Senior Living: Beyond the Nursing Home

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Once again, Boomers are about to reshape another industry. This time, they're out to prove that even in old age, you can live in style.

Until about 15 years ago, Americans, whose only shortcoming was that they'd succumbed to the terminal process of aging, had only two options: They could move in with the children and hire help, or they could shuffle off to the nursing home.

Then, in the mid-1980s, the elder-care industry launched a revolutionary concept: assisted living. The idea: Many older Americans needed such services as housekeeping, transportation, and access to hot meals, but not the kind of skilled care-giving that nursing homes charged a premium for. Assisted living was an overnight success, thanks largely to the demands of Baby Boomers who sought out new types of elder care facilities for their parents.

Now, the industry is preparing for its next incarnation: The legions of Baby Boomers, who will reach seniorhood over the next three decades. Of the American population, about 1 in 8 is now age 65 and older. In about 30 years, that figure will be closer to 1 in 5. In part, that's because Boomers will live longer than previous generations; Americans age 85 and over will triple in number by 2020, 1 Baby Boomer in 9 is expected to live to at least 90. For the senior sector, these staggering numbers have tremendous implications. Industry experts forecast the end of nursing homes as we know them. In their place, they say, will be a smorgasbord of new options that will allow seniors to live out their lives in home-like environments. "Today, we have Baby Boomers saying `Hell no, we won't go, and neither will our moms,'" says Bob Kramer, director of The National Investment Conference (NIC), a nonprofit education forum based in Annapolis, Maryland. "And if the Boomers want more for their parents, they are also going to want a lot more for themselves."

More "consumer-centric" models of senior-care environments - those focusing on the needs of the consumer - have already begun to emerge. Just ask Louis Poluzzi, an 82-year-old, former San Diego State football star, who moved into the Marriott MapleRidge, an assisted living facility in Plymouth, Massachusetts five months ago. Poluzzi lives with 14 to 16 other seniors in what is loosely termed a "cottage." It's a well-appointed, dorm-like environment where he has his own private bedroom and bathroom, but shares meals in a "country kitchen" with his cottage mates. "Family style," beams Poluzzi, who also shares a large living room area with other residents. "Just like home."

Poluzzi's infirmities are purely physical. Riddled with arthritis, diabetes and Parkinson's disease, he needs assistance with the simple tasks of daily living, such as getting in and out of bed, buttoning a shirt, or tying a shoelace. At MapleRidge, all the daily activities - depending on his needs for each day - are met. He also has access to personal laundry and barber services, scheduled transportation for his off-site doctors' visits and group trips, and regular poker games. Best of all, his childhood friend, Vince Baietti, visits him daily. Since he can no longer live alone, Poluzzi believes that assisted living may be the next best thing. "I have my friend who is my family," he says, with a catch in his voice, "And I have my neighbors here who are my family. It's a good way for an old man to live."

Industry experts are looking at models that will attract more happy customers like Poluzzi in the years to come. Paul Klaassen, chairman of Sunrise Assisted Living in McLean, Virginia, believes the senior-care industry can learn some good lessons from the health care delivery system, for example. "Women giving birth used to be shuffled through the hospital from a prep room, to a labor room, delivery room, and recovery room," explains Klaassen. "This was a model developed for the convenience of the hospital; not the patient." The catalyst for change that resulted in the all-encompassing birthing-suite model came from women themselves - an external force that dramatically altered the hospital-designed birthing process. Klaassen believes the same will hold true in the senior industry. He also feels that any changes to the landscape of senior living will come as a result of consumer demand. "Once people have tasted how good things can be, they are never going to settle for anything less."

In 1999 there were 46,131 properties offering "supportive" housing for seniors, according to the NIC. These "supportive services" consist of some combination of hospitality services, such as communal meals, housekeeping, transportation or activities, personal care, and health care. (See chart, p. 62.) According to the NIC, the senior-housing market will more than triple, growing from an estimated $126 billion in 2005, to $490 billion by 2030. The largest area of growth between 1991 and 1999 was in the assisted living sector. The number of properties providing assisted living services has increased by 49.4 percent and the number of beds available for assisted living has increased by 114.8 percent. (The NIC expects this trend to continue, with an expected 150 percent increase in the number of assisted living units by 2030.) In contrast, the number of properties offering skilled nursing services - the traditional nursing home environment - has grown by only 22.2 percent; and the number of beds increased by only 10.4 percent. Today, by most conservative estimates, there is "zero growth" in the nursing home industry, says Kramer. And we can expect the expansion in the assisted living sector to continue.

Preparing for the next wave of seniors is key to the future success of Summerville Senior Living of Alexandria, Virginia. Summerville takes a community campus approach to senior living, with a mix of private apartments, assisted living quarters, and special dwellings for seniors with memory-impairments and other cognitive disabilities. According to Michael Clendenin, Summerville's director of communications, much of the corporate marketing strategy focuses on the adult children representing these needful parents. According to Clendenin, these adult children are Summerville's customers - now, and in the future.

