For many senior living operators, expanding into home care seems like a natural progression — and for good reason.
Home care presents a valuable opportunity for operators to expand services and access new revenue streams. As the old adage reminds us, however, it’s usually the second mouse that gets the cheese. Put another way, some operators are learning the hard way that home care may be a concept that’s ahead of its time.
Consider Atria Senior Living’s recent decision to close its New York-based home care subsidiary. Initially launched to enhance the synergy and support among its 30 assisted living communities in the metropolitan area, the home care division ultimately fell short of expectations.
This exit might be more of a strategic retreat than a misstep. By doubling down on its strengths — operating one of the largest senior living portfolios in the United States and Canada — the company appears to be mitigating risk.
Still, this development also might serve as a cautionary tale.
Generally speaking, expansion often is necessary for growth. But it also can lead to overextension — particularly if it involves a sector such as home care, which has a few problems of its own. Reimbursement complexities with Medicaid, Medicare and private payers continue to be significant hurdles. Persistent issues such as fraud, staffing shortages and quality of care concerns have led some to liken home care to the Wild West.
That’s not to say home care is a bad idea. In fact, for many operators, it’s a logical next step. Atria’s experience, however, underscores the importance of timing and careful execution.
We might be witnessing the early stages of what could become a robust model for senior living, but early movers face considerable challenges that could leave them bruised before the model is fully refined.
In the meantime, it may be wiser for some to let others take the risks. After all, the cheese isn’t going anywhere.
John O’Connor is editorial director for McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.
