Wednesday, June 30, 2010

IRS Changes Rules for CCRC's Refundable Entrance Fees?

From a recent article:
The Internal Revenue Service surprised and alarmed retirement community operators recently when it challenged an operator of luxury continuing care retirement community’s tax treatment of refundable entrance fees.

Classic Residence by Hyatt...followed industry practice by treating the refundable portions of residents’ entrance fees as loans with obligations to repay. In December 2009, the IRS sent a notice of deficiency for almost $129 million for the 2005 tax year to Classic insisting that the company should have treated the more than $318 million it received in mostly refundable entrance fees that year as taxable income “from rental/occupancy of the living units.”
Will this ruling stick and how might it change CCRC financial management?  Are operators actually alarmed?  Erikson, for example, which operates many communities (including Ann's Choice near me in Warminster, PA) still highlights its "Refundable Entrance Deposit" as a key selling point.

Tuesday, June 29, 2010

Baby Boomers and Continuing Care?

Today I have mostly questions.  Here are just a few...
  • Today's new retirees, now age 65, are baby boomers.  Will they become the next generation of residents moving into CCRC's?  (I bet that enough of them will want a very different kind of long-term community to support some very interesting niche-markets in the near future.)
  •  Who is serving the 'cultural creatives' - the boomers who shop at Whole Foods or listen to NPR?
  • Who is positioned to serve the over-65's who want to live in eco-villages, or who might prefer a more age-integrated community (not just over 55), but will also eventually need continuing care?
  • Will baby boomers even move into CCRC's or are their tastes and needs so different from their parents that the CCRC industry faces decline in 10 or 15 years?
  •  Are CCRCs essentially a North American phenomenon, and mostly in the U.S.?
  • Is there a CCRC industry in Europe or Asia and what does it look like? Can we learn from them or can they learn from what's been done in the U.S.?
  • What does the global trend toward urbanization mean for senior living and CCRCs in particular?
  •  And is urbanization relevant to senior living and retirement communities in the U.S. and other developed countries?

Monday, June 28, 2010

The CCRC industry needs Innovators

Last week I spoke with Rob Love of Love and Company, a senior marketing specialist who serves the continuing care retirement community (CCRC) industry.  Rob was very generous with his perspectives on the current state of the CCRC market, possible futures for the industry, and where I might fit as a newcomer.  Here are just a few of the impressions I gathered during our conversation.

My friend Bob Milanovich, who referred me to Rob Love, works in the not-for-profit segment of the CCRC industry.  Rob Love focuses on serving non-profit communities, and he explained that he prefers to work with mission-driven rather than profit-driven organizations.  Rob believes that the quality of care tends to be a bit higher in a non-profit setting. (I'd like to find the research he mentioned that demonstrates this difference.)  He also has the sense that non-profit communities are a bit more stable, not beholden to shareholders or focused on quarterly profit reports.  There may be a bit more risk or volatility in for-profit continuing care retirement communities.  (I wonder how/whether this affects the employees and residents.)

According to Rob, many continuing care communities are 10 years behind what today's potential residents want and need.  Their facilities may not have been updated and their approaches to selling the benefits of their communities may have become stale.  Both the physical and social infrastructure of many CCRCs need to be upgraded.

Who works in sales/marketing?  Rob informed me that the typical marketing director is a woman in her mid 50s, who returned to work when her kids started school.  Often she started as a receptionist and eventually worked her way up in the sales/marketing department until she became director.  This observation is not meant to disparage these people, only to point out the potential benefits from a broader range of disciplines and experience as the industry moves forward.  The CCRC industry really needs innovators.  Some of the most effective executive directors that Rob knows have come from other industries.  One of the best CCRC executives came from banking, making a significant impact with strategic-planning and team-building in the CCRC setting.

Sunday, June 27, 2010

Inspiration for hands-on community building

A few weeks ago I spoke to Bob Milanovich at John Knox Village (Pampano Beach, FL) about changing careers and working in the senior living/CCRC industry.

I've known Bob for 16 years.  Our friendship developed during family visits to my great-grandmother who lived at John Knox Village (JKV).  My great-grandmother died about 9 years ago but my paternal grandmother still lives there.

I met Bob while I was a teenager, the oldest of 9 kids, when we drove from Kitchener, Ontario, Canada to visit my great-grandmother and grandparents over Christmas.  Somehow we ended up singing on stage at the John Knox Village holiday program.  My youngest sister was a toddler at the time.  At one point I knelt beside her holding the microphone while she sang "Jesus Loves Me".  As Bob tells it, he fell in love with my entire family at that moment.

After the show we spent a very memorable evening with Bob driving around the village crowded into a golf cart.  (We obviously didn't all fit, so we took turns walking.)  Bob took us caroling to the 'villas' where residents lived independently.  We caroled through the assisted living building and sang to the little groups sitting in the common areas of the nursing center.  We completed the evening by going room to room, crowding around individual beds in the nursing center, singing to people who were unable to get up.  My parents had taken me on a number of visits to nursing homes while I was a boy so the delighted smiles, the soft hands, and the thin arms were very familiar as we sang and hugged our way through John Knox.

After that, our caroling became something of an annual tradition.

