Find hidden opportunities in home health services

On-site physicians and home care-like services can unlock hidden NOI

By Jacquelyn Kung

“No!” Or: “Not now!” This is likely the response you get if you were to ask your parents or your spouse if they want to move to a retirement community soon. 

It’s no wonder that seniors housing operators fear the home as the industry’s biggest competitor. 

Access to at-home physicians, nurses, and other services at home make it easier to age in place. Moreover, expect Medicare Advantage enrollment to continue to climb, further fueling this competition in home health services for seniors.

While at-home healthcare services may seem like a threat, many communities have shifted the paradigm to instead make it a lucrative opportunity. Increased occupancy is a benefit, and any revenues generated on a consistent basis can be capitalized. Both practices increase the valuation of a property.

Executing this proposition requires focus, but is relatively straightforward once you understand the options.

Overview of home health

Tapping into opportunities requires an understanding of the types of healthcare and ancillary services.

Physicians: Having primary care on site is very attractive to seniors. Specialists such as podiatrists, audiologists and dentists also rank highly. Increasingly, tele-doctors are an option: Harvard Medical School is studying virtual ER physician visits in independent living.

Home health: This service is largely reimbursed by Medicare, covering nursing and therapy. Enhanced nursing care in assisted living is a non-reimbursed variant.

Home care: Having non-medical help with showering, eating and other activities of daily living (ADLs) is referred to as non-medical home care, private duty or long-term care. One in three of us will need these services in our lifetime. Along with dementia, losing ADL independence is one of the biggest reasons families move a loved one into assisted living.

Transportation, social services and activities: Together, these three services are also referred to as social determinants of healthcare. Practically, having a reliable ride to appointments or other outing, along with coordination of health, food, financial and other needs, highlights the difference between aging in place and a hospitalization.

Potential benefits to seniors housing

Examples from across the United States illustrate how properties turn these at-home services into tangible net operating income (NOI) value. 

First, many communities start these services on site to grow revenues, as well as to avert liabilities. For instance, for every 40 to 50 residents who receive non-medical home care from a well-run home care team, revenues are $1 million. More significantly, the liability of having unknown (and possibly untrained) aides and attendants on campus is greatly mitigated.

Secondly, decreasing resident turnover also contributes to a community’s finances. The primary reason for move-outs in both independent and assisted living is not death or financial issues, but medical reasons. Increasing the average length of stay is not only possible but profitable. Specifically, it decreases marketing expenses and bolsters occupancy.

The last set of benefits includes more profitable acquisition costs, an idea that is widely cited but without data. Erickson cites a lift in sales interest due to its on-site physicians. Continuing care retirement communities (CCRCs) often promote the marketing benefits to their namesake communities.

In addition, early sites have debunked the rumor of cannibalization of potential resident move-ins. While it happens, the gains seem to outweigh losses, as cannibalization is not as high as expected.

Recommendations for operators 

Overall, consider offering a relevant set of at-home services for your residents. Then evaluate if occupancy lift is needed, and possibly offer a set of services for non-residents. Specifically, let’s address each area:

Physicians: If you do not operate with a full healthcare strategy, I usually do not recommend starting on-site physician services. It works at Erickson because physician clinics are a loss leader for the rest of its healthcare continuum. For most communities, the simplest approach is to offer a small office for a local physician to take appointments. 

Alternatively, Redwood Capital Partners works with operators such as Juniper Communities to rent out space on campus for physicians. This model works because in addition to usual Medicare fees, operators also bill under new CMS codes. To offer more medical coverage, Attuned Care and Signature Healthcare offer a Medicare Advantage plan and solution set.

Home health: Due to the decreasing reimbursement levels in Medicare and post-acute home health, I do not suggest starting this service on campus. Instead, the opportunity here is to partner with a local provider and market your localized network to health systems and hospitals. When comparing home health partners, ask for quality scores and streamline your referrals in exchange for a weekly debrief of residents.

Home care: Most immediately, operators can start or grow their own non-medical home care agency. By consolidating the referrals to outside agencies, market-rate independent living facilities should be able to yield a census of 25 to 35 percent of total residents. In a 125- to 150-unit facility with usual double occupancy rates, this should translate into over $1 million in additional revenues, as well as averted liabilities from unknown aides coming to your campus. A national chain just completed a pilot and is now rolling out non-medical home care at hundreds of its sites. 

Transportation, social services and activities: Some operators with extra capacity and a willing resident population may also branch “beyond the gates.” For instance, one Midwest CCRC invites non-
residents to join a fee-based lunch club with on-site gym access. A West Coast assisted living facility offers transportation services to non-
residents at $75 per hour and staffs the car with a friendly, college-educated driver paid $20 to $25 an hour. High contribution margin revenues aside, both communities reported a lift in positive brand awareness with much lower-than-expected cannibalization of potential move-ins.

While your initial instinct may be to fend off competition from home healthcare and services providers, many communities have found opportunities and adopted strategies to benefit financially from this hidden opportunity.


Dr. Jacquelyn Kung is a senior living expert, entrepreneur, consultant, and book author. She was part of the senior management team at Erickson Living, worked on the healthcare team at McKinsey, and has started two companies serving seniors at home. Her doctorate is from Johns Hopkins University and her MBA is from Harvard University. She may be reached at

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