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Future Healthcare Trends: What the experts are saying

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Future Healthcare Trends: What the experts are saying.

The Baby Boomer Generation, Technology and Coordinated Healthcare are the three critical elements shaping the future of Assisted Living, Independent Living, Continuing Care Communities and Skilled Nursing Facilities as reported by many of the experts in the Healthcare Industry.

As Baby Boomers approach retirement age, the senior living industry has to address the needs and demands of the Boomers who are active, tech-savvy and who are living longer.  Boomers will approach retirement in a whole new way.  Providers of healthcare facilities must keep up with the demands in order to stay in business and be competitive.  In the future expect to see more emphasis on amenities.  It will be easier for larger communities like CCRC’s to offer a wider variety of events and services.  Boomers want to be more physically and mentally active.  Senior living communities will offer more education opportunities, including online learning options.   There will be more recreational and fitness options promoting ‘whole person wellness” which observes the physical, emotional and spiritual aspect of the retiree.   Diversity is important to Boomers because they grew up during a radically different social and political environment than previous generations.  Retirement communities for distinct ethnic groups, which offer the benefits of a common language and culture will be an option offered to seniors.  Other communities will be designed to offer lifestyle choices.

The experts report that technology creates the greatest difference between the life of seniors of the past generations and the lives of Boomers and future generations.  Baby Boomers are particularly tech-savvy and will drive the senior living industry toward wireless connectivity.  “Smart homes” are built to accommodate wireless technology to help boost the independence and safety of older adults.  Seniors are able to be more independent and also are able to contact family and care givers when needed.

Collaboration and Integration in the Healthcare Industry are aspects which are changing and shaping the future as Providers seek additional strength to cut costs and improve the quality of care for residents.  As reported by Dr. Thomas Lee at the October Nic conference there is a great need for collaboration and integration of organizations that work with seniors, including healthcare providers and housing groups. Vertical Integration between types of Senior Care effectively organizes senior care between senior community and hospital.  Evidence of this trend is notable today and will become a driving force in the future as the Healthcare industry gains more sophistication.

So the future looks bright for the Healthcare Industry.   Retirement takes on a completely new look as providers adjust and comply with the needs of the upcoming generations.  Existing providers recognize and respond to the change, and new investors to healthcare are emerging to bridge the gap between supply and demand.

Decisions Decisions! A Healthcare Providers Dilemma “Keep Up With The Jones” or Sell

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Shifts in Health care, the aging population and consumers’ expectations are key elements in forcing providers to evolve and keep up with the fast pace advancement in all areas of the Healthcare industry. Today, senior living is about wellness and engagement which provides programs that fit resident’s emotional, physical intellectual or vocational needs. So the provider is faced with keeping up or falling by the wayside. Keeping up, however, offers many options for a thoughtful healthcare provider to consider.

BIGGER IS BETTER: Operators of Assisted Living, Independent Living, Skilled Nursing, and CCRC who own one or two facilities are drastically and aggressively increasing their portfolios. Portfolio growth will not only help if one facility has a bad year, but it will also help to reduce cost. Mergers and acquisitions are the key growth strategy for the senior housing and care industry by using economies of scale.   High merger and acquisition activity is also being driven by new investors switching from other real estate markets to the senior housing. Some transitions and affiliations have been necessity-driven due to financial and operational challenges. However, recent activity has clearly been strategic in nature. Large and small providers are on the move. For example, the recent merger between Omega Healthcare Investors and AVIV REIT created a 10 Billion real estate trust (REIT)

SENIORS COME IN ALL SIZES AND SHAPES. At one end of the scale are the high end senior living communities offering bistros, Wi-Fi, well equipped fitness and wellness gyms, and all the luxuries that the affluent boomers demand as a necessity. But what about the seniors that can’t afford these expensive services and amenities? The Gap in care will ultimately push the senior housing industry to provide more affordable options. So another opportunity and choice is given to the healthcare provider to address the need of low to moderate income services for the middle class. Not “keeping up with the Jone’s” and merging with other providers to improve quality of care and lower costs may be the answer to keeping a provider from exiting the industry.

SO HANG IN THERE The future looks bright. As Senior and Housing mergers and acquisition reach phenomenal heights the average price paid per unit is hitting new highs as well. The average price per unit for assisted living has increased 30.5 % from $150,600 to $196,600, for independent living from $164,000 to $211,300 per unit, for skilled nursing from 73,300 to 78,400 per bed. Driving the increase in skilled nursing prices was the growing number of over $100,000 per bed skilled nursing facility acquisitions in the past two years, which has gone from just five in 2012 to 12 in 2013 and 11 so far in the first three quarters of 2014 data shows. The availability of equity and cheap debt, plus an influx of new buyers, has been driving prices up and cap rates down in a seniors housing bull market that is seeing more mergers and acquisitions than ever before.

