Trends in Senior Living in 2020
Health Dimensions Group (HDG ) has released its list for 2020 entitled "Top Trends in Aging Services: Preparing for Historic Changes." As the silver tsunami of baby boomers continues to enter the senior living and care organizations markets, the general response has been uncertainty as to how to meet changing and varied senior needs while maintaining profitability. Owners and operators of senior living facilities must become responsive and make changes that are swift and diverse.
Actuaries used to define senior housing construction projections and schedules are based on population data that are five or more years out. These metrics attempt to address occupancy and growth challenges as senior living occupancy rates fluctuated between the 86 - 88 percent mark for 2019 according to new data from the National Investment Center for Seniors Housing & Care (NIC). The third quarter of 2019 set a record for the highest demand of net new senior housing units while the construction data indicates a slowdown is near. The population projections of 2015 are not in accord with the latest senior housing demand. More cost-effective construction options and the repurposing of existing real estate is becoming a necessity to offset occupancy pressures and saturated markets.
For lower-income seniors, alternative living care models, including the Program of All-Inclusive Care for the Elderly (PACE), integrate Medicare and Medicaid financing; provide a comprehensive service delivery system. This coordination of care is an effort to defer or avoid seniors moving into a long-term care fee-for-service facility. Implementing this program and other, less costly models of care can help to address lower-income senior housing issues. These models will continue to leverage technology to drive innovation and efficiencies, as well as address workforce shortages.
The most challenging market segment for senior living is that of middle-income seniors. Those seniors without sufficient resources for long-term care but who are also not in a position to qualify for Medicaid seem to face some of the most significant issues as it relates to housing and healthcare costs. According to McKnight’s Senior Living, investors and operators focus on the upper end of income distribution as their preferred targeted residents while leaving state and local programs to provide for low-income seniors. This scenario leaves a large portion of middle-income seniors whose living needs are not adequately being addressed.
Applied digital technologies are changing the senior living sector, and the race to seize substantial market share in the active adult and under-addressed middle-class needs has not gone unnoticed by tech behemoths like Apple and Amazon. Alexis Ohanian, the co-founder of Reddit, who runs a venture capital firm, is predicting that a significant change is imminent for senior living. New startups, heavy on innovation and technology, will bring major disruption to existing senior living models and facilities very soon.
Existing operators and investors of aging senior living facilities are increasing investment in a wide range of offerings and services to remain operationally sound and competitive. One service strategy is to partner with home health agencies that provide therapy under Medicare Part B while a senior resident ages in place. Another is to create more public spaces within facilities. The creation of roof-top restaurants and park spaces on the property can increase senior socialization alleviating depression, which is a contributing factor to downward health spirals for seniors. Smartwatch technology that acts as a smart key for residents as well as a movement and health monitor reduces the number of daily interactions with staff and provides a way for loved ones to monitor their spouse or parent remotely. Creating more job flexibility for staff and dramatically increasing wages for hourly positions is a necessity to recruit and retain competent staff in a tight labor force.
While many of the baby boomers are still below the average age of residents that live in traditional senior communities, demographics point to the fact that the senior living industry will soon be under more pressure than ever to provide for a diverse and increasingly particular population. Market sector opportunities in middle-income senior living will drive innovation as competition increases, and companies vie for market share. These opportunities to realize new solutions will positively affect the entire senior income spectrum for housing.
We help seniors come up with comprehensive plans to address the aging process and the challenges that come with it. Please contact our Glen Rock, NJ office at (201) 464-2040 to discuss your particular situation.