NIC Notes

Insights in Seniors Housing & Care


By: Bob Kramer  |  October 18, 2022

Six Key Drivers Shaping the Future of Senior Living: Key Driver #5

Business Environment  |  Ideas and Discussion  |  Market Trends  |  Senior Housing  |  Six Key Drivers  |  medicare

The Increasing Importance of Data and Analytics

NIC Co-Founder and Strategic Advisor Robert Kramer has identified “Six Key Drivers” that will shape the senior living industry over the next 10 years. Kramer is also Founder & Fellow at Nexus Insights, a think tank advancing the well-being of older adults through innovative models of housing, community and healthcare. NIC Notes is publishing a series detailing each key driver. View the first four installments of the "Six Key Drivers" blog series. What follows is an analysis of the fifth key driver: The Increasing Importance of Data and Analytics.

bob headshot-1Data and analytics are revolutionizing senior living. These critical tools, and the technology that enables them, are vital to manage information and drive better business decisions and resident outcomes. But how?

The use of data and analytics allows us to customize our product to meet the needs and preferences of our customers and other stakeholders. It’s important to note that investments in technology are critical to the future success of both individual companies and our entire industry. Technology will be key in the challenge to stay competitive. Senior living providers need a tech platform to capture data and deploy predictive analytics to create customized solutions. It’s these customized solutions that will drive real value for investors, owners, operators and customers.

I have identified three areas of focus where data and analytics will profoundly impact our industry.

  • Data and analytics will drive the delivery of customized healthcare paths for the individual.
  • Data and analytics will drive customized business strategies, including the formation of essential partnerships as well as strategic growth plans by market.
  • Most importantly, data and analytics will drive a customized resident experience. We will be able to provide a superior product for residents, focused on the personalized experiences that make life worth living. We can turn senior living into what I describe as an “aspirational” setting. It can be a place where people prefer to live regardless of their age, mobility or cognitive condition, instead of a place they hope to avoid.

Let’s take a more detailed look at the three areas where data and analytics will shape the future of senior living.

  1. Data enables preventative, predictive and participatory healthcare.

    As we noted in key driver #4, healthcare is being reframed. We are slowly but surely shifting to a value-based care model that relies on data to produce better results at a lower cost. It starts with prevention and enhanced management of chronic conditions. The data we collect can be analyzed to help prevent and break the typical downward, and costly cycle of sick or injured residents who are sent to the emergency room or hospital, only to return to the community, and bounce back again to the urgent care setting. Data is required to prevent that cycle and avoid the flareup of chronic conditions that leads to acute care. But data alone is not enough. Data coupled with predictive analytics or algorithms can identify potential risks for a particular resident. In short, data and predictive analytics together can provide a healthcare roadmap customized to the individual.

    A simple example is the burgeoning category of software products that use algorithms to predict when a person is at risk of a fall. We know that falls are one of the most expensive medical events suffered by frail elders that often start a downward health spiral. The CDC estimates that more than $50 billion is spent annually on medical costs related to falls among the elderly. New technology uses algorithms to marry resident data with data from hundreds of thousands of older adults to help spot problems and intervene before a fall takes place. For example, we may determine whether the person has osteoporosis, making a fall potentially more dangerous. We can also analyze the person’s habit patterns and their gait. Are they getting up more times during the night? Is it taking them longer to return to bed? A change may indicate the need for more checks. The result is fewer fall-related visits to the hospital and a better overall experience for the resident and the family.

    Resident participation is part of the solution. Self-monitoring can provide data to help prevent and predict health problems. For example, the Lively app from Best Buy available on the Apple Watch tracks the wearer's daily habits. It can send out an alert if the person falls. But instead of wearing a pendant that screams “elderly,” the resident has a smart watch that looks cool. Apple is in a race with other companies to provide the most sophisticated healthcare monitoring and predictive devices. These devices can check your heart rate, oxygen level, and blood pressure. Again, the data is worthless if it is simply collected. Algorithms, sophisticated machine learning, or artificial intelligence (AI) needs to process the data in real time. It doesn’t do any good if it takes four days to get an alert about the condition of a resident who by then has already fallen.

    New, game-changing data streams are also becoming available to the industry. NORC, a social research organization at the University of Chicago, in collaboration with NIC and NIC MAP Vision, has overlayed Medicare claims data with nine-digit zip code senior living property information. This allows us to pinpoint our resident populations by health status to determine chronic disease prevalence along with average healthcare spend in a building, and the average spend per resident. That provides the opportunity through NIC MAP Vision to get a complete, and anonymous, health profile of who lives in our buildings, how they compare to individuals in the wider market area as well as who are the top healthcare providers serving residents in our buildings. This kind of data is revolutionary to understand both who is in our buildings and who is providing healthcare services to them.

