A 16-member cabinet of LeadingAge Virginia members and sponsors spent the last 2 years imagining a new housing model that could meet the needs of middle-income older adults who either can’t afford or aren’t interested in moving to a life plan community (LPC).

A “playbook” that describes the model and offers a variety of implementation tools will be released this fall.

“We know that people of means have options, and we know people who receive subsidies have access to affordable housing, although the wait lists are very long,” says Melissa Andrews, president and CEO of LeadingAge Virginia. “But the largest portion of the baby boomer demographic are people who either haven’t been able to save for retirement, or maybe they have saved but they don’t want to put a large deposit down on a retirement community. They want a different option.”

Details of the Middle-Market Model

The “different option” recommended by the LeadingAge Virginia cabinet would take place in an independent living setting with supports. It would not offer the full continuum associated with traditional LPCs.

Instead of an entrance fee, residents would pay an average monthly rent of $2,550 for their apartments, and could take advantage of supports managed by 2 onsite staff members:

• An activities assistant, who would organize community activities and programs in collaboration with local partners.
• A care manager, who would help residents connect with community-based services and supports.

Andrews describes the care manager as “jack of all trades” who would be familiar with available resources in the local community and would coordinate a variety of supports for residents, including in-home services and home health care. No assisted living or nursing home care would be available onsite.

Partnerships would be the key to the success of the middle-market model. For example, 2 or more providers might come together as partners to sponsor a middle-market development. In addition, providers offering the model would have to forge partnerships with other nonprofit providers to make sure high-level health services, like nursing home care, were available in another location if and when residents needed them.

Finally, coordination of services and activity programs would depend on robust partnerships with local service providers and organizations like fitness centers or universities. Community-based resources would supplement the services and amenities that an existing life plan community might provide to residents of its middle-market development.

“The model is all about leveraging what is going on in the external community and what’s available in the internal community,” says Andrews.

A Difficult Decision about the Continuum

The middle-market cabinet included 7 LPC providers, 1 non-LPC provider, and a variety of LeadingAge Virginia sponsors representing the fields of banking, law, architecture, accounting, marketing, and construction management.

“We knew that in order to really flesh this out, we were going to need a whole bunch of different perspectives at the table,” says Andrews.

That diversity of perspectives added depth to cabinet discussions, but also made it challenging for the cabinet to come to a consensus on an ideal housing product for the middle market, says Andrews.

The first choice of many cabinet members was to simply create a more affordable life plan community for the middle market. That middle-market LPC model is currently being offered by several large, multisite organizations, including Presbyterian Homes of Minnesota and National Church Residences. However, after much debate, the cabinet concluded that the absence of economies of scale would make the middle-market LPC model very difficult for single-site LPCs to develop.

Stepping away from the traditional LPC model was difficult for a number of cabinet members, says Andrews.

“It really is a matter of mission,” she says. “If you have come of age working in life plan communities where people live in the community until they die, it is really hard to say that at some point people might have to move out.”

Yet, cabinet members felt strongly that serving the middle market, even without the full continuum, is also part of their core mission to care for less affluent elders.

“What group members had to get their head around is that there is value in support-enhanced independent living for the middle market, just as there is value for support-enhanced independent living for affordable housing,” says Andrews. “It took a while for us to come to the realization that we could not make the numbers work if we tried to build a continuum. We just couldn’t.”

The Middle-Market Playbook

Once the cabinet reached a basic agreement on the support-enhanced model, members began identifying construction and financing costs for 100-, 125-, and 150-unit projects, developing architectural renderings for a generic middle-market community, and identifying potential partners that providers could enlist to help operationalize the model. All of these components will be included in the LeadingAge Virginia playbook.

The playbook will also contain a list of 12 Governance and Management Questions that leadership teams and boards should discuss when making a decision about whether to proceed with a middle-market offering. Among those questions:

• Does serving a middle market customer fit within the organization’s core competency?
• Are we willing to partner with other providers for delivery of services?
• What levels of living and services are required for our organization to feel comfortable in serving the middle market?

“I think if I were giving advice to members it would be to start with our 12 questions.” says Andrews. “They are the starting point for our playbook.”

Long-Term Goals

Andrews would love to have providers use the LeadingAge Virginia playbook to develop a middle-market product. She’d also be happy if providers used the Governance and Management Questions to chart their future course of action, even if they decided to pass on the middle-market model.

But even without these “wins,” says Andrews, the cabinet’s benefit to LeadingAge Virginia is already clear. Several cabinet members are planning future partnerships and collaborations with one another, she says. And, most important, cabinet members have become more invested in LeadingAge Virginia.

“I think the fact that we have created a place where it is okay to speak the truth is huge for the association’s culture,” says Andrews. “We need to be able to push back on each other and to see where it goes. People’s passion’s really came through. That was the most exciting part of the cabinet’s work.”