Life plan retirement communities, also referred to as continuing care retirement communities or CCRCs, are a great option for many older adults who are seeking a low-maintenance lifestyle, social engagement, and a focus on other dimensions of wellness, and who find peace of mind knowing that the type of care services they may need in the future are available where they live. Various surveys over the years have revealed that a large majority of residents in life plan communities are happy with their decision and are living a healthier lifestyle than they likely otherwise would be. Yet, as with any type of business or service, some life plan communities do a better job than others.
In no particular order, here are the top six things a life plan community should not do:
Keep residents in the dark
I don’t mean this literally (although the lack of a good generator could lead to this result in some circumstances, so that’s definitely worth asking about!). What I am really referring to here is a lack of transparency and communication with residents.
I’ve written about this before, but in my opinion, if there is any topic of discussion about which management feels residents should not be informed, then I question whether it should be a topic of discussion to begin with. If is not good for the residents, then it’s probably not good for the organization.
The importance of open and consistent communication with residents has never been clearer than during the time of COVID-19. I’ve heard some residents compliment management at their community for the excellent communication they’ve maintained throughout, saying how much they appreciate it. Unfortunately, residents of other communities I’ve heard from have not experienced the same.
Put management or ownership priorities ahead of resident priorities
The well-being of residents should always be the top priority of management at any life plan community. With every decision, it should be asked if it is good for the residents. I realize things are not always black and white, but this should be the general attitude towards decision-making.
This most certainly includes the safety and security of residents, as well as health and lifestyle considerations, but it also includes financial well-being. If management and/or ownership puts their own financial gain ahead of what is best for residents, or makes poor financial decisions, it can ultimately have an effect on the organization’s ability to meet its long-term obligations (explicit or implicit) to residents.
Fail to maintain proper reserves
Residents of a life plan community are placing a great deal of trust and confidence in the organization to provide certain benefits, today and in the future. These benefits include an array of hospitality-type services, combined with access to a range of care services, if needed. Other benefits may include a deep discount on the cost of those care services and/or a refund of some portion of the previously paid entry fee.
On these last two points, it is important that the life plan community is properly pricing their fees and maintaining an adequate level of reserves for future obligations. In other words, future obligations should be funded to ensure that promises can be kept, especially in the event of a major unforeseen business disruption.
Lack an educated sales staff
The primary contact between a would-be resident and the community will almost always be a member of the sales team. Sales staff at a life plan community generally prefer to think of themselves more as counselors or consultants rather than salespeople. They hope to learn about the client’s needs and what’s most important, and then determine whether their community is the best fit. But this also requires that they have an in-depth understanding of their product, their competitors, and their industry as a whole.
The best salespeople in any industry are students of their profession. This is even more important for the sales staff at life plan communities. After all, residents are making a decision that affects the rest of their life; it’s a healthcare, financial, lifestyle, and housing decision all wrapped up in one. Therefore, it could be said that it’s almost negligent to have a sales staff that doesn’t truly understand the many nuances among senior living options, particularly as it relates to CCRC contracts, pricing models, etc.
Exclude residents from the board of directors
This has been a topic of increased attention over the past few years. There are some within the industry who suggest that having residents on the board of directors at a life plan community creates a conflict of interest, or that the board somehow loses its fiduciary independence. Yet, I believe it could be far more detrimental to the organization to exclude residents from board participation. After all, no one cares more about the long-term success of the organization than the residents.
Few things could be more harmful to the overall “health” of a life plan community than residents who feel they are excluded from having a meaningful voice about decisions affecting the community to which they have made a significant commitment. Could there be times when the residents are not in favor of certain proposals that management or other board members have brought to the table? Certainly. But this shouldn’t be a reason not to have residents on the board at all. In fact, it probably means that it’s time for the other board members to listen more carefully.
Many CCRC residents have successfully owned, operated, or played a leadership role in organizations far bigger than the one in which they now reside. The most successful life plan communities of the future will embrace the knowledge, input, and expertise of their residents, even if it means occasional disagreements.
Over promise and under deliver
No business should ever over promise and under deliver, but this is especially true for life plan communities. Older adults who have placed such a high level of trust and confidence in the organization should never find out after they move in that what they are receiving is less than what was promised or implied. How discouraging and disheartening this would be.
The goal for every life plan community should be to hear new residents say, “It’s even better than I ever imagined!” If they’re still saying that a couple of years after moving in, then the community is really excelling in this area. When something doesn’t go right or a resident has a problem, it should be a top priority for management and staff to address it immediately and constructively, and never in a condescending or patronizing way. This comes from the top down. Life plan communities, like any business, should take pride in delivering exceptional customer service. And make no mistake: The resident IS the customer.
No better time than now
Over the next 40 years, the 65+ age group will grow by nearly 70 percent. Over that same period of time, the number of people ages 85 and greater is projected to nearly triple from 6.7 million in 2020 to 19.0 million. But the growth of the older adult population in the U.S. is only half of the story.
It is projected that by the year 2034, for the first time ever, there will be more people age 65 and greater in the U.S. than children 18 year of age or less. Simply put, there will be fewer adult children to help care for aging adults in the coming years. To compound the effects of this, there are more solo-agers (a.k.a.. “elder orphans”) in the U.S. than ever before due to a doubling of divorce rates over the past 40 years and because the number of people who never married is at an all-time high. Therefore, not only will many senior adults not have adult children to help care for them as needed, they will not have a spouse to help either.
While recognizing that affordability of options also will be increasingly important, these trends translate into a huge opportunity for life plan communities to help older adults plan a more secure future, while providing overall lifestyle and wellness benefits today.
But for life plan providers that fail to recognize the importance of avoiding the six issues described in this post, the opportunity could well pass them by.
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