For many senior housing providers, moving into home care seems like a natural progression, and for good reason.
Home health care presents a valuable opportunity for operators to expand their services and access new revenue streams. But as the old adage reminds us, it's usually the second mouse that gets the cheese. In other words, some operators are learning the hard way that home care may be a concept ahead of its time.
Consider Atria Senior Living's recent decision to close its New York-based home care subsidiary. Originally launched to increase synergy and support between the Capital Region's 30 assisted living communities, the home care division ultimately fell short of expectations.
This retreat may be more of a strategic retreat than a failure. The company appears to be mitigating risk by building on its strengths as one of the largest senior housing portfolios in the U.S. and Canada.
Still, this development may serve as a warning.
In general, growth often requires expansion. But it can also lead to overextension, especially when it concerns an area like home health care, which has its own set of problems. The complexity of reimbursement by Medicaid, Medicare, and private payers remains a major hurdle. Persistent problems such as fraud, staffing shortages, and concerns about quality of care have led some to liken home care to the Wild West.
This is not to say that home care is bad. In fact, for many operators, this is the logical next step. But Atria's experience highlights the importance of timing and careful execution.
We may be witnessing the early stages of what could be a robust model for older adults, but early entrants may be seriously hurt before the model is fully refined. faces considerable challenges.
In the meantime, some people may be wiser to let others take the risk. After all, cheese isn't going anywhere.
John O'Connor is editorial director of McKnight's Senior Living and its sister media brands, McKnight's Long-Term Care News, which focuses on skilled nursing, and McKnight's Home Care. Read more of his columns here.
