Complicated Concepts
The process gets a little more complicated, however, with the addition of a continuing care facility.
“The [continuing care retirement community] concept is not well understood or accepted in all parts of the country,” Jones laments. “We help [city officials] understand that this is an opportunity to keep or draw middle- and upper-income seniors in their community rather than having them move to another area,” he says. That generates more dollars from property and sales tax revenues.
State health care agencies may be a tougher sell, however. “If you’re running a [continuing care retirement community], you need approval from the state for skilled-nursing beds,” says Judy Braun, Kendal’s director of operations. State regulators allow only a certain number of beds per community. That’s largely because many skilled nursing facilities get a large portion of revenues from Medicaid, making them a drain on state budgets.
High-end continuing care retirement community developers can argue for additional beds by showing the income levels of their tenant bases. In most cases, tenants are not Medicaid-eligible and won’t bleed the state’s budget. And because the communities target active adults, they’re in better health to begin with.
Another challenge presented with the addition of healthcare services is personnel. These high-touch communities require more than leasing, maintenance, and grounds staff. Nurses, healthcare aides, food service workers, and other specialists make costs balloon. Kendal employs about 200 full- and part-time staff members for every 300 residents.
“Keeping full is important because we need revenue coming in to support the community on an ongoing basis,” Braun notes. Kendal’s turnover ranges from 5 percent to 8 percent a year.