Data tells us prices are going up but does this mean our product is getting better?

By Steve Moran

I recently read an article at Real Clear Politics that was based on an interview of casino magnate Steve Wynn in which he made this statement

“We’ve been health care providers for over 45 years,” the founder of Wynn Resorts said on the FOX News Channel. “And when your prices go up and your product doesn’t get any better you sort of wonder whether you got a new deal or not.”

It was the statement “when your prices go up and your product doesn’t get any better“ that really caught my attention. This is actually a very good question. The data tells us prices are going up but does this mean our product is getting better?

Here is what is true:

  • Rents continue to go up

  • Buildings are getting bigger and more amenity rich

  • Development costs are going up

  • Unit sizes are going up

  • Occupancy rates are not going up

  • Labor rates are on the verge of increasing at an accelerated rate

  • Market penetration has not gotten better

  • The average age of residents has gone up

  • The average length of stay has gone down

  • Mostly people choose senior living because they have to not because they want to

What Does Better Mean?

Exactly what better means is actually quite complicated. Even if residents and family members say they are 110% satisfied it does not mean what is being done is the very best that can be done. It was not all that long ago that we thought having a flip phone was the coolest possible thing to own. We had no idea there could be a piece of technology hardware that could be so much better that we would consider a flip phone to be something only good for a museum or a doorstop.  

It is further complicated by the reality that living a good life as an elder can mean very different things for different people. Since most senior living communities have a great deal of sameness it is almost impossible to know what other possibilities might be out there.

In my view better means the following:

  • Elders look forward to moving into that chapter in their life when they move into a senior living community

  • Elders who live in senior living communities find new or renewed purpose for living

  • Lengths of stay increase

  • The average age of entrance and the average age of residents in senior living communities decrease

Perhaps the other thing I would include is that there would be more options in terms of affordability and lifestyle.

Finally, none of these really address the progression of Alzheimer care, which perhaps should be another story on it’s own.

So what do you think? Is the product getting better and why?