just things like that, the new reality that, you know, saying that you have a van during the day with a lift and that you have a great relationship with the local EMS. And that's how you meet the healthcare needs of your residents? That is a pre COVID statement that will make you a failure in the future, in the senior living business. So those two things adapting and preparing for a very new customer, especially, I mean, if you're building buildings today, you're designing ultimately for boomers and at the same time learning the lessons from COVID, there were a lot of lessons, obviously, some of them very painful,

Beth Mace: (16:02)
Okay. So, I consider you one of the industry's true visionaries. My first question is personal: is this instinctive, or was it something that you groomed with some type of discipline strategy and then my second question is with your crystal ball, your visionary instincts, where do you think the industry will be 10 years from now? So let's say it's 2030. What does it look like? What does our industry look like?

Bob Kramer: (16:27)
Well in your first question, I really think it does go back to my dad and also the Quaker schooling that I had. The Quaker schooling was incredible in terms of critical thinking. And I mean that in a creative sense, most people think of critical thinking as almost a bad thing, but critical thinking when done rightly makes you able to be creative, come up with new ideas, think strategically. I love doing that. I mean, I love assessing trends. I love being an agent provocateur. I love looking at things from six different sides and then seeing what things one can learn from doing that. Put simply, I would say that 1990 to 2020 was the first-generation product in private pay senior living. 2030 to 2060 will be the second generation product. The first-generation product, the customer was the greatest generation.

Bob Kramer: (17:25)
The second generation product, the customer will be the boomers. In between, pre COVID, I had seen this decade that we're in as the period of transition, such that topics that I saw as critical that we were doing at the spring conference, like tele-health and senior living. I understood that, yeah, in 2020, as opposed to 2030, we had an audience of 15 or 20 people. Then COVID happened. And COVID, as Joe Coughlin likes to say, propelled us into our future faster. And the change I thought would take a decade, much of it took a matter of months. So 2020 became this exclamation mark of the inadequacies of our present model and how we're going to have to pivot for the future. And so that makes it a really painful year, but also at the same time, that's the silver lining. And so things that I thought, I thought the first half of this decade, we'd be dealing with the innovators and early adopters.

Bob Kramer: (18:28)
And it wouldn't be until the second half of the decade that we began to see full scale adoption of many things that now are being actively talked about. How do I integrate, healthcare services and chronic disease management on-site? How do I bring healthcare services to my residents? Realizing that having an all-purpose room and relying on that for community and engagement inside your four walls and having a van and saying, that's how we keep people connected outside our walls? To me, that worked1990 to 2020, that will totally fail the tests for the future. So, you know, we're going through a period of a lot of change now, lessons from the pandemic, lessons also in terms of the boomer. Ultimately, our industry will rise and fail with the boomers of whether or not it offers a compelling value proposition.

Bob Kramer: (19:33)
The table stakes have been raised for care, but if we're only about care, technology will enable people to receive care at home. We have to ultimately be about aspirational living. And that is about the benefits of congregate in terms of the sense of connection, the sense of purpose, the sense of engagement. And we, in a way got a shock in the last year because we've so followed the phrase people like to use though I don't like it. Acuity creep in our residents that we've more and more just found it easier to sell care and to not sell lifestyle and engagement. But ultimately that is our real value proposition. And those that are successful, realize that and are going to be all in on that while realizing too, they're going to have to be able to answer basic questions about vaccinations and PPE and what will happen if you have a lockdown just because of the flu next year. And so the stakes have been raised in terms of health and prevention and disease prevention and care, but ultimately it's about an aspirational lifestyle. If we offer that we wouldn't be able to build communities fast enough.

Beth Mace: (20:58)
Alright so one of my standard podcast questions for NIC Chats is one innovative idea on how to strengthen our industry. So is that aspirational living?

Bob Kramer: (21:07)
Yes, but I would also say, speaking back to sort of my roots and your roots, both at AEW and now at NIC, we have to rethink capital and capital structures in our industry. We have capital that's all focused on valuing the real estate. And ultimately we have a ton of capital, I mean, it ebbs and flows, but for the real estate, for the buildings,. We need to think through operations and how we're going to have the kind of capital we need for operators to invest in technology, to invest in staff, to pay what they need to pay, to offer a real career path for their staff to provide the culture that they need to. And I don't think we're there yet; we're not even close.

Beth Mace: (21:59)
Okay. I agree with you and one of the comments you just made in there was staff, so that's a big issue for our industry, and this is another, this is the third standard podcast question. What is one way to grow talent in our sector?

