An Overlooked Solution to Declining Occupancy in Assisted Living – Hiding in Plain Site

As of Q2 2019, assisted living occupancy is 85.1%, the lowest level ever recorded by the National Investment Center. Not surprisingly, this causes more than a little anxiety among senior housing organizations and their investors. Low occupancy erodes profitability, which forces AL communities to trim the quality or level of services they can offer. It then becomes increasingly difficult to attract new residents, setting up a vicious cycle.

With overbuilding and fierce competition limiting the ability of AL to raise prices, communities have turned to alternative strategies for boosting occupancy, revenue, or both.  Better building design, enhanced culinary options, and building in more attractive locations are a few examples. Some organizations have created their own “private label” home health and hospice agencies. Even more radical, a few senior housing organizations are starting a Medicare Advantage Plan for their residents. If done right, such a venture would create a significant new revenue source for the community – or so the theory goes. 

But the absence of documentation suggests that none of these strategies has led to increased occupancy rates.  Each would require AL communities to greatly expand their skill set, and even if they were to acquire the ability to provide those services profitably, none offers a clear path to the goal they strive so hard to attain - longer lengths of stay (LOS) and higher occupancy.

Meanwhile, the one strategy that virtually guarantees longer lengths of stay and higher occupancy has been hiding in plain sight: high quality, onsite primary care. 

Why do they go?

To understand the rationale for the onsite primary care strategy we recommend, let’s start by acknowledging why 80 – 90 % of residents leave an AL community. Attrition is a critical issue because resident turnover rate in AL is a debilitating 54% annually. In the face of that turnover rate, keeping beds full is a Sisyphean task. Residents only rarely leave because they don’t like the food, don’t get along with the staff, or run out of money. Eighty to ninety percent of residents leave AL because of health-related reasons: one-third of them die, and more than half transfer to a higher level of care.  If communities could figure out how to reduce the relentless decline in the health of their residents, this would extend the life span of its residents and reduce their transfer to a nursing home.

Easier said than done.  Better health care services are the sine qua non, but particularly difficult to achieve for the complex elderly individuals characteristic of today’s AL resident. Moreover, getting into the business of providing medical care is anathema to most AL communities. Doing so would surely be accompanied by unwanted SNF-like regulations as well as greatly increased liability. 

Integrated Care – the blending of healthcare into the assisted living social model.

Fortunately, there’s a way out of that conundrum. It’s what we previously described as the “Integrated Care Model” of AL services, wherein the community “outsources” the medical services for its residents to a practice that provides primary care onsite in the community, specializes in the care of complex older patients, and ideally has a track record of achieving better clinical outcomes. Such a service has been shown to increase LOS by at least 6 months and save significant revenue for the AL.

How are such dramatic results achieved?

The benefits of onsite care have been shown in a national Medicare demonstration program known as Independence At Home (IAH). Benefits were achieved by providing proactive, prevention-oriented primary care – a strategy that keeps residents from lurching from one crisis to another. This strategy is the cornerstone responsible for reducing unnecessary emergency room visits, hospitalizations, and hospital readmissions. This allows residents to age in place with as much dignity and independence as possible, as long as possible, thus increasing LOS and occupancy.

Applying the strategy of standardized, predictable, high quality, onsite primary care would increase profitability not only by boosting occupancy but also by reducing costs. Transporting residents back and forth to myriad doctors’ offices, phlebotomy stations, and imaging centers is an expensive undertaking. It becomes even more so if a staff person must accompany a resident who may be cognitively impaired. It is also time consuming and expensive for community personnel to arm wrestle with brick-and-mortar practices to get a medication refilled or a form signed. 

What do we mean by “proactive primary care?”

It starts with improving access. When it’s tough to connect with a doctor, you tend not to go; you postpone and postpone, until there’s a crisis. At that point you wind up in the ER. From there, it’s a slippery slope into the hospital, and from the hospital into the SNF, from which the resident may never return. AL communities are all too familiar with the mantra “when they go out, they don’t come back.” Given that’s the case, the trick is to keep them from going out in the first place.

Post-acute vs. Pre-acute

Far too much attention has focused on the “post-acute space.” We believe the emphasis of this notion is misplaced; the horse is already out of the barn. The focus must be on the “pre-acute space” where clinicians can reduce unnecessary ER visits and hospitalizations by seeing patients often, and in detail, in their own environment, and effectively coordinating care with family and community caregivers, as well as with sub-specialty colleagues. That’s what we mean by “proactive primary care.” It is problematic for clinicians in a traditional brick-and-mortar, fee-for-service practice to provide such care. And it is not their “fault.” The nature of the healthcare delivery system as it exists today makes the offsite care of AL residents in this setting inefficient, awkward, and cumbersome.

The 15 practices chosen by Medicare to participate in IAH have proven that home-based primary care – the formal term for the practice model described above – is the best practice model for improving access to care, providing proactive primary care, and achieving the better clinical outcomes that result from that strategy. In addition to the IAH practices, there is a small but growing number of home-based primary care practices around the country. The American Academy of Home Care Medicine (AAHCM) maintains a list of such practices by location. 

Standardized, predictable, high quality onsite primary care is not only the best way to reduce the flow of residents leaving the community and thus improving occupancy, it is also the “added value” service most likely to attract new residents into the community.  Except for the beauty salon, no other service even comes close!

Dr. Steven Fuller is a triple board-certified physician/entrepreneur who develops programs in support of an Integrated Care model of senior housing. This model includes 3 equal, interactive, and mutually supportive team members: real estate, hospitality, and healthcare. He can be reached at: stevenfuller@illuminationanalytics.com

Dr. Alan Kronhaus is to co-founder of Doctors Making Housecalls, the largest geriatric primary care practice in the US southeast and which provides its primary care services in over 400 assisted living communities in North and South Carolina. He can be reached at: akronhaus@doctorsmakinghousecalls.com