What I noticed about Bob that first night became more apparent as I got to know him during our visits. (We sometimes lived for a week on the JKV campus as Bob's guests.)  He was Director of Marketing and I understood that his job was to sell JKV to new residents, yet he did so much more.  His presence lit people up.  Bob deeply cared for his residents' well-being and by extension, for the whole community.  Though he may technically have been 'only' an employee, as Bob walked around JKV he behaved as though he was the host or proprietor.  He always seemed to be walking around the community or whirring along in an open golf cart, stopping to shake hands, answer questions, give hugs, or to thank and encourage staff.  He made it his business to ensure that everyone felt appreciated from the lowliest staff in housekeeping or dining service, to residents and visitors.  I watched as Bob drew people in and made them part of the enterprise.  He was both humble and in-charge.  He exercised a kind of leadership that was subtle yet very effective - making residents feel at-home, cared for, and part of a meaningful community.

As I began considering a career in senior living and community entrepreneurship, I realized how deeply Bob Milanovich's example had touched me.  I am very grateful for his encouragement and his kindness to my family.

Saturday, June 26, 2010

Hospice and end-of-life care: thanks Grandpa!

Today I discovered that one of my neighbors had been a hospice nurse for a number of years.  He visited his patients at home or in nursing facilities (this being a key principle of hospice care - to bring care to the dying person rather than transporting the person to a new location.)

In his experience death and dying are taboo subjects.  People are generally unwilling to talk about death and the process of dying.  "God forbid!" you are supposed to say if the subject of death accidentally comes up.  This lack of conversation and real communication about death and dying makes the whole process much more painful for families and much more complicated and awkward for everyone involved.

I look forward to talking openly about death as a part of life, as a transition from this world we know to the world beyond death.  Regardless of what people believe about an afterlife, the end-of-life process will be more manageable, if no less challenging, as we talk things through.  Hopefully before-hand.

What's the standard in the senior living industry?  Do marketing directors mention the dying process when selling the continuing care retirement community concept?  From what I've seen there is lots said about the care continuum from independence to assisted living and skilled nursing, "if the need arises".  But how do they communicate about death?  Or do they?

It reminds me of my 2 years working for a financial planning firm, selling life and long-term care insurance.  Our sales training encouraged us to skirt the issue of death, because although death sells in the media and on soap operas, it doesn't actually sell life insurance.  Even calling it 'life' insurance obscures the fact that you are not insuring life, rather you are insuring against the economic consequences of death.  Although death was rarely mentioned to prospective clients, the organizational culture where I worked sometimes used death for emotional leverage, to stimulate fear or shame (when appealing to love or duty failed), and hoping to sell insurance as relief.

I understand that the term 'life-care community' has gone out of fashion (now everyone is a CCRC instead) precisely because 'life-care' implies death.  But as my neighbor the hospice nurse pointed out: life is a terminal illness.  Everyone dies.  I'm not saying that death doesn't frighten me a little.  I am afraid to die: partly for myself - I don't like pain and don't want to 'miss out' on this familiar life; and partly for my family, my wife and kids who will be sad when I go.

But I am certain that death and the process of dying are not the worst things that can happen.

My maternal grandfather died this past Monday morning.  He was very dear to me and I am sad to lose his physical presence in my life.  But he was not surprised.  He was ready.  He had already embraced the process, which accelerated rapidly over the preceding 7 days.  He was in his own room, looking out on his beloved church across the valley with an ancient sycamore towering in the foreground. He was eager to be reunited with his wife of nearly 60 years, with whom he was more strongly connected than ever, despite the 5 years since her death.  And he was at home, surrounded by loving children, visited by friends and tiny babies, basking in the prayers and fond remembrances sent his way by others who could not be physically present.

I missed my grandfather's last week of life.  I was not at his bed side.  I was in the Outer Banks with my in-laws, on the annual beach trip that my wife and kids look forward to all year.  And I am content.  In the several years before my grandfather's death I frequently walked down my street and through neighbors' yards to visit him.  I had spoken to my grandfather at length the week before, and I had what I needed.  I told him that I was embarking on a new career.  He expressed his love for and confidence in me - and let me know that his previously-held concerns about my life-direction were gone.

So as my grandfather was dying these past months and this past week I experienced peace.  I knew he was in our Creator's tender care, and I was certain that his family's loving hands were supporting him during his transition.

I am determined to find ways to help others experience their own version of this remarkable process of dying.  Along with the sorrow or pain, I wish for others to experience the death of their loved ones as an opening for peace, healing, and unexpected blessings.

Friday, June 25, 2010

New Career: Creating Community in the Senior Living Industry

Today I launch a new career. I've been investigating the senior living industry for the past few weeks  - as an offshoot of my broader survey of the commercial real estate industry. Today it's official.

I am pursuing a career in the entrepreneurial creation of genuine community. The senior living field brings a number of services, helping professions, and business disciplines together in a conscious attempt to deliver the experience of community. It's my hunch that the most successful senior living operators are those that can effectively invite people to participate in a thriving community AND consistently deliver a community experience to residents and their (very important) loved ones.

I'm especially drawn to the continuing care retirement community model (CCRC, also called a life-care community). CCRC's integrate a comprehensive array of services along the continuum from independent living, to assisted living, to skilled nursing care. I look forward to learning how the pieces fit together and which elements are key for developing and sustaining a sense of genuine community among residents, staff, and family/friends who live elsewhere.

In my next few posts I'll touch on the following:
  • An inspiring example that steered me onto this career path
  • Perspective from a Care Coordinator with decades of experience in assisted living
  • A 5-10 year outlook for the senior living industry from a CCRC marketing specialist
  • Updates as I learn about senior living and CCRC's in my area (Philadelphia region)
  • Pertinent discoveries during my job hunting process
  • Impressions as I visit senior living communities - surprises, what I like/loathe, comparisons, interesting people
My first significant goal: secure a challenging job with advancement potential in a thriving community in 5 weeks (by Friday, July 30, 2010)....Here we go!