Bob Kramer: (22:14)
First of all, our sector is an incredible place to be able to do well while doing good. And to do that though, we're going to have to have valid and good and transparent responses to the attacks on our industry because of what's happened in the last year. And this, the spring of 21, I, actually, many people, are breathing a sigh of relief. I think in terms of the perception of our industry, this spring will be the worst because we're now at the point of everyone, every elected body is going to have some type of hearings or task force about what went wrong, and look for somebody to blame. And it's often going to be our industry rightly or wrongly, but I think that first of all, there's the social need--one of the last isms in our society, that's powerful, but not addressed and not even articulated is age-ism.

Bob Kramer: (23:11)
And basically many of the problems we see, especially in nursing homes is because our society has been content to consign poor, frail elders to nursing homes, and basically consciously under-fund them and consciously not value the people, the services or the setting. But another thing I'd say is this decade, the most significant demographic thing happening this decade is the collapse of the traditional unpaid caregiver, so to speak workforce unpaid, and that means family members, especially adult children. AARP as you well know, Beth, back several years ago now did a study and they looked at the ratio of those 45 to 64 to those over age 80. It was seven to one at the time, by just 2030, just 2030, 9 years away it'll be four to one. What that means is enormous demand for what we offer, but the way I like to put it in business schools and hotel schools and senior living programs is we have enormous demand coming, but a customer that doesn't want and will for the most part reject today's product, that means enormous entrepreneurial opportunities.

Bob Kramer: (24:33)
It means there are enormous opportunities for young people that want to get into a business where rather than a set career path and work your way up over 20 years; if you've got great ideas, and if you get some experience in your early years, you can be successful very quickly because basically tomorrow's customer doesn't for the most part, want today's product, but the demand is going to be overwhelming. You're going to have to be innovative. You're going to have to be innovative about culture, innovative about your value proposition, innovative about how you put the financing together. So you don't basically overvalue the real estate and undervalue the operations. There are a lot of challenges, but if I'm someone starting out at18 or 25, or, I spoke to someone this morning who recently made a career change, he's in his early thirties. What an opportunity now. I mean, I'd love to not be in my early seventies and instead be in my early thirties, just the opportunity there in terms of demand. But I love being able to think about and implement new things. And this is tailor made for that because anybody that thinks that the boomers are going to buy the products we've offered the last 30 years is sadly mistaken and will soon go out of business, they will be the blockbusters to today's Netflix.

Beth Mace: (26:02)
Well, I think I mostly agree with you. But I do think that the opportunity there for young people is incredible. For those who are listening to this podcast I encourage you to really consider the senior housing industry. I've devoted my career, Bob's devoted his career, it's an opportunity that's only going to grow. And you actually do do well by doing good. So I'm hoping, we're going to wrap this up now, that you've actually gotten some great insights here. I got a few a-ha moments from Bob which I always do. To summarize those one: critical thinking. How important that is. Consider the other person's point of view. Make sure you understand your priorities and rank them and reconsider them as time goes on, actually write those priorities down. Consider where senior housing is going,

Beth Mace: (26:56)
Really understand who the consumer is today and who the consumer will be tomorrow. So, Bob, just before we wrap up at the beginning of our conversation today, we talked about three statements and only one was true and a while back, we did say that you had in fact started more than two companies. And we pointed that out. Now there's two questions left that our listeners want to know about. The other two statements were that you have seven grandchildren or that you had gone to the last concerts of The Doors, Janis Joplin and Jimi Hendrix. So, which of those statements is in fact true, and which is not true?

Bob Kramer: (27:33)
Well, what's in fact, true is the simplest one. My wife, Diane, and I have seven grandchildren. Now I did go to the last major concert of Jimmy Hendrix. I heard him do not only his rendition of the national anthem, but also of God Save the Queen. First, the national anthem at Woodstock and then God Save the Queen at Olive White in August, 1970. Now he died two weeks after that concert. He did actually give another concert in Germany, although there was pretty poor attendance, but he died two weeks after I saw him at Isle of Wight. As with regard to Jim Morrison and The Doors he performed at Isle of Wight in the dark without spotlights, because that's the only way he would perform. But he did keep performing at smaller venues. The band broke up though, that following December, in New Orleans, they played the last concert as a group. He then went on to continue writing poetry and died that following summer in Paris. So and Janice, I heard at Woodstock, she was not at Isle of Wight. She died about a year after Woodstock. She actually gave her last conference of all places at Harvard stadium in Cambridge, Massachusetts in August of 1970 and then she died two months later out on the West coast. So.

Beth Mace: (29:05)
Well, that's, that's amazing. I wish that people could see my face because every time I hear you tell the story, I've always delighted to hear that. So it is true. You went to, you saw all three of them, but it wasn't the exact last concert.

