Last week I published an article titled “The Perpetual Problem . . .” in which I wrote about how The Stratford assisted living community in Phoenix developed a very creative program that allowed residents who were experiencing increased confusion to stay in their mainstream assisted living for extra weeks or months, before needing to be moved to a higher level of care. After publishing the article I posted the article in a number of LinkedIn groups and sent out an email with the following headline: “Are you looking for a way to hold on to your residents for a few more months as their cognitive abilities fade?” In quickly became one of the top read articles and received many positive comments. However, there were several people who took offense to the article because they felt the focus was primarily on how extract the highest profits from a vulnerable senior population. I thought it would be interesting this week, to spend a little time on the seeming competing goals of looking out for the best interests of seniors and making a profit. As a preamble I want to say, that I really appreciate all of the comments. While kudos are always the most fun, in some respects those who offer a disagreement create a level of richness in the discussion that would not otherwise be there. So I thank all of you who have commented and encourage you to keep it up.
Profiting From the Senior Marketplace
I have a very strong belief that the ability to make a profit is the one thing that ensures a high quality of care.
Here is why:
1. Senior housing/senior services are offered in a competitive marketplace
If the services are inadequate or the price is too high, seniors and their families can and will choose alternative solutions to meet their needs. This means that smart, caring operators will always be assessing what they are offering relative to the needs and desires of seniors, improving, tweaking and re-pricing to be as competitive as possible.
2. The opportunity to profit spurs innovation
We are seeing a proliferation of memory care communities, partly because of an increased awareness, but mostly because it represents an opportunity for the developers and operators to make a profit. Right now, because at Vigil we have the most sophisticated dementia focused call system I am spending a lot of time talking with some emerging memory care companies and it is really exciting to talk with them about what they have learned and how they are taking that knowledge to create the next generation of memory care communities.
3. The lack of profits drives out poor operators
If a community is not doing a good job of serving the needs of their residents, they will not be successful. Ultimately you will see those communities close their doors or they will be taken over by companies that are more committed to high quality resident care. Perhaps the skilled nursing marketplace is provides the most striking example as to how the profit motivation improves quality of care. Consistently the highest quality of cares takes place in communities that have the highest percentage of private pay and high paying Medicare residents.
Essentially always when you hear stories of terrible abusive skilled nursing communities it is those where almost all of the residents are receiving Medicaid. They receive just enough money to provide the bare minimum levels of care and because their profits are minimal they often times do not have the financial reserves to weather census fluctuations, payment delays, or just those unexpected periodic large expenditures, like roof replacements. Perhaps one of the wisest things I ever heard with respect to senior housing was this: “No margin, no mission!” Steve Moran
Don’t miss a single issue of Senior Housing Forum, subscribe today.It is free! We do not sell or share your contact information. The posts are practical and never too long. Go to the main page of Senior Housing Forum and on the right hand side you will see a place to enter your email to subscribe. You will receive notification when a new article is posted. You can unsubscribe at any time.
Finally: If you know anyone who is looking at emergency call systems I would appreciate the opportunity to talk with them about Vigil Health Solutions.