New Seniors Living Model Shows Promise

The earnings potential for economies of scale have long determined that seniors living facilities be designed and operated more like traditional nursing homes, but a new argument for …

The earnings potential for economies of scale have long determined that seniors living facilities be designed and operated more like traditional nursing homes, but a new argument for “like home” facilities is gaining ground under the theory that customers will be willing to pay more for better design that delivers ease of use and a more family-friendly environment. Developers are now buying into the idea and more of these facilities are making their way into the market. The new model looks more like an actual home and primary care is put into the hands of more professional staff that also manage the facility, which results in more personalized care. For more on this continue reading the following article from National Real Estate Developer.

The “smaller is better” concept is difficult to achieve in seniors housing development and operations, as savings gained from economies of scale are difficult for investors to ignore. However, as innovators such as the late Steve Jobs proved, consumers will pay more for a product that combines good design, better quality of life and ease of use.

The marriage of these ideals has launched another wave of niche development for seniors housing: The “like home” model, where nursing homes or assisted living facilities are designed to look like the insides of houses and seniors can live in a family setting, rather than one that’s akin to a hospital. With tweaks to staffing levels and the support of Medicaid supplements, these properties can not only attract more customers, they can be run less expensively and more safely than traditional nursing homes or assisted-living facilities owners say.

The Arlington, Va.-based Green House Project is one of the examples of this model. Director David Farrell, a former nursing home administrator and author of books on long-term care, says the like-home concept was born from observing the efficient but bland institutional model in many long-term care facilities. “I remember struggling to provide optimal care in those properties, which are driven by tight schedules and staffing [hierarchies] that places the person directly caring for the senior as the low person on the totem pole,” he says.

Green House properties, which typically have at least 50 percent of residents using Medicaid, shun the hospital approach. The properties are essentially large homes, with each senior getting their own room and bathroom, about 10-to-12 individual rooms total per building—though the facilities can be clustered together. The rest of the building includes typical home amenities, including a kitchen, a dining table, a living room setting with easy chairs, a den with a television and computers for personal use.

The largest difference is the staffing—Green House properties cut out most of the management and support staff, and the certified nursing assistants (CNAs) run the show. Each facility has about two or three CNAs (called “Shahbaz” in the Green House model), depending on the time of day, and one nurse. The nursing assistants, who have gone through more than 128 hours of additional training following their CNA school, are mainly in charge at the properties, Farrell says. 

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“They not only provide care but they do light housekeeping, cook all the meals and help take care of all of a senior’s needs,” he says. “Forty of their training hours are just in chef training, giving them the ability to make great meals for the seniors that ultimately help reduce weight loss and lack of appetite seen at many seniors facilities.”

The Green House is supported by the non-profit NCB Capital Impact and has received funding from the Robert Wood Johnson Foundation, with claims that the housing model typically has operational costs of 60 percent that of a typical nursing home. The model has grown to 22 states since it started 13 years ago, with 146 properties built and 150 in the pipeline, and negotiations are ongoing with officials in eight more states, Farrell says. “In each state we have to work with the local department of health services to show them how we meet all federal regulations,” he says. “That can take a little time, but we’ve always been successful.”

One success story has been the two Porter Hills Green House Homes in Grand Rapids, Mich., two properties next to each other that opened in 2008 by nursing home and seniors housing developer and operator Porter Hills Retirement Communities and Services.

Ingrid Weaver, senior vice president of operations for Porter Hills, says the company decided almost 10 years ago to start looking at two new models of care, the Program of All-inclusive Care for the Elderly (PACE) and Green House. Seniors served by PACE, for the most part, still live in their homes, and the program consists of services brought to them. The company also sought donors from the Grand Rapids area, renowned for its fund-raising abilities, and built the two-building, $5 million Green House complex, each facility featuring 10 private rooms.

A U.S. News & World Report study gave the facility a five-star rating. Weaver says what makes the facility popular is the fact that the typical seniors amenities are there, but hidden. There is no nursing station, no medical contraptions, no dining hall and no bingo-style specified activities. Seniors treat the building as a shared home. Residents can come out in their robes and request a personal meal for breakfast, or have family over for a game night. A few residents spend time in the private garden area, or they might Skype with friends and relatives.

She says the new CNA responsibilities took some getting used to. “We did have some transition after we opened,” Weaver says. “But many of them love the new responsibilities, they’re empowered, they handle decisions by thinking for themselves rather than a lot of questions to leadership. They’re usually people from big families themselves who are comfortable in that environment.”

The complex typically has about less than half of its residents on Medicaid, and with a full waiting list, the personal services allow the company to charge “a little bit” higher for the Green House care, Weaver says. However, because of the small staffing, the operational costs are actually cheaper. “In our legacy nursing home building, our health center cost per day is about $206.81, while at our Green House homes it’s about $189.60, with a savings of more than $124,000 per year,” Weaver says.

Her firm would like to do another Green House property, but they want to wait a little longer than five years to see how the model works out over time, she says. “I do believe there’s an enhanced quality of life for the seniors at these properties,” Weaver says. “It’s just a meaningful engagement, a different way of looking at long-term care.”

This article was republished with permission from National Real Estate Investor.


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