By Jack Cumming

Many industry leaders now see the CCRC industry, aka the life plan community industry, as health care. Talking not long ago with a 75-year-old board member for a multisite CCRC provider revealed 1) that he doesn’t live in a CCRC because he’s “not ready for that yet” and 2) that he welcomed board service as a way to add significance to his retirement years. That conversation gave me pause. I hope it causes you, too, to think.

Myopic Perception

This board member, who will be unnamed here, likely reflects the thinking of the management of the well-reputed CCRC operator on whose board he serves. His observation led me to question why the CCRC industry allows a narrow mindset to shrink its market. On a personal level, I thought that if someone had candidly convinced me of the readiness criterion when I moved in at age 70, my life would have unfolded very differently from how it has.

My up-close-and-personal view of CCRCs before then was of RiverMead in Peterborough, New Hampshire, where my wife’s parents moved in their mid-80s. Life in a CCRC struck me as carefree and stimulating. There was a lovely library where I would settle in with a good book when my presence wasn’t required with the family. The idea of multifamily living with meals included was enticing, to say the least.

Health Care or Better Living?

Far from my thinking then was the circumstance that there were care services onsite and that someday we might need them. It was the lifestyle that was appealing, and my wife’s parents seemed happy there. That experience led my wife and me to be open to moving to a CCRC when friends of ours showed interest in doing so.

We thought it would be fun to be together. We visited a number of CCRCs with them and many more on our own. They moved to Air Force Village West, but we were not eligible for that. We persisted, though, and moved to a CCRC where we still live today, 18 years later.

The board member with whom I conversed has chosen the alternative life. It’s one that we, too, might have chosen. He lives in a townhome that he owns. He is happy, and he has ownership, something which he would have to forfeit to live in one of the apartments of the CCRC enterprise of which he is a director. That doesn’t bother him since he’s still independent and doesn’t need care services … yet.

Incidentally, he is notable in his retirement for his active life in support of missionaries. His creative support involved his mastery of video production, vastly different from his career. His active “retirement” brought to mind the motto “non-ministrari sed ministrare,” which renders in English roughly as “it is more blessed to give than to receive.” He has given generously of himself. He can take pride in his achievements. He has significance.

The CCRC provider mindset includes the expectation that the preponderance of residents have reached a stage at which they are no longer productive. That’s the meaning implicit in the idea of waiting until a prospect is “ready for that.” For an accomplished person like the board member in question, that is an off-putting proposition. Why is that market limitation not evident to provider operators? Why is it allowed to persist? Why do providers think of themselves as health care?

Rethinking the Model

Today’s CCRC typically includes multifamily housing, on-site meal services, and on-site care services, but rarely physician-directed primary care. Individuals can recreate that same bundle for themselves without the entanglements of a CCRC contract. General market apartment living with a restaurant on-site and assisted living nearby does the trick. It’s seldom that one can’t just find assisted living or even skilled nursing on demand when it’s needed.

At one time, the CCRC bundle made sense. When Type A contracts were prevalent, a prudent, healthy person could have lifetime security, avoiding the financial catastrophe that end-of-life care needs can become. Some providers still offer such contracts, one of whom is the enterprise of which our acquaintance is a director. Still, evidently, he has sufficient wealth that he doesn’t need that assurance, and he has come to view a CCRC as akin to end-of-life care.

Why Not Follow the Market?

Assuming that this board member is typical, it seems that most not-for-profit CCRCs limit their market:

  • By starting from health care
  • By having age limitation
  • By having wealth requirements
  • By seeking tax exemption, thus precluding resident ownership

CCRCs exclude the poor since they don’t qualify. They exclude those looking for ownership. They exclude those who, like our actively aging director, don’t believe they need to pay for standby health care. One has to wonder, why haven’t general market multifamily apartment developers marketed to the elderly as an alternative to CCRCs?

More cogently, why do CCRC operators persist in limiting their businesses? Because of these self-imposed limitations, sales operations are more important than they might otherwise be. Occupancy, too, tends to lag comparable multifamily offerings. Typical multifamily vacancies are 6% to 7%, compared with 10% or more for CCRCs. This difference occurs despite the intense sales emphasis of many CCRC operators.

Opportunity is at hand. It will be intriguing to see who takes advantage of it. To close by thinking of our actively aging director, wouldn’t it be refreshing to help more seniors to find significance in their lives? Recall that he accepted a position on a large CCRC enterprise to have significance after “retirement.” Perhaps we can find a way to do that within the industry instead of leading people to avoid the industry as this director does.