Bundling Boomer Housing with On-site Primary Care and Wellness-Focused Living: It Just Makes Sense

According to the U.S. Census Bureau, the entire baby boom generation will be age 65 or older by 2030. Many boomers will move into senior living environments. The National Investment Center for Seniors Housing and Care (NIC) estimates the value of investment-grade U.S. seniors housing and care property at $477.8 billion.

In recent decades, many seniors have opted to “age in place” in continuing care retirement communities spanning independent and assisted living, skilled nursing care, and memory care and offering various amenities including meals. Monthly pricing, according to NIC, averages $3,353, with entry fees averaging $410,000 for buy-in models, according to U.S. News and World Report.

Active adult living 

In a 2023 American Seniors Housing Association (ASHA) study, researchers found that, when considering senior living, 92% of baby boomers agree or strongly agree that remaining independent and self-sufficient is important. To address this demand, a newer senior living concept called “active adult living” evolved about eight years ago. Early models offered new homes for purchase by individuals aged 55-plus in large communities. 

ASHA states that active adult and 55-plus communities:

• are for independent people who want to spend less time maintaining their homes and more time enjoying life and socializing.
• offer options to own or rent single-family houses, patio homes, apartments,  and condominiums; most offer fee-based outdoor property maintenance, housekeeping and/or hospitality services.
• often incorporate clubhouses, pools, and other recreational/social spaces.

Many charge upfront fees, monthly maintenance fees, association dues, and/or fees for the broader community’s real estate taxes, assessments, and utilities. 

Not all seniors can afford this option. According to The Federal Reserve, less than half of adults 60-plus believe their retirement savings are on track. Vanguard reports that for those aged 65-plus the average account balance in employer-defined contribution plans is $232,710.

Growth in active adult rental properties 

A niche sector called “active adult rental properties” is becoming more popular. NIC developed this industry-standard definition in Fall 2022:

“Active adult rental properties are age-eligible, market-rate, multifamily properties that are lifestyle-focused; general operations do not provide meals.”

“Within the nearly 800 active adult properties totaling more than 116,000 rental units tracked by NIC, fitness centers and pools are among the most common amenities. Longer life expectancy, increased solo aging, and changing lifestyle preferences are driving demand for these maintenance-free, lifestyle-focused communities,” stated NIC Principal Caroline Clapp in a recent blog post. 

What does “lifestyle-focused” mean? Webster defines lifestyle as “the typical way of life for an individual, group or culture.” Examples are communities built around common interests such as golf, religion, the arts, and more. 

Active adult living + primary care + prevention

Many boomers have intentionally embraced health- and wellness-focused lifestyles. While senior living golf courses and swimming pools support healthy lifestyles, a new approach takes this concept one step further.  The model embeds a primary care clinic onsite in multifamily adult living rental properties. The goal is to help residents “age well in place” for as long as possible. 

Residents can opt to use the onsite clinic for primary care or a hybrid virtual offering – and can use existing insurance providers. Many residents appreciate developing a relationship with this onsite practitioner  – a concept harkening back to the days of knowing your family doctor. Clinic services can also be made available to individuals from the surrounding geographic area.

All residents have no-cost access to wellness-focused amenities such as swimming pools, pickleball courts, fitness centers, onsite yoga/meditation studios, and education about healthy eating, exercise, and more. These preventive care services are planned/guided by professionals from the on-site clinic. The building may also include a coffee shop, coworking space, and other shared community spaces.

The goal is to enable residents to live independently for as long as possible before needing higher acuity care. According to a study published in the BMC Public Health journal, chronic diseases have a crucial effect on health-related quality of life for middle-aged and older adults, but physical activity and a focus on holistic well-being can improve their health. 

Affordability is critical

This rental model should address an often-overlooked aspect of senior housing: affordability.  

NORC at the University of Chicago estimates that the U.S. will have 16 million middle-income seniors in 2033 and that many will struggle to pay for health care and housing. In a November 2023 report from Harvard’s Joint Center for Housing Studies, researchers found that the urgent need for affordable housing and care will grow, not only because of the increasing number of older adults but also because of widening wealth and income inequality.

Based on geography, mid-market rental pricing for a one-bedroom unit in this type of community could be as low as $1,500 per month.

Concierge services: Fee-based or value-based approach

An extension of this model includes concierge medicine offerings that: 

• help residents navigate healthcare system complexities.
• support a holistic, proactive approach to healthcare.
• enable residents to engage more fully in identifying, addressing, and reducing risks associated with chronic disease and mental health conditions
• optimize care coordination and chronic care management

The earliest of these communities will likely make concierge services available on a fee-for-service basis. Over time, service delivery could be aligned to value-based reimbursement.

By 2030, CMS seeks to have all Medicare beneficiaries enrolled in accountable, value-based care programs. Advanced primary care is a core mechanism for achieving this goal, they say. 

In recent years, some senior living operators and medical groups have delivered value-based care in assisted living settings. One challenge: the average age of assisted living residents is the early 80s, a time when many have already developed chronic conditions. Another challenge: most senior living operators offering value-based care require that residents have a Medicare Advantage plan which precludes individuals under 65.

Social connectedness

Many older adults cite a desire for more social connections as a key reason for moving out of single-family residences. Certainly, the concept of “community” contributes to wellness. In the world’s longest studies of adult life, Harvard researchers found that good relationships with people keep us happy and healthy.  The National Institute on Aging cites studies showing that loneliness and social isolation are associated with higher risks for health problems such as heart disease, depression, and cognitive decline. 

Senior and active adult living communities provide built-in opportunities to interact with peers and establish relationships. Rental properties are emerging as a more popular option. NIC states that adults aged 65 to 74 are the fastest-growing renter cohort in the U.S., with an additional 2.2 million adults aged 65 and older entering the rental market over the next decade. 

Conclusion

“Minimizing expensive hospitalizations not only saves our healthcare system money, but also benefits property-level occupancy. Additionally, with higher quality of care and an increased focus on preventive healthcare, resident satisfaction should improve, decreasing unwanted resident turnover and aiding in resident recruitment and retention,” state authors of Financing Approaches for a Value-Based Approach in Senior Living from Vium Capital.

Making healthcare more accessible and affordable among seniors is not just timely — it’s the right thing to do. The benefits of delivering value-based care in senior living environments are straightforward. Providing proactive and preventive health-focused living among younger, less affluent senior populations — and extending this into value-based care — just makes sense.  The time is now to move the needle forward on the “active adult living + primary care + prevention” model.

Photo: kate_sept2004, Getty Images

This post appears through the MedCity Influencers program. Anyone can publish their perspective on business and innovation in healthcare on MedCity News through MedCity Influencers. Click here to find out how.