Bob Kramer: (29:16)
Indeed, in the summer of 1969, I was at Woodstock, Newport Jazz and Pop, Laurel Jazz and Pop, Fillmore East, Fillmore West. I sort of crisscrossed the country getting good music. And then in the summer of 1970, I was in Europe and that's when I was at Isle of Wight and also saw Joan Baez.

Beth Mace: (29:43)
I was going to ask you about Joan Baez. There's a bonus here. So tell us about what happened with Joan Baez.

Bob Kramer: (29:48)
Well, she performed in Montreux in, late July, I think it was, or early August of 1970. And after her second performance, I was dancing with some friends at the nightclub where she was performing in Montreux. She was at the bar, she wanted to dance. She asked me to dance and we spent the next four hours having a wonderful time dancing together. The club owner couldn't close the place down because this star wanted to keep dancing. So there are more stories where that comes from, but it was great fun and a wonderful evening and I was at Isle of Wight at her invitation. She'd invited me to come to Isle of Wight and said, I'm going to be performing there, you ought to come. And indeed we did.

Beth Mace: (30:40)
And more recently, Kim Campbell?

Bob Kramer: (30:42)
Well, Kim of course, I feel honored and privileged, not really long after her husband, Glen Campbell, passed away from Alzheimer's, Kim came and gave a NIC Talk at NIC, and also in subsequent years, Kim has come back. She enjoys our organization, and she's been a great dance partner. It was only after I danced with her and good thing, cause my ego, I would have been real apprehensive, that I learned that, when she met Glen and went on the blind date that led to her a long time marriage and, and love affair with Glenn, that she was a Rockette and is a professional dancer, and it's quite obvious, she's a fantastic dancer, but also again, just a wonderful person and great fun to be with.

Beth Mace: (31:37)
So that's great. So that's certainly a good legacy for us to be thinking about you and all those concerts. So thanks for sharing that.

Bob Kramer: (31:44)
Absolutely.

Beth Mace: (31:46)
Bob, we have one or two minutes left, anything you want to say to, to wrap up, in addition to my summary comments?

Bob Kramer: (31:52)
One thing I would just say to add to your summary comments, the more passionate or the more ambitious, and those are two different words, you are, the less likely you will be able to self police. And so that's why asking friends into your life to hold you accountable is so important because otherwise you'll be convinced that this bill you're working on... I remember at the time I was in the legislature, I had my legislative or political job. I had my day job so to speak, to support my family, because you weren't going to do it on a state legislator salary. And I had my family. In the immediate moment, it was always the family that seemed to be the most understanding because my constituents, since I represented a district right at the state Capitol, they expected me to be at every breakfast meeting, every community association meeting, every luncheon. similarly the job that paid the bills, you know, they expected me.

Bob Kramer: (32:59)
Yeah, it's nice that you're also a state rep, but you better get the job done. Here are your goals for the year. How are you doing? And so I'd always find myself rationalizing, going to the political meeting or saying on the weekends, I need you to work because otherwise I'm not going to get paid for my day job and the family over time, it's only so elastic. And so I am so thankful for the friends I had who were willing to, they didn't tell me don't run again, which I didn't, but they held up that mirror. So I just wanted to emphasize that, I guess I'll just close to say, this has been an incredibly painful time of black eye for much of our sector. At the same time my excitement about the future is huge. And in a sense, rather than this being a decade of a reset COVID has sped all that up and it sped up the opportunity for a reset and whether it's folks having to rethink financing models, because the financing models built upon certain assumptions and it just didn't work. And especially now our sector is so prime for outside disruptors. Why? Because right now we need to be making investments in the future in buildings, in technology, in staff. But we are exhausted collectively and we are resource and cash poor for the most part. That is a prescription for an outside disruptor to come in. And to me that's exciting, but it's also, hey, let's look candidly at the situation.

Beth Mace: (34:52)
So we need to be on our toes and be thinking of new ideas and be innovative and entrepreneurial. And the future is bright, is how I would wrap that up.

Bob Kramer: (34:58)
Absolutely. I would agree.

Beth Mace: (35:01)
So I'd like to thank you all for joining me for this episode of NIC Chats and thank you very much to Capital One for making it possible.

Beth Mace: (35:12)
Please rate and subscribe in your favorite podcast app and sign up for our email list at NIC.org/chats. I'm Beth Mace, and I look forward to sharing more ideas and inspiration with you on our next episode. Thank you very much. And Bob, thank you so much for your time and for joining us.

Bob Kramer: (35:29)
Thank you very much Beth, great fun as always. I wish we actually had the wine and the nice meal to be doing it over. That'll be next time when we're actually able to meet in person.

Beth Mace: (35:38)
You've got a date. Thank you. Bye.