November 27, 2007

Subject: Notes on the Retirement Community Industry

By: Sharon Cooper

The retirement community industry combines real estate, healthcare, and hospitality interests. To a degree, a retirement community can be compared to a stationary cruise ship. For the most part, the occupants are confined to their staterooms, dining rooms, and activity areas, but there are frequent ports-of-call. It is a service industry, and the differentiator between successful communities and mediocre ones will always be the service factor.

Assisted living accommodation is based on a social, as opposed to a medical model. That means individuals are treated with dignity and respect, they are provided choices, and their independence, and privacy are protected and promoted. The medical model, upon which nursing homes are based, sacrifices each of those principles in the interest of efficiency in the process of medical treatment.

The assisted living population, whether integrated or separate from the independent living group, are decidedly distinct from a nursing home environment, and the operational model needs to include the distinction.

The wildcard in a retirement community's success is whether or not residents with Alzheimer's and dementia diagnosis will be accommodated and to what degree.

The Decision to Move

People move from their homes to a retirement community for 3 main reasons:

Isolation: Their spouse has died; their children, friends, and neighbors are unavailable for whatever reason, they can't or don't want to drive anymore, and they are lonely.

Physical and/or mental limitations: They can't manage the stairs to the bedroom, can't tie their shoes, forget to take medication, fall frequently, have had a stroke, or broken a hip.

Fear of the above: Everybody is afraid that they won't be able to live in their own home, but only some people act pro-actively on that fear.

These facts will influence both marketing and retention efforts. Financially, once an individual has to hire providers for lawn upkeep, home repairs and maintenance, and any type of assistance with the activities of daily living, the cost comparison between staying in the home or moving to a community setting is a wash.

Challenges

Labor pool: A retirement community operates 24/7/365. At a minimum caregivers are needed round the clock, cooks and kitchen help for 3 meals a day, plus snacks, housekeepers and maintenance for 5, preferably 6 days a week. All positions are low-paying. But labor will come at a premium due to the island location. It will be essential that the majority of the labor pool lives in the neighborhood, since more often than not somebody won't show for their shift, or they'll quit without notice so a reservoir of on call staff is a must.

Food: Next to labor, food is the community's highest expense. It will also come at a premium due to the island location. More than labor, it is the successful community's single most important feature, the one area where corners cannot afford to be cut. Mealtime and food events are the most important activity in a community setting. In addition to being a nutritional necessity, food is the focus of social interaction and feeds all 5 senses emotionally, since they're all in decline physically. Additionally, every holiday, including Mother's Day, Father's Day, Grandparent's Day, St. Patrick's Day, Mardi Gras, Cinco de Mayo, Flag Day... is a food event.

Medical Expertise: In addition to mealtime, the retirement community population's biggest pre-occupation is with healthcare. They need to feel that medical expertise is accessible and available. They love being informed and hunger for expert opinions on theirs and other's ailments.

Opportunities: The impact of a retirement community on the local economy is enormous. Everybody benefits -- doctors, dentists, lawyers, physical and occupational therapists, carpenters, handymen, plumbers, electricians, hotels (families love to visit when Mom doesn't have to pump up the air mattress; Mom loves the kids to visit when she knows the grandkids won't be hogging the bathroom.)

Activities

People living in a retirement community love to do what everybody else likes to do. A common misconception is that crafts are a good activity for seniors. Most people aren't good at crafts, and seniors are like most people. Additionally, many seniors are losing their eyesight, losing flexibility in their hands, might have arthritis, and don't need any more potholders, all of which makes crafts a low interest item in a senior community.

The most successful activities are those that are brought in house - even the more independent seniors don't like to be far from a bathroom. A successful activities program has a big pool of volunteers of all ages and interests.

Popular activities for the retirement community population include shopping excursions, out to lunch, gambling, and short sightseeing excursions. Within the community they love card games, old movies, putt-putt golf, exercise classes (chair fitness, water therapy, Thai Chi, bend and stretch), educational and informational presentations, pet visits, live musical performance.

The assisted living population, depending on the level of acuity, appreciate short sightseeing excursions, and going out to lunch. In house activities include being read to, old movies, sing-alongs, live musical performances, one-on-one visits, pet visits, cooking, baking.

I'm not sure what the driver is in this project, but if it isn't real estate, it might be worthwhile to consider an interim step before a facility, and that is Home Health Care. This is also very very needed and can bridge the gap between leaving one's home and moving to a facility. It can also help develop your labor pool and relationships in the larger community.