One of the most significant developments in the last year regarding senior housing has been the look towards a middle, more affordable option. The national average cost for assisted living is still in the $4000 a month range, a price tag out of the reach for many seniors. Besides not wanting to go to a group setting, the sheer cost burden is insurmountable. As many senior living communities and investors face 88% occupancy rates and failing profits, they finally had a light bulb go off that they have over customized to attract those who can afford rates as high as 10,000 a month!
So now there is a move towards more differentiation and simplification of communities. Premium will always be just that, with multiple chefs, pools and extensive gyms and classes for everything you could think of. Even the attempt to do affordable garden style apartments has fallen short regarding poor accessibility. The good news is that they will start building apartments that are more well designed for aging – period. But my concern is that many corners will be cut – health and safety still has to be tantamount. Staff ratios would be much smaller, which is a real concern. Hopefully everyone will not just be on monitoring tech.
The investment push is to develop affordable assisted living in the range of 1000 to 1200 a month. Sound too good to be true? To make it work the facilities must have a good partnership with a strong local health care system. That does not exist everywhere, especially in rural areas. They are also betting on the new Medicare Advantage plans to pay for wrap around services and wellness initiatives to other services that usually would be included as part of a higher end assisted living community. I guess it is Silver Sneakers paid by Medicare and off to the local gym with you as opposed to going down to the class in house. Medicare Advantage has yet to prove what it really will offer.
But the most immediate difference is in the proposed meal plans. Instead of a four course meal served on linen tablecloths with multiple food cafes and coffee and bar options in the high end – meet the 300 gram frozen meal -low in salt and sugar and high in protein. The cost would be about $3 a meal which is a far cry from luxury living.
So in summary, the investment gurus of seniors living have seen the light or the red ink and are looking to actually meet the needs of a larger portion of the senior population. The buzz words are practical and scalable. It would be a balancing act, with private facilities asking a lot of public money to balance out a safe environment. The potential customers are the 14.4 million middle income seniors to hit the market by 2029 (most boomers would be in their eighties). Maybe just maybe, it will be a real tsunami of its own to make public services generate better outcomes for everyone- even us stay at home folks.