Institute Talk: A Conversation with Benchmark Senior Living Founder Tom Grape

The original article, Institute Talk: A Conversation with Benchmark Senior Living Founder Tom Grape with Len Fishman, appears on The Gerontology Institute blog, University of Massachusetts Boston.

 The Branches, an assisted living community in North Attleboro, offers “companion-living” accommodations exclusively.

The Branches, an assisted living community in North Attleboro, offers “companion-living” accommodations exclusively.

Assisted living has been an extraordinary successful model for combining housing and personal care. But the cost often puts assisted living out of the reach of many middle- and almost all lower-income elders and their families. Benchmark Senior Living, a leading provider of senior living services in the Northeast, recently opened a new community in North Attleboro, Mass., that found a way to lower costs by rethinking space and the way residents live.

Gerontology Institute Director Len Fishman recently met with Tom Grape, the founder and chief executive of Benchmark Senior Living, to talk about the economics of assisted living, the ideas behind The Branches community in North Attleboro and other issues that affect the cost of senior living services. This is an edited transcript of their conversation.

Len Fishman: There are a lot of variables in calculating the cost of assisted living, from the size and type of accommodations to the services required for residents. But, roughly speaking,  what does it cost to reside at a Benchmark community today?

 

Tom Grape: Compared to other alternatives, assisted living remains far more affordable unless you’re going to qualify for Medicaid. In Massachusetts, market-rate assisted living can range from a studio apartment starting at $2,500 to $3,000 a month, including typically three meals a day, housekeeping, laundry, transportation, activities, and some modest amount of personal care. And then a studio might be $3500 a month at the higher end with that same basic level of services. A one bedroom might range from $3000 to $4000 roughly, and then a two bedroom might go from $4000 to $6000. Those are starting points.

LF: What about additional services residents may need?

TG: Almost every provider in Massachusetts will assess each resident before they move in and will do periodic reassessments. So, for example, if they fall or have a medical change in their condition, the community will reassess their condition. If it determines that they will require more care, then they will assess an additional charge for that higher level of care. You also might be charged additionally for how much intervention is required to manage your medications. Communities do it in different ways but almost all I’m aware of will charge extra for those extra services.

LF: Memory support is a level of care where obviously you’re dealing with a much greater need for personal care services. What would that cost?

TG: Memory care is definitely more expensive than the numbers I’ve quoted because the starting point level of service is definitely higher. So those would typically start at $5,000 a month and could go up to $9,000 a month depending on, again, the level of care, supervision, and assistance required.

LF: From a provider’s point of view, what are the economics behind those rates? What does it take to run a community?

TG: It goes like this: For every dollar of revenue we take in, approximately 70 percent goes to covering operating expenses. That’s staff primarily, utilities, insurance, food, those kinds of things. Approximately 20 cents of that dollar will go to cover the costs of the building, debt service. And 10 cents, if you’re a for-profit provider, might go to profits. If you’re a non-profit provider, that might build reserves.

LF: So how does your new community in North Attleboro alter that equation and try to make assisted living more affordable?

TG: The fundamental challenge is that the building will do part of it, and that’s what we’ve addressed at The Branches. But it doesn’t address the real need, which is some form of [financial] help on the service side. Still, we said let’s do what we can with the building. We reduced the size by about 35 percent from a normal, traditional assisted living building. And we chose to do that by not substantially changing the common areas, but by reducing the size of the apartments. In North Attleboro, we offered all “companion-living” apartments. There isn’t the array of apartment options that we have in our other market-rate assisted living communities that would include a private one-bedroom apartment or a private two-bedroom.

LF: What does companion-living look like?

TG: When you walk into any of the apartments, there’s a very small common area in the middle, which has a kitchenette and a little seating area, perhaps for a shared dining table or something, and then on either side is a studio apartment, each with their own private bathroom.

LF: Were there any other construction elements that helped keep expenses down at this community?

TG: We chose a more moderate-income community to build it in, North Attleboro We were also able to do it on a single story, which allowed us to do it as stick-built construction. We haven’t done a stick-built building in a number of years.

LF: So how did all that affect the rent at Branches?