But today, one of the most difficult aspects of marketing senior housing for Summerville and other similar facilities, is overcoming perceptions of "institutional warehousing" of the elderly. "Many adult children endure a great deal of stress convincing their parents that assisted living is in their best interest" and is not the depressing environment of the old-age home, explains Clendenin. Accompanying that mind-set, is a real misunderstanding of the terminology used to describe various senior living options. In their "National Housing Survey of Adults Age 60+: Opinions, Attitudes, Perceptions, and Behaviors," the NIC found that most consumers did not understand or identify with any of the terms used to describe supportive services communities. According to the NIC, individual product promotions and marketing efforts are needed to take on the job of educating senior consumers. But what may be more appropriate would be an industry-wide effort among all providers of housing alternatives for seniors. "If the industry is going to prepare for the next 10 or 20 years, it's clear there needs to be some type of national consumer education campaign," says Kramer. "No one truly understands, because the terminology is mind-boggling."

Clendenin believes that as a result of their own experiences of wading through the terminology and then trying to make appropriate decisions on behalf of their own parents, many Boomers will spare their children - the Gen Xers and Gen Ys - the level of stress they endured. One possible scenario is that Boomers may move into senior communities under their own steam, at a younger, more active age, minus the infirmities of long-term chronic illness. But even though more clients means more revenue, Clendenin is quick to point out the possible downside of this scenario. As residents move in earlier, and live longer, healthier lives, there will be increased pressures to meet ever-growing expectations. Meaning: more services, more amenities, and even more choices. Meanwhile, as assisted living becomes the norm in senior care - over the short-term at least - the pressures to provide a model for lower-income seniors will also be greater. Currently, more than 40 percent of residents in assisted living facilities (at a relative cost of about $25,000 to $35,000 a year) may supplement their incomes by liquidating part of their assets, or receiving financial assistance from family members or third parties. "We will have to find a way to do that [provide for lower-income seniors] and still be profitable," says Clendenin. "Pressures from the government and from the general public to maintain a high level of quality and to deliver what we promise, will increase, and more intense regulation may result."

No one really knows what the elder- care model may look like in 10 years - let alone 30 years. However, SCAN (Senior Care Action Network), a California-based social HMO - one of only four in the U.S. - is working under the assumption that the key to the Boomer heart, and the key to today's seniors who do not require specialized care, is to provide services that keep these individuals active and in their own homes for as long as possible. "It's all about independent living power," says Sam Ervin, SCAN president and founder.

According to a recent report from the Joint Center for Housing Studies of Harvard University, today's middle-aged Boomers are largely unaware and unconcerned about their future supportive housing needs. Because supportive housing is not high on their agenda, it is not on the agenda of new homebuilders. Three-quarters of the nation's seniors currently live in what can be termed "conventional housing," which is not geared to the possibility of future disabilities. According to the report, there are currently no indicators suggesting this trend will change in the short-term.

Staying in the home long-term requires massive coordination among care givers and community-based services, something that neither the senior care industry, nor the medical community is yet prepared to deal with. "Ultimately it will have to be some kind of integrated solution," says Ervin, who adds that the market for care providers will grow exponentially between now and 2020. "The lack of preparation is going to make it tougher, and the political interaction around these issues doesn't help us deal rationally with a lot of these decisions," says Ervin.

According to SCAN's "21st Century Eldercare Trends" report released earlier this year, technologies are going to be playing an increasingly important role for the senior population. "Cyber-seniors," - the Baby Boomers of the future - will be able to stay in their homes longer because of the "elder-friendly" technologies - everything from personal digital assistants that can scan for impending health problems, to plain-vanilla personal computers that help reduce isolation among the senior community, explains Ervin. But there are "choices" that society must deal with. "We don't know where the balance point is yet. The Boomer is going to want everything, but along with that comes more responsibility through appropriate participation in the costs of care," says Ervin.

While some members of the senior industry are concentrating their efforts on the brick-and-mortar, bottom line scenario, others are trying to determine how quality of life issues can be improved. It's these intangibles, says geriatrician Dr. Bill Thomas, that lead to a more rewarding life whether a senior remains in the home setting or in a long-term care facility. Thomas is the founder of the Eden Alternative, a grassroots organization that promotes the idea that long-term care facilities, such as nursing homes, should be gearing their efforts "to life" not "to death." That's why the 220 nursing homes that have embraced the Eden philosophy over the last eight years, are havens of green, filled with gardens, pets, and music.

Thomas, whose radical approach to long-term care seems light-years ahead of some senior settings, is re-engineering the Eden Alternative to meet the needs of a new generation. He is currently developing The Green House Project, small community homes, capable of housing between six and eight people, where those requiring skilled nursing services can live and receive the care they need. These houses, which will blend into communities where they are built, will be linked with a health care delivery network of doctors, nurses, and other medical staff, as well as back-end accounting and billing support.

"There's not a Boomer among us who is going to want to live in an edifice, a separate community that reeks of old people's home, no matter how nice it looks on the outside," says Thomas. He has started a pilot project in Utica, New York, with 42 elderly and disabled individuals who will leave their skilled nursing facility and move into seven Green Houses to be built over the next two years. Thomas is confident that the concept will be embraced, and that it will continue to meet current and future skilled-nursing governmental guidelines. "People do not want to be defined by their medical diagnoses or by their age," he says. "They want to be defined by their passions and they want a life that is part of the community, not separate from the community."

Being part of a community and defined by our passions may indeed become the rallying cry in the design of future senior living accommodations. But that intangible is only part of the picture. Thomas believes that during the next decade the industry will undergo "a shocking, wild, wooly period of experimentation." And the biggest battles will be between consumer advocates and large provider organizations, regulators, and those who work in the field. But with luck, models will emerge that will meet the needs of all of these constituent groups, as well as future seniors. "What we need to remember," says Thomas, "is that very soon, those seniors that we talk about in the abstract will be us."

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