If there was one disappointment I had with this NIC conference, it was this . . .
By Steve Moran
I came away from the NIC Spring Conference in Dallas thinking that Senior Living has a “Failure to Launch” problem.
You may remember the 2006 movie that starred Matthew McConaughey and Sarah Jessica Parker. McConaughey played a 35-year-old man who loved all the conveniences of living in his parent’s home and did not really want to grow up and become an adult. I find myself wondering if this is senior living today. Here is why . . .
Real Estate or A Business?
If you invest in multifamily housing, no matter what flavor, you know you are investing in real estate. Yes, there is some organization that is in charge of keeping the building full, but, in reality, it could be any old halfway decent management company.
If you invest in a hospital company, you know you are investing in a company that provides medical care. Yes, in a building that we call a hospital, but at the end of the day, what makes that business good or bad, is completely dependent on the operator rather than the real estate.
In truth, today investing in senior living, with the possible exception of senior apartments that provide no services, is way more like investing in a hospital than it is like investing in multifamily. The operator is the single most important variable. More important than, location or the beauty of the building or anything else.
And yet . . .
When I look at how most capital providers behave at NIC and in the industry as a whole, I mostly see them treating senior living as a real estate play. And, if I am honest, this is frequently true with operators as well.
NIC as the Catalyst
Continuing with the movie metaphor, NIC as an organization is a bit like Sarah Jessica Parker who is hired to strongly “encourage” McConaughey to launch. A big theme for the NIC conference was collaboration and partnerships. The big idea is that senior living has the ability and the opportunity to radically transform the whole healthcare ecosystem.
Assisted living and skilled nursing is where a significant majority of those seniors who consume a high proportion of healthcare dollars live. As we begin to see ourselves as serious players in the ecosystem, we will be able to better justify the economic value of what we do.
More than any other organization, NIC is the catalyst for making this happen. It takes fresh thinking on the part of both capital providers and operators to get there.
But . . .
Over time, this will be the difference between high occupancy and high profit and low occupancy and low profit (or no profit). Over time I also expect to see more of a kind of bifurcation with a medical model and lifestyle or social model though part of the evolution will be that we will often see both models on the same campus. This will be the subject of a longer article.
NIC Practices What They Preach
This idea of partnership and collaboration extends to NIC as an organization. They announced two significant partnerships. The first is with Eldermark, a senior living EHR company. They have created a module that allows them to effortlessly send real rent data to NIC (only with the approval of the owners), which creates better data for capital providers and ultimately benefits residents and the whole industry.
The second partnership they announced was with PointRight, a company that is focused on providing high quality, reliable, predictive analytics in the post-acute world. They will be integrating very specific data on lengths of stay and rehospitalization into the NIC map system. This data is massively better than the CMS 5-star rating system, that is all but worthless when it comes to predicting rehospitalization prevention success.
This is a hugely exciting time in our industry and it is full of opportunities. If there was one disappointment I had with this NIC conference, it was the relatively small number of capital providers and senior living operators that attended the sessions focused on becoming a player in the healthcare system.
And yet . . . it is really cool that NIC is pushing us in this direction.