Back to Longevity Economy NotesPost-Pandemic, What’s Next For Senior Housing?
There are positive signs that the global pandemic nightmare has begun to ebb. Can senior housing operators and investors begin to breath a sigh of relief?
The answer is – a definite maybe.
But not in the way many investors and operators may think.
A year ago the pandemic ravaged senior housing in Washington State and later turned into an unimaginable human crisis in New York and everywhere in between. The virus struck down thousands of older people and many frontline caregivers. For a time, senior housing became the COVID ground zero. Residential census numbers across the country fell to record lows.
Last week I had the pleasure of joining my friend Willy Walker, Chairman and CEO of Walker Dunlop, on his Walker Webcast discussing the implications of the longevity economy on business and society. During our lively exchange we noted Ben Swett’s article in The Senior Care Investor reporting that Brookdale’s census numbers hit a low of 69.4% in February. However, Swett observed that it was the smallest decline since last March, causing him to ask if the numbers have “bottomed out?”
Analysts, investors, and operators alike are anticipating getting back to a 2019 normal in a post-COVID world.
Perhaps.
The lasting impact of the pandemic is far more than the trauma of a year of fear. It was also a year of learning for both older adults and their families.
As noted in my earlier article, the pandemic has served as a propellant pushing technology into the lives adult children and older adults at an unprecedented velocity. COVID-19 has been a year of what might be best described as ‘basic training’ in using technology to hack novel ways to monitor, manage, and care for older loved ones.
My MIT AgeLab colleagues have been conducting an ongoing study of evolving attitudes and behaviors during COVID. Early on we found that technology became the new toilet paper. As the pandemic tightened its grip on our lives last spring people rushed out to buy toilet paper by the pallet load but they also rushed out to buy technology. Suddenly nice to haves, such as smart speakers, tablets, WiFi-enabled security systems became need to haves.
The lockdown forced new habits. Life-by-app, once reserved for young convenience-starved Millennials and Gen X’ers, became a way of life for many older adults. A tech-enabled, home-as-a-service (HaaS, learn more here), lifestyle may be not perfect but it can be a stopgap.
Technology provided connectivity for isolated older adults and extended the reach of family caregivers. On-demand delivery of everything from groceries to medications became a means for older people to remain safe and for adult children to ensure their parents had what they needed. For some, a doctor’s visit was only a mouse click away. Video enabled adult daughters to ‘see’ how mom was doing as well as remind her to take her meds. Grandparents that may have once wondered why bother with tablets and laptops now found them to be opportunities to have pop-in moments with grandchildren.
What may have taken another five to ten years to push these technologies into people’s homes took only a year during the pandemic.
The result? At least under COVID conditions, a technology alternative to senior housing emerged this past year perhaps delaying the conversation that adult children loath, and many older adults fear – is it time to leave home?
What do you think this means for senior housing, particularly assisted living?
At least four possible, far from exhaustive, scenarios emerge.
I want to hear from you. Please read through the four scenarios below, and click on the following survey to vote the likelihood of each.
Scenario 1 Back To Projections
As the name suggests, the pandemic ends, residents and staff are universally vaccinated, and the memory of 2020 recedes. Resident demand rises to 2019 levels and growth continues based upon pre-pandemic projections.
Scenario 2. Decision Delayed
Adult children use technology to extend their capabilities and feel more confident to delay the conversation with their parent about moving from the family home. Older adults believe that technology and related on-demand services increases their capacity to stay in their homes longer.
As a result, future assisted living residents are likely to have higher levels of acuity and require more costly care. Tomorrow’s resident will be older than today’s new resident and are likely to have shorter stays.
Scenario 3. From Property Line To Pipeline
Senior housing innovators do not see technology as a threat. Instead, they see technology in the home as a pipeline. Senior housing companies go beyond their property lines to develop new tech-enabled services and enter the homes of older adults providing a wide array of branded services. These might include home safety inspections, technology installation, integration, and instruction, remote monitoring, medication management, rehabilitation, and much more.
The pandemic becomes a transformational pivot point for industry leaders to not simply improve what they do today, but to form a new services category that effectively becomes virtual assisted living. These services support both the older adult and their families; builds brand trust, and ultimately a pipeline to higher levels of residential care and experience.
Scenario 4. Desire & Delight
Senior living innovators create a community-based product and service experience that elicits so much older consumer desire and delight at the prospect of living there that aging-in-place is simply less attractive. While possible, this will require significant capital, immense investment in service innovation, and in the short-term, is likely to be available only to the most affluent.
Click here to take a two minute survey to vote and comment on which scenario you believe most likely.
A year of finding novel ways to muddle through have profoundly influenced how older adults and families view their capacity to live independently and deliver care. While many investment analysts and industry observers believe that the number of older people alone demonstrates a growing and predictable demand for senior housing the longevity economy is about more than numbers. The experiences, expectations, incomes, and evolving attitudes of older people and their families are moderating influences on the promise of demographic projections alone.
That’s my take. I will report out the survey results of what you, my readers, see as the future of senior housing in a forthcoming article.