In the age of the electric vehicle, the senior living industry is akin to a 1987 Buick – at least when it comes to public perception, according to HumanGood CEO John Cochrane.
Cochrane’s point is that on the cusp of 2025, senior living operators still have more work to do to turn around the public stigma that the industry carries. Not only does it hurt the industry’s ability to attract new residents, it also complicates operators’ hiring practices. And new scrutiny from both the public at large and lawmakers is making that job ever-harder.
“Perception is in some respects, probably our biggest barrier,” Cochrane told Senior Housing News.
That said, Cochrane – a self-described optimist – also sees that industry has some real horsepower under the hood. He believes that demand in the years to come will no doubt buoy operations and help fill senior living units across the country. And the industry has leaders with decades of experience under their belts that will help bring it into its next chapter with regard to operations and technology, he said.
HumanGood also has reasons to be optimistic at the tail-end of 2024. The Duarte, California-based organization this year “closed out the strongest year we’ve had” due to higher occupancy and operating margins than in the past. The organization’s net promoter score and staff satisfaction measures are also up over the past.
“To finally feel like we’ve turned a corner and to see that reflected across all manner of assessments and numbers is really encouraging,” Cochrane told Senior Housing News. “We’re closing out a strong ‘24, and people are already planning and looking forward to a really strong ‘25.”
HumanGood’s portfolio currently consists of 23 life plan communities and 105 affordable communities, with several that are under development. The organization serves around 15,000 residents with more than 5,000 team members.
Tech, value-based care bringing ‘golden age’ for senior living
Some senior living leaders have seen the rise of a senior living “renaissance period” this year – to Cochrane, it’s a “golden age.”
He pointed to the demographic upside ahead for the industry, wherein millions of baby boomers will continue to reach the average age of moving into a senior living community each year through the next decade.
Big trends such as new healthcare technology and value-based care are also reshaping the industry and making senior living services better for older adults. With new payment plans and technology, older adults can now access and pay for care they potentially could not just five or six years ago.
“We have to find a different path forward, and value-based care is going to be foundational to that path forward,” Cochrane said.
To that end, HumanGood earlier this year joined the Perennial Consortium, a group of senior living operators that all collaborate on value-based care. Last year, the organization also hired Phil Chuang, former leader at Kaiser Permanente, as senior vice president of healthcare.
“Who are the additional partners? How do we play? Where do we play? What risk do we take? How do we partner? We’re going to be sorting that out,” Cochrane said.
HumanGood will continue to focus on affordable and value-based care for residents. Cochrane said the “sick care” system – one where residents seek care only when they feel ill – is “unsustainable” in the long run.
‘Moving from a sick care system to a managed well care system, where we actually keep people healthy … that’s really what we’re trying to do at HumanGood,” Cochrane said.
Looking ahead, HumanGood is experimenting with new ways to improve its tech and processes, including by potentially competing for the XPRIZE for healthspan. The organization’s board also recently approved a new refresh of the company’s tech fund, which invests in new capabilities meant to aid the organization’s operations.
“We’re actually looking at funding a startup think tank where we can actually incubate new companies and work with early stage entrepreneurs to fill gaps that we think are otherwise not being met in the field,” he said. “We’re also looking at raising a significantly larger fund with different partners to grow our influence and reach for those innovation efforts.”
Though Cochrane is plenty optimistic about the road ahead for HumanGood and other operators, he also believes that the current period carries some lofty challenges for companies that are not currently doing well.
“If you can’t make hay out of these demographics, in these times, in this economy, you really are pretty much hopeless,” he said. “The strong players are moving forward, and I think the weak players, frankly, are going to get weeded out at an accelerating clip. That’s good for the field and consumers, ultimately.”
Inside HumanGood’s strong year
Part of Cochrane’s optimistic view of the road ahead is informed by HumanGood’s strong results in 2024.
Occupancy for the organization’s life plan communities currently sits around 93%, with some communities currently sitting at record occupancy levels. Operating margins at the company’s life plan communities – which includes entry fees – were 70% higher than the operator expected in the first three quarters of the year.
The company has been able to enact rate increases without much pushback from residents thanks to transparency regarding expenses, Cochrane said. As it stands in 2024, the organization’s Net Promoter Score sits at 64 on a scale between minus-100 and 100 – a good result compared to not only the senior living industry but compared to others as well.
HumanGood’s staff satisfaction survey also had a 88% participation rate with an 83% engagement score across all team members in the organization, which Cochrane said reflected a positive sentiment from its workers.
HumanGood has shifted its staffing strategy to build up employees and promote from within instead of focusing on outside recruitment. That process is aided through a program called HumanGoodU, which helps leaders develop and hone skills they need to move up the ladder.
Additionally, a partnership with the University of Arizona allows team members to seek an undergraduate degree at no cost to themselves, along with scholarship and additional “learning opportunities.”
Cochrane said those programs have helped HumanGood reduce turnover within an employee’s first 90 days.
“I think that people responded really well to opportunities to improve where they are, find new opportunities, grow new skills and acquire educational opportunities they otherwise might not have had access to,” Cochrane said.
However, he said while the company’s current employee retention is relatively good, , there’s still more that can be done.
“We’re just getting started,” he said. “There’s more that team members are hungry for, and I think those programs are going to be key to managing a workforce that is going to continue to be under pressure for, frankly, the next decade. I think it just shows that when you do the right things for the right reasons, you get the right results.”
HumanGood has grown over the last year through new-development and affordable housing projects. The organization is always seeking potential new opportunities for growth through affiliations, particularly among life plan community operators. The organization is also open to new development in the new year if opportunities make sense.
A recent shift in the nonprofit dynamic of senior living in recent years has been affiliating from a position of strength, Cochrane said.
“One of the dynamics that I’ve seen is an increasing awareness in the field of the need for scale, to compete, to bring resources, to bring programming and brand awareness,” he said. “Where I see that changing is just in the last 12 months, we’ve had significant outreach opportunities, exploring affiliations that are coming from strength and opportunity, not from desperation and problem solving.”
Cochrane said he has firsthand experience with smaller organizations that are doing well operationally but are somewhat resource constrained, limiting their growth, and the affiliation opportunity would allow them to grow in influence, reach and mission.
In 2025, Cochrane believes the senior living industry will continue to grow and evolve for its current resident base. Beyond that, he sees a bigger opportunity – and challenge – to expand those options to even more residents and price points.
“How do we take what we developed over here, serving this much of the population, and blow it up and reach the 90% that we’re not talking to today?” he said. “I think that’s one of the bigger challenges, as well as the opportunity.”