The Surprising Impact of Business Models on Senior Living

A businessperson is drawing a technical architectural sketch with a black pen

Finger Lakes Senior Living: A Wide Variety of Options

There are senior living communities all across the Finger Lakes region of New York State, but no two are exactly the same. Plenty of factors make them unique. Location, history, and other qualities help define each one, but you might be surprised to learn that a community’s business model is one of its most important characteristics. 

Almost every decision at a senior living community is influenced by the underlying business model, which is why it’s important for families to understand the different types of business models when choosing a community for their loved one. In this article, we’ll look at some of the most common models, illustrate how they impact care, and we’ll share the approach we believe leads to the best results. Most communities fall into one of three categories: medical organizations, not-for-profits, and for-profits.

Hospitals and Health Care Systems

Hospitals and health care systems are one common category of senior living community builders. They often enter the market when they decide to add senior living to their list of care options. From their perspective, it gives them a more convenient way to provide intermittent or low-level care to seniors who don’t quite need a nursing home. Senior living communities run by hospitals or health care systems do provide great medical care, but many of their decisions can be guided by institutional influences. For example, they might build their system around what insurance plans cover, or what the government regulations dictate. While this approach can feel somewhat impersonal, the readily available care options could be attractive to seniors who anticipate needing medical care. 

Not-for-Profit Communities

Another common model is the not-for-profit senior living community. Many churches and charitable organizations see senior living communities as a way to further their mission. Whether they focus specifically on the poor, those with special needs, or take a broader approach, their overarching mission inspires every move they make. This makes them a great choice for people who believe the same things (spiritual or otherwise) as the group who runs the community. For example, if a community was run by a certain religious denomination, seniors who are members of that denomination would naturally feel right at home living there.

Not-for-profits do face unique challenges, and focusing on their specific mission can sometimes take up all their resources. But, for people who align with the mission, not-for-profit communities can be the perfect place to live.

For-Profit Communities

The final category is for-profit Communities. They are operated as a regular business and need to be profitable, but, as with any business, each has their own unique goal. There are enough variations within this category that it’s worth splitting them into three sub-categories and looking at each individually: real estate developers, conglomerates, and family businesses. They all work towards having a profitable organization, but each model has its own unique perspective.

Real Estate Developers

Real estate developers often create senior living communities. It’s a very attractive prospect: develop a property into beautiful apartments, help senior citizens move in, and never have to worry about difficult tenants breaking fences or making too much noise. While their business models may lean towards a real estate mindset, developers are very skilled at solving zoning problems and coordinating construction work, like building additions. This gives them an advantage in opening up new communities in places without many options, which is good for seniors in under-served areas.

Conglomerates

Many senior living communities are run as part of a conglomerate. Often found in large cities, conglomerates are usually created when many facilities are combined into a single large network. This could happen if one community is particularly successful and buys up others, or, more commonly, investors could get into the business through buying up a number of established communities. Similar to real-estate developers, the conglomerates are able to solve problems in ways that smaller facilities might not be able to. The downside is that there may be more layers of bureaucracy and a shift in focus towards shareholder value instead of resident wellbeing. Despite a culture that can feel somewhat corporate, conglomerates do have to provide a competitive service in order to succeed, so many seniors find them to be a good option.

Family Businesses

The final sub-category of for-profit communities is family businesses. Handed down from generation to generation, these organizations tend to be deeply connected to their local community. When a family is the driving force behind a business, it shows. Parents, for example, invest deeply in their children and do whatever it takes to care for them. Those family values make a big impact on businesses. Family-owned senior living communities are often characterized by a more personalized approach to care, and a greater appreciation for the individuals who make up their company. One possible downside for family-owned businesses is that they may not have the same level of access to resources that larger organizations do. Seniors who prefer a personal approach and don’t mind occasional creative problem solving will feel right at home in a family-run community.

Mindset Matters: Person-Centered Care

The many types of community business models can seem overwhelming. How can someone choose between all the options? Thankfully, there is a particular characteristic to look for: person-centered care. Person-centered care focuses on one question: “How do I give this person the best possible life?” It then makes decisions based on what residents need. While this approach may not lead to the fastest growth or the biggest return on investment, designing communities around resident needs certainly affords them the best quality of life.

Person-centered care is not explicitly connected with any of the business models, but is often found in smaller, family-owned facilities. Those communities tend to prioritize family values, which makes person-centered care a natural mindset. That’s not to say that no other type of community can arrive at a person-centered business model. Hospitals, for example, may see person-centered care as an extension of popular patient-centered care methods. Real estate developers could just as easily place the emphasis on meeting resident needs. However, as we explored above, each community’s background will influence its mindset.

Where to Go From Here

The underlying business models makes a big difference in how each community makes decisions and which values they put first. Prospective senior living community residents have plenty of options to choose from, and local seniors can likely find examples of each type of community here in the Finger Lakes Region. Our experience is that person-centered care makes for the best quality of life. If you’re looking for a senior living community that takes the person-centered approach, you’re in the right place! Ashton Place is proud to offer several options built around resident needs. But, if you’re still not sure exactly what you’re looking for, we are more than happy to help you through the process.

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