What Hospice Needs to Know About Today’s Senior Housing Market

August 17, 2023

When it comes to navigating a sound strategy for growth, hospice care and other healthcare providers are smart to seek out their most efficient pathway to success. That path will likely lead you inside the senior housing market.

NIC MAP Vision delivers actionable insight and market intelligence to both stakeholders in the senior housing industry and healthcare providers like you, including hospice agencies, long-term care pharmacies, rehabilitation services, primary care providers, and others.

In this article, we discuss the state of hospice care inside senior housing, the factors influencing both hospice providers and senior housing operators, and trends we hear from hospice leadership about their senior housing strategy.

A 30,000-Foot View of Hospice Care Inside Senior Housing

NIC MAP Vision hospice clients tell us that they feel enormous pressure to expand and grow in the midst of inexorable demand for services impacted by serious operational constraints:

  • Great gains in hospice care need – The hospice market is projected to double in size by 2030 as more and more patients age into hospice utilization.
  • Still, hospice care is underutilized- Even though you’re riding this huge demographic tide, hospice remains underutilized by patients who could benefit. Too many enter hospice only in the very last days of their lives and some do not access the service at all despite your best efforts.
  • Well-capitalized investment partners drive market activity – The influx of aging boomers has attracted multitudes of investors in private equity, who have driven rapid consolidation in many markets, seeking economies of scale. This trend may have generated headlines recently, but over a decade’s time from 2011 to 2019, the private equity ownership of hospices has doubled, adding investor growth pressure to market dynamics.
  • The workforce is stretched to the max – Healthcare providers and senior housing operators alike continue to face serious labor limitations, despite available nudges from outside investors and other growth opportunities. Clinical and non-clinical staff are short-handed at most organizations, most of the time, which is impacting patient care. For example, in January 2022, the referral rejection rate to hospice from acute care was 41%, about 13% higher than pre-pandemic levels, according to care management software company CarePort.

How can you manage these challenges and pursue smart growth for your organization? At NIC MAP Vision, we recommend that our hospice clients tighten their focus on their most efficient growth pathways. For you, that path could likely run through the senior housing market.

Meeting More Patients Where They Are

Hospice and senior housing are time-tested collaborative partners, serving a shared patient population in a setting designed for their care and comfort. Senior housing settings include a concentrated portion of the population likely to be admitted to hospice.

We know that hospice providers derive operational benefits from a co-located patient population where essential caregiving functions are provided by a professional staff rather than an often-overwhelmed family. We also know that this care setting doubles as a referral pathway. Senior housing leadership and staff are often called on to recommend appropriate, high-quality hospice care for their residents.

A hospice provider can foster a win-win relationship with a senior housing community. The community relies on hospice to provide a “best of care experience” for residents and families. With their understanding of how to align with that location’s clinical operations, hospice earns the opportunity to care for a meaningful volume of patients.

When considering other referral segments, senior housing is among the most direct and probably the most timely for hospice. Even a perfectly managed referral relationship with a single primary care provider is still going to deliver one patient at a time with the added complexity of varied care settings. A perfectly managed acute care referral relationship depends on a multitude of stakeholders defining patient eligibility from different clinical divisions within the hospital to complete the referral.

Senior residential care is:

  • uniquely wrapped around patients over months or years,
  • already partnered with patients’ families,
  • and deeply familiar with your services prior to patient needs.

At NIC MAP Vision, all of our hospice clients understand the importance of senior housing as a segment that can power their growth with an efficient service model. As a result, our recommendation is for your hospice organization to develop close partnerships with senior housing operators for the benefit of all eligible patients.

Focus Strategy to Match the Full Opportunity in Senior Housing

If you break down the overall senior housing market into its community and building types, you can move toward a more nuanced understanding of the communities that offer the very best fit for your unique value proposition.

According to NIC MAP Vision data, of the communities that serve age-restricted resident populations:

  • 21% Independent Living
  • 25% Assisted Living
  • 8% Memory Care
  • 43% Nursing Care
  • 2% Active Adult

From this data, we can predict the variable impact on your hospice business. For instance, assisted living is a particularly good fit because a typical hospice length of stay is about 40% longer for those residents. Caring for more patients in assisted living is associated with a significant improvement in hospice margins. Of course, we encourage our hospice clients to evaluate all senior housing categories, especially if they are interested in cultivating pre-need relationships with residents.

Another aspect of a focused hospice growth strategy is to secure a partnership with a senior housing operator as a preferred partner and referral source before another hospice provider does it first. Currently, this is a winner-take-most, rapidly consolidating market. According to NIC MAP Vision data, hospice and home health are among the most-consolidated services, with 60% of senior housing buildings seeing a majority of resident care reimbursement for hospice going to a single provider. Don’t leave yourself on the sidelines, secure preferred partnership status with senior housing to leverage your share of the market.

Value-Based Care May Unlock New Opportunity

The introduction of value-based payment innovation into hospice has the potential to unlock new gains for all parties. NIC MAP Vision’s position in the market allows us to comment with confidence on the forces that are changing your patients’ plan enrollment and how that impacts your senior housing partners.

Right now, Medicare Advantage enrollment is nearly at par with traditional Medicare. Approximately 10% of Medicare decedents resided in senior housing at the end of their lives.

The Centers for Medicare & Medicaid Services (CMS) is hoping to improve access to hospice care without creating an unfunded mandate for care across a huge population. We believe there is an opportunity for hospice providers to participate in defining the scope of benefit for innovative Medicare Advantage plans.

Hospice providers are uniquely qualified to guide end-of-life care in support of the patient’s goals. Hospice also helps to reduce hospitalizations and high-intensity care while providing an improved patient and family experience. Because there is a clear value of hospice care for patients, the determining factors are whether the risk or reward sharing makes sense for hospice providers, if the shared goals can be defined, and how to work through the details of contracting and network design.

How can you synthesize your knowledge of the complex senior housing landscape and your strengths into a no-regrets, achievable, optimistic growth strategy ? Here are three actionable takeaways to aim you towards robust growth:

1) Understand each senior housing community you want to partner with. Do the work of answering comprehensive questions about each community at the single building level for a deeper understanding of each community.

2) Discover as much as you can about the residents of those communities. You can actually know the health status and plan enrollment of the entire population of each community ahead of time and evaluate multiple populations in aggregate as you grow.

3) Prepare to win in a competitive market. Know the other players in this competition and understand how to spot the many opportunities in the market today, even in a crowded field of incumbent relationships.


Ready to Try NIC MAP Vision for Healthcare Yourself?

NIC MAP Vision for Healthcare delivers high-impact market intelligence to care providers who serve residents of senior housing communities. We help providers make smarter, faster strategic decisions about where and how to grow; then accelerate the execution of their strategy.

Our unique datasets offer unparalleled insights about senior housing communities, their operators, and their residents, combined with novel data showing existing healthcare needs and utilization inside each community. Schedule a demo with one of our product experts today.

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