Home Care Innovator Lifesprk to Acquire Senior Living Operator Tealwood

Lifesprk — the whole-person senior services company based in Minnesota — has added a new page to its innovative playbook.

On top of being a fully integrated provider of home health, hospice, primary care and other senior-focused services, Lifesprk is also now a bona fide senior living operator. It holds that distinction after announcing the planned acquisition of Tealwood Senior Living on Tuesday.

Founded in 2004, the site-agnostic, open-minded Lifesprk didn’t necessarily start out with plans to become a senior living management business. Yet it has “always been in housing” in some capacity, having served five buildings as the home care provider of record for the past 13 years, CEO Joel Theisen told Home Health Care News.

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“There’s a lot of segregation in [senior living],” Theisen said. “There’s a lot of opportunity. We felt like the same issues around the broken health care system were plaguing those populations, so we did make an active effort to start thinking about, ‘Man, we should really probably do the full property management.’”

As part of its acquisition of Tealwood, Lifesprk will now oversee 35 senior living communities located across Minnesota and Wisconsin, in addition to a handful of skilled nursing facilities (SNFs). Financial terms of the deal were not disclosed.

Moving forward, the Tealwood properties will fall under a new “Lifesprk Senior Living” brand. Dr. Bill Thomas — a highly regarded geriatrician, the founder of The Green House Project and Lifesprk’s chief independence officer — will serve as a key architect of the senior living expansion.

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Thomas has frequently talked about the need to reinvent the traditional senior living model over the past year. He even announced his own new pocket-neighborhood concept — Kallimos Communities — last week.

“I think you’re going to see the entry of home- and community-based services providers into senior living,” Thomas recently told HHCN. “It almost makes you laugh when you realize that we think of senior living as a different enterprise than home- and community-based services.”

Unlocking value

Always hunting for new opportunities, Lifesprk had the chance to get into a few communities and establish a rapport with Tealwood’s leadership team prior to the acquisition announcement, Theisen said.

Similar to Lifesprk, Tealwood has long been known as a senior living operator with a strong suite of services and holistic approach. That’s partly thanks to the leadership of Howie Groff, the president of Tealwood Senior Living.

“I got to know Howie and his deep commitment to the people he serves. The deep commitment to culture was really, really attractive,” Theisen said. “He’s been in this for a long time, watching the world. A lot of the things that we were doing, Howie just really understood.”

Groff will move into an advisory role following the Lifesprk deal. The transition comes more than two decades after he co-founded Tealwood with the owners of Shelter Corporation in 1999.

“With Joel wanting to somewhat jumpstart getting into this, into the senior housing area, he had a lot of the things already going,” Groff told HHCN. “It was like, ‘Wow. This could be an interesting marriage.’ And the more we talked, the more exciting we got.”

Together, Lifesprk and Tealwood will be able to better care for seniors on a longitudinal basis, they believe, regardless of whether those older adults are living in a private residence or a senior living community. Being able to offer a range of medical and non-medical services has become increasingly important in the age of COVID-19, especially as many communities continue to struggle with slow or stalled occupancy recovery.

The idea of blending a center- or facility-based approach with home- and community-based services for the benefit of residents is partly why Brookdale Senior Living (NYSE: BKD) made its $400 million deal with HCA Healthcare (NYSE: HCA).

“Our top priority is the health and well-being of our residents,” Brookdale President and CEO Cindy Baier said in February. “Part of this commitment is to offer many services in our communities, with a keen focus on resident and patient needs.”

Beyond the more pronounced losses over the past 13 or so months, there has been a 6.8% drop in senior housing occupancy over the past 10 years, according to data from the National Investment Center for Seniors Housing & Care (NIC) and the Minnesota State Demographer.

While Tealwood already had an in-house pharmacy, Lifesprk gives residents direct access to its core skilled nursing and rehab services, plus SNF-at-home and hospital-at-home programs. Lifesprk also adds a “life manager” component, where the company helps older adults in meeting their health and personal goals.

In theory, the only services residents can’t get within the Lifesprk-Tealwood partnership are emergency services and in-patient hospital care.

“Quite honestly, if you were sitting here a year and a half ago and [asked], ‘Is this what your pursuit would be?’ I would say, ‘Not really,’” Groff added. “But once Joel and I connected, … I started looking at, ‘Well, what are the pieces we have to provide? This is my term — that’s continuity of care. If somebody comes on our campuses, how can we take care of their every need?”

Lifesprk brings more to the table than its services alone, however.

In April, the company — formerly known as AgeWell — scored a $16.1 million investment led by Burlingame, California-based private equity firm Virgo Investment Group. Lifesprk has been using some of that funding to build and launch an “electronic life record,” a platform designed to be a more comprehensive EMR that also captures information around the social determinants of health.

“The opportunity to create and innovate is quite huge,” Virgo Managing Director Pooja Goel previously told HHCN. “Lifesprk was already innovating pre-COVID-19. … I think you’re going to see the way that patients, and particularly seniors, access care is going to dramatically change — and is already changing. [Lifesprk] is going to be on the forefront of it.”

As much as its care capabilities, that proprietary technology was appealing to Tealwoood, Groff said.

“What I’m particularly excited about, with what Joel and his team are working on, is looking at how we can work predictive medicine into this,” he said.

Lifesprk additionally brings Tealwood into the value-based care landscape.

In the Twin Cities area, Lifesprk has taken on global risk for nearly 6,000 clients associated with North Memorial Health and UCare. On an even larger scale, Lifesprk is one of just 53 direct-contracting entities approved to deliver services under the Global and Professional Direct Contracting Model from the Center for Medicare & Medicaid Innovation (CMMI).

“We think, with population health and being at global risk, we can use some of that money, I hope in the future, to actually help fund housing,” Theisen said. “That’s just part of the puzzle.”

On the rise

Lifesprk has been on the rise for a while, but its involvement in Tealwood arguably accelerates its ascent even further.

Most of its properties are located in the heart of Minnesota, but Tealwood additionally has at least six communities in neighboring Wisconsin. That geographic footprint could open up new markets for Lifesprk, which mostly operates in the Land of 10,000 Lakes, apart from a home care joint venture with Utah-based health system Intermountain Healthcare.

“As time goes on, you know, we may look to coordinate and also bring other services to those campuses, for sure,” Theisen said.

Overall, Tealwood has roughly 2,400 employees who help manage the health and well-being of nearly 3,000 lives. The operator isn’t in any active leases with real estate investment trusts (REITs), according to Groff. 

Tealwood has instead taken a build-it-together approach with its developer partners.

“In this case, there are two developers,” Groff said. “There’s one in Wisconsin. The name of the company is Tukka. And in Minnesota, it’s Trident Development. But we all developed these buildings from ground up — and we did a lot of friends-and-family financing.”

Tealwood owns part of the real estate interest, he added.

Lifesprk, too, will have an ownership stake moving forward.

“Even though we’re the property manager, we also are buying into some of the properties and ownership interest,” Theisen said. “So we actually have real estate interest as well.”

Integration plans for the 35 Tealwood properties to Lifesprk Senior Living are underway, according to Theisen and Groff. Lifesprk Senior Living is already working on plans for its next senior living contracts and properties.

Although Lifesprk will manage Tealwood properties and leverage its in-house services, residents will always maintain their right to pick their own provider, Theisen emphasized.

“People obviously always have a choice, and they will continue to have choice,” he said. “But we believe strongly that — with the value we’re creating and the experience we’re creating, and really that connection, the trust that’s built through the relationships within the community — that we’ll get the majority.”

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