More than three out of every four Americans age 50 and older say they prefer to remain in their current community — and likely their individual homes — for as long as possible, according to AARP statics.
Combined with technologies that enable aging in place, that preference is positioned to “upend” the U.S. senior housing industry, The Wall Street Journal reports.
“People don’t want to go to a place where there’s only a bunch of other old people,” James Crispino, head of health and wellness at design firm Gensler, told WSJ.
Over the past five years, senior housing developers have spent billions of dollars developing innovative — and often glamorous — facilities targeting the country’s growing wave of aging baby boomers.
In 2018 alone, senior housing developers added more than 21,300 units, data from the National Investment Center for Seniors Housing & Care (NIC) shows.
At the same time, venture capitalists and other entities are expected to invest roughly $1 billion in aging-in-place tech by the end of 2019. Best Buy (NYSE: BBY), Amazon (NYSE: AMZN) and Walmart (NYSE: WMT) are likewise leading the charge on aging in place.
In September, Best Buy leaders touted in-home senior care as a large source of the electronics retailer’s future growth.
Specifically, the company — which purchased senior-focused device developer GreatCall in 2018 — hopes to provide 5 million older adults with health monitoring services within five years.
“In our view, Best Buy is assembling what could prove to be a formidable ecosystem focused on senior health, which it can use its nationwide footprint to scale over time,” Morgan Stanley analysts wrote in a recent report. “Looking ahead, we believe Best Buy’s deeper push into health monitoring, related efforts to reduce medical expenses for insurers, and right to share in the cost savings represent a significant revenue and profit opportunity in the long term.”
Despite the challenge from new in-home care players, technology-enabled companies and traditional home care agencies, the senior housing space is nevertheless expanding.
New senior housing construction is expected to hit 3.5% in 2023 of the total supply, compared to 2.5% in 2015, data from research firm Green Street Advisors shows.
“Senior housing isn’t about to go away,” WSJ noted in its Tuesday story. “It remains a compelling option for people with medical problems, loneliness and the need for assistance in eating, shopping and other daily activities.”
If in-home care and aging in place fail to completely upend senior housing, they may still change it.
Examples of senior housing providers that operate both properties and community-based in-home care divisions are becoming increasingly easier to find, reflective up home care’s popularity and profitability.
Lafayette, Indiana-based Homecare By Design is just one model that blurs the lines between senior housing and home care.
Lakewood at Home — a continuing care at home program launched by Richmond, Virginia-based LifeSpire of Virginia — is another hybrid model.
“The senior wins either way,” Homecare By Design founder and President Traci Goudy previously told Home Health Care News. “They can stay home for life, and we will layer in home health or hospice if needed, or help them move into the community they chose as part of their pathway.”
To some extent, large senior living operators like Brentwood, Tennessee-based Brookdale Senior Living (NYSE: BKD) are also living a concurrent existence in both the worlds of facility-based care and in-home care.
In addition to its 800 owned, leased and managed senior living properties that dot the U.S., Brookdale provides home health, hospice and outpatient services to more than 20,000 patients.
And while its home health business was down in the most recent quarter due to turnover within its sales team, Brookdale leadership expects a rebound in Q4 2019 and beyond.
CEO Cindy Baier briefly touched on Brookdale’s home health plans and 2020 outlook Wednesday during the Stephens Nashville Investment Conference.
Similar to all Medicare-certified home health providers, Brookdale will have to navigate the Patient-Driven Groupings Model (PDGM) as it simultaneously figures out what the future of senior housing will look like.
“When PDGM takes over, there’s no question that our revenue will be less,” Baier said.”The reason our revenue will be less is [that] instead of a 60-day episode, you have two 30-day episodes. So, not every patient is going to need a full two 30-day episodes to get to that 60 days.”