 TG: That, along with some changes to the program, allowed us to reduce rents by 20 to 25 percent compared to traditional assisted living buildings. So it’s not enough to get to low-income folks but it is a meaningful difference. The charges are $3,000 to $3,700 a month, depending on the configuration of units.

LF: The Branches opened last November. What has been the response so far?

TG: We’re well ahead of our projections. We’re obviously interested in the notion of offering all companion units and how that would be received. We have companion units in a number of our buildings, so this is not a new concept, but we’ve actually built activity programming around it. When we’re meeting with folks about The Branches, we talk about the benefits of companion living – as opposed to, “Well, we have no other apartment, we have this companion unit,” which is sometimes how others sell their companion units. Here, it’s actually a feature we’re selling.

LF: So you’re almost reframing it as a kind of buddy system?

TG: Yes, and people have responded to that with great enthusiasm. Again, we built it into our activities programming. The move-in process is all about the buddying-up process. So it’s not an after-thought or a compromise. It’s a central element to what The Branches is and people have loved it. It’s the socialization aspect of the companion units.

LF: You elected not to reduce the common areas in any appreciable way at The Branches. Why was that?

TG: Our view was that because the units are going to be smaller and we’re selling the socialization aspect, we wanted people to have sufficient common area to socialize. We wanted people to get out and have plenty of activity space, courtyards, game rooms. We thought that was consistent with the notion we’re advocating here. It’s not just about the lower price, it is about the socialization aspect of companion living. So common areas were in fact central to that.

LF: Do you expect to build more communities based on The Branches or how might the design evolve?

 TG: We do imagine doing more of these. We are still doing research about what’s happening at The Branches to learn from it. But the response has been so great that we are expecting to do a few more. One thought that we’re entertaining is not necessarily having 100 percent companion units, but having a little bit more of a choice. There are some other tweaks we’ll do but I think that’s the big issue. And yet we want to stick with the principle notion of this, which was socialization and companionship. So we’re not going to go against that.

LF: Are there other approaches to affordability you think would be helpful? One obvious question is whether you would like to see Medicaid covering assisted living in Massachusetts the way it does in some other states?

TG: Medicaid does cover assisted living only to a limited degree through the Group Adult Foster Care program. The problem is the reimbursement rate hasn’t changed since 1994.

LF: In some other states, there was a move to adopt what was overtly called the “nursing home substitute model” of assisted living that allowed for a level of care that could go as high as the nursing home level. That’s not possible in Massachusetts because we have adopted one of the more restrictive regulatory regimes that prohibit the provision of health care services in assisted living. Would you like to see a change in that regulatory regime?

TG: The regulatory structure in Massachusetts doesn’t allow assisted living communities to be assisted living communities, forget substitute nursing homes. We have the most restrictive regulatory structure of any state in the country. No other state in the country does not allow nurses to be nurses in assisted living communities.

LF: Let’s go to the example you gave of somebody who no longer can self-administer medication. How does the situation in Massachusetts differ from that in other states you’re in?

TG: Well our RNs – fully trained RNs who may have an evening job in a hospital emergency room – when they’re under the employment of an assisted living community are not allowed to administer shots. So if you’re a diabetic living in an assisted living community, the fully qualified RN is not allowed to administer a shot or put an eye drop in or do basic things like that. Residents have to call a home health agency or have some other arrangements made. That’s just outrageous.

LF: How did that happen?

 TG: I think it comes down to in the early days when assisted living legislation was being passed. There was a negotiation with the nursing home industry and a way to have this be passed with their support was to limit some of these skilled services. That was fine in the early days of assisted living, when the acuity of the folks we served was much lighter. As we know, the acuity throughout the health care continuum has increased dramatically in the succeeding twenty-plus years.

LF: What’s the effect on consumers, what’s the effect on people who live in assisted living and their families?

TG: It absolutely makes it more expensive and less convenient and potentially poses health risks. Families move in with the expectation that mom or dad will be able to get all of their care needs met in this assisted living community. They move in only to find, whether the need existed at the time they moved in or whether mom or dad becomes diabetic or whatever a year later, that in fact we can’t meet that need. That you have to now arrange for a home health care agency to come in and provide for these services that seem so basic.