By Jack Cumming

My experience is that most senior living operators have no idea that there is a national association of residents. It’s the National Continuing Care Residents Association (NaCCRA), and at one time, it met annually with the fall LeadingAge Annual Meeting. Although I’m not a NaCCRA board member, I am the research director. At last year’s conference, I was the only NaCCRA attendee.

Remember NaCCRA?

NaCCRA now is but a shadow of its former presence, but it does publish a newsletter occasionally. Even that appears less frequently than it did. The most recent issue, though, features an intriguing reflection by Dan Seeger, NaCCRA’s current president. Seeger is a resident now at Pennswood Village, and earlier, he lived at Medford Leas.

The essence of Seeger’s musing is captured in what could be an elevator speech: “A not-for-profit CCRC,” he writes, “is, in essence, a mutual compact among residents to pool both the risks and costs of aging, hiring management to carry out the requisite duties to make it work. It is the funds provided by the resident investors that make the very existence of the organization possible.” He concludes that “residents should have some influence in the governance of the enterprise.”

Most providers would likely counter that residents not only “have some influence” but that they are a major force since everything is done “for” them. Still, we know that decision-making is seldom “with” residents as the major deciding force. Even life enrichment directors, who have no reason not to let residents run things, generally talk only of employees as part of their team, while residents — select residents — may be a “committee.” I don’t think I’ve ever heard a staff manager refer to residents as part of the manager’s team.

Resident Investors?

When NaCCRA’s Seeger writes of “resident investors,” he is undoubtedly thinking of entrance fee investments which, unknown to most residents, are often used to secure the debt providers against loss. You might think this would be tantamount to a publicly marketed security, but it’s not regulated as such by either the state or federal government.

“Resident investors,” to use Seeger’s term, are speculators without their knowledge. Imagine what the appearance is to those who find out if such an “investor” after the amortization period is required to leave either because the aging resident is now found to be “disruptive” or because of a need for services beyond the facility’s licensure. Can it be said that such a resident is better off for having trusted the provider than they would have been staying put?

Defending the Powerful

Here’s where legalities come into play. It’s not uncommon in American law for contracts of adhesion (generally unalterable by the consumer) to result in injustices favoring corporate interests. After all, corporations have more wherewithal to pay for self-aggrandizing counsel than do most consumers. Judges tend to interpret contracts literally without looking to the equity of the parties’ expectations at the time of contract acceptance.

Dan Seeger is on to something. More and more aging Americans are forming grassroots operations. There is a growing number of “villages” in which volunteers provide services to members, sometimes with volunteers being members in a collaboration of mutual support. Beyond that, though, cohousing is becoming more popular. Cohousing is very much like the mutual benefit association which Seeger imputes as an ethical, equitable overlay to today’s CCRC not-for-profit legal construct.

Why Not Cooperatives?

A CCRC may call itself “not-for-profit,” but that can’t be true, or financial failures would be more common, or there would be more cooperative living mutual societies. Google tells us, “Cooperatives are autonomous associations of people who come together voluntarily to meet common economic, social, and cultural needs. They are generally owned and operated by members who pool their resources for the benefit of all members.”

The senior living industry might gain credibility and appear more trustworthy if it provided operating, financing, sponsorship, and other services to cooperatives, instead of insisting on top-down control and decision authority. NaCCRA’s Seeger is onto something important.

Federal Regulation?

The same NaCCRA newsletter issue includes a letter to the Senate Special Committee on Aging, signed by President Seeger, calling for federal regulation of CCRCs. A critical sentence in his letter shows the extent to which many members of the public think that CCRCs specifically, and senior living generally, focus more on corporate defense than on resident protection. He writes, “A new federal statute could disallow clauses in resident contracts which make the contract nonrestrictive for the provider but disempowering for the resident.”

Trust is a fragile thread, and it’s evident that some common industry legal practices have left that thread badly frayed. While there’s no evidence that these views were adopted widely by NaCCRA’s membership, they reflect practices that are increasingly evident and have the potential to impact the market for senior living as it now exists.

Best to Listen  

Even though NaCCRA is no longer the organization it once was, the path of wisdom would be to take seriously the insights embedded within Seeger’s views. To paraphrase a point of geopolitical wisdom, “If people like what you offer, you can economize on defense.” It’s best to focus on opportunities rather than threats and to treat your residents as friends rather than as potential problems.