OPTIONS AND CHIOICES are numerous for the Healthcare provider. We are all living longer and leading a healthier life style and as demand for healthcare communities far exceeds the supply, it behooves the healthcare provider to take a long look at the future before making definitive decisions to stay in the industry or to sell.

Rosy Future For Healthcare Industry Is Bringing Everyone Into The Act

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Senior Housing investors who are eager to fill the gap between supply and demand, expect to acquire more healthcare real estate as they look forward to growth through acquisition and development. Senior Living industry leaders see that the demand for senior housing is expected to grow as the population of older Americans is projected to double by 2050. That growth is sparking increased activity in the entire Healthcare market for Assisted living, independent living, Continuing care communities, Skilled Nursing facilities, and transitional post acute care facilities. The market for senior housing mergers and acquisitions continues to shatter records and expectations, making 2014 a landmark year for the Healthcare industry.

REITs, public and private equity firms and foreign investors are all competing for acquisition opportunities. According to statistics, more than 50%of the acquisitions are being completed by local and regional providers, 40% by publicly traded and national chains, and the rest by private equity and not-for-profit.  In 2013 non-traded REITs raised 20 billion in capital carving out their roles as significant players in senior housing figures. Non-traded REIT’s have raised approximately 11 billion year to date.   In 2014 the BIG THREE REIT’s have already acquired several billion dollar portfolio deals. Reported at the recent Chicago Nic Conference, the three REITs have been responsible for 7 billion of transactions year to date. A California based private equity firm is moving forward with plans to develop 750 million worth of new construction over the next three years for which it is enlisting foreign investors to help fund a portion of the pipeline.

The growing demand for Senior Housing includes seniors of varied financial capability. There is the demand for high end Assisted Living for the affluent, but there is also a growing need for low-to moderate income senior housing for those seniors with less financial resources. The gap in care offers the investor the opportunity to provide more affordable options not only for the 3.5 million seniors currently living below the poverty level, but also for the middle class Americans who are aging. Developers who formally sought inexpensive building sites, now are biting the head of the snake and building in highly regulated zoning areas like California and New York.

The future looks bright for the Healthcare Industry in the 21st century as we see increased investor interest in all types of Senior Housing. It is no longer viewed as an investment just in a singular property type, but as an accepted asset class in a “complex delivery of care”.

Tech-Savvy Seniors Demand Assisted Living Communities Keep Up With The Times

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Demand driven providers are finding that no longer does a computer lab satisfy the requirement of tech-savvy residents.  Technology progresses so rapidly that many in their 70s, 80s and 90s in their own homes are accustomed to the latest technology.  They expect the same environment when they choose an Independent Living, Assisted Living or CCRC.  The affluent and technologically experienced Baby boomer generation is expected to be even more demanding.

Computer labs and business centers in senior housing communities are less important to senior living prospects today than they were two years ago according to Ziller Senior Marketing agency.  The growing number of seniors using mobile devices and going online antiquates the “computer room”.  Today’s senior goes on line every day, checks their email, uses an e-reader and an IPad.  Accustomed to having access to the world in their own home, they naturally seek the same environment in an Independent, Assisted Living or any type of Healthcare Facility.

THE NEW REALTY, WIFI IS A MUST

Senior communities that have upgraded their facilities to accommodate greater internet access by offering Wi-Fi have attracted the tech-savvy resident.  For example Texas-based Morningside Ministries offering Wi-Fi found that it was vastly important to resident satisfaction.  Morningside began to install Wi-Fi to all of its campuses and continues to add Wi-Fi to its buildings undergoing redevelopment and its cottage properties.  Residents use technology to check bank accounts, investments, retirement accounts, order products, print maps to travel, access books for their e-readers, or to access social media like Facebook.  Almost all use the technology to stay in touch with family members by e-mail.   Keeping up with the times, Emeritus, whose $2.8 billion merger with Brookdale Senior Living forms the largest senior living provider in the nation, has transformed common areas into Internet cafes.

THE NEW REALTY CREATES THE NEED FOR TECH-PARTNERS AND TECH SUPPORT

Implementing and improving technology in existing senior communities and in new development to   KEEP WITH THE TIMES it becomes necessary to have a tech partner and engage a staff tech support person. Only 40% of senior housing organizations have somebody who is head of technology.   Engaging with tech partners in the early stages of a development can refine the plan and design in the construction process to get the most out of the technological services.   Creating a position for a tech support staff member will ultimately help senior housing communities maximize their use of technology and their ability to provide technology services to all residents.

ONWARD AND UPWARD FOR A BETTER SENIOR WORLD THAT KEEPS UP WITH THE TIME!