The senior living industry is facing a unique challenge known as the “three-body problem” – a complex issue that needs strategic solutions. Recent research suggests that senior living communities have the potential to reduce overall healthcare spending for older adults.
An analysis conducted by NORC at the University of Chicago in collaboration with the National Investment Center for Seniors Housing and Care (NIC) revealed promising results. The study showed that independent living and assisted living residents had lower healthcare costs compared to those living in non-congregate settings.
Despite these findings, the specific mechanisms through which senior living communities achieve cost savings require further investigation. Dianne Munevar, Vice President of Health Care Strategy at NORC, highlighted that reduced emergency department visits and hospitalizations are major contributors to these savings.
As the healthcare landscape evolves, senior living operators must adapt to value-based care structures and consider engaging with accountable care organizations (ACOs) and increasing Medicare Advantage (MA) participation. This shift towards value-based care is essential for the long-term sustainability of senior living communities.
Senior living operators face ‘three body problem’
Operators in the senior living industry are struggling to pivot towards value-based care structures due to limited scale and financial resources. This challenge is not unique to senior living alone – the broader healthcare industry is also grappling with similar issues.
Addressing the three-body problem involves ensuring affordable housing and care for the growing population of older adults, managing self-care limitations, and overcoming workforce shortages in caregiving and service provision.
Despite these challenges, there is a significant opportunity for senior living operators to play a key role in solving the three-body problem through innovative solutions that prioritize resident well-being and healthcare outcomes.
By leveraging data, forming partnerships with healthcare providers, and aligning with value-based care models, senior living operators can navigate the evolving healthcare landscape and set a course for success in the years to come.