    Recent research by NORC shows that residents of senior housing settings average over 12 chronic medical conditions. More than half of all senior housing residents have a mental and behavioral health diagnosis. As NIC MAP Vision adds more data to its platform over the next year, we will be able to determine the prevalence of different chronic conditions among our residents. We can quickly find out whether the population in our building has a high or low Medicare spend, or a high rate of residents being sent to the hospital. The applications and implications for the future use of this kind of data is groundbreaking and will be transformative for the industry, which brings us to the second way that data and analytics will make a big difference in our industry.

  2. Data is critical for partnering, risk bearing and strategic decision-making.

    Healthcare data on building residents will be essential to form effective partnerships with payers and healthcare providers. Healthcare data can also be used to make strategic business decisions.

    Medicare Advantage plans and other healthcare dollar risk-bearers have an incentive to reduce spending, particularly among high-cost residents in assisted living, independent living and memory care. According to NORC research, senior housing residents have annual healthcare spending of about $20,000-$30,000, with residents spending $3,000-$4,000 in out-of-pocket costs. This level of spending reveals tremendous opportunity to reduce healthcare spending and improve quality of life among these residents.

    Whether by partnership with others or deciding to take on the healthcare dollar risk directly, senior living providers must have and understand this critical data about the residents in their buildings. Without it, senior living operators are at an enormous disadvantage in negotiating potential partnerships whether with Medicare Advantage plans or healthcare providers. And without this data, senior living operators are very unlikely to be rewarded for the contribution they are making to reduce the healthcare costs of their residents.

    Risk-bearing entities want to partner with operators who can provide insights into the health conditions and the healthcare spending profile of member residents. Not only is this data essential to potential partners, but the information also gives operators insight into where improvements can be made to enhance the quality of life of residents.

    Similarly, operators need data on the healthcare needs of residents to evaluate the feasibility of potential partnerships, especially in a risk-bearing arrangement. If you are in discussions to partner with a physician practice or a healthcare system, you need to understand the healthcare spending patterns of your population. Our industry has been focused on what people spend on rent and services. But we have never before had insight into what the government, and the resident themselves are paying for their healthcare. If we don’t have this data on hand, potential partners may not recognize the value we are bringing to the table. With healthcare data in hand, you can demonstrate your value to help manage healthcare spending. Senior living providers should be recognized as a partner to lower the healthcare spend and to help keep people healthy.

    As an example of how data can be used, NIC Analytics has issued a white paper and blog post that looks at the opportunities for senior living in chronic disease care. I urge you to read them. Perhaps an operator can partner with a chronic kidney disease care provider and offer on-site service in a way that is far more consumer friendly. Bear in mind, as we’ve discussed, the customer wants to get services where they live.

    New streams of data, coupled with analytics, can also improve our business strategies. How? In senior living, we’ve traditionally used data in terms of supply and demand to create market feasibility studies. How much supply is there in a particular market and what is the demand? How many people are over age 75 and what is their income? What is the prevalence of adult children and what is their income? How many buildings and units are in the markets, and what are the rental rates? But what other data might help us improve our feasibility studies? Here’s an example. NIC MAP Vision can provide the rate of Alzheimer’s disease and other dementias in the Medicare population in the top 30 largest MSAs in the country. Miami has the highest incidence at 8.3%. Portland, Oregon, has the lowest at 2.7%. This is pretty important to know if you are deciding where to locate a memory care building.

    A 2021 white paper published by NIC Analytics provides more information on dementia and how to utilize CMS Medicare data and NIC MAP Vision supply data when evaluating local conditions. Another resource is NIC’s article "Access to Capital in the Nursing Home Industry"
    on utilizing dementia Medicare data for more informed underwriting.

  3. Data is critically important for the purpose of engagement matchmaking.

    Data can be used to engage residents and match them with experiences that give them a sense of purpose, belonging and connection. If we’re going to avoid the medicalization of private pay senior living, it won’t be because we have medical history data and know how to use it. Rather, it will be because we have what I call “life data” or “life values data” and know how to use it to create an engaging environment for our new customers.

    Senior living is very good at asking certain questions, but we overlook the most important questions. We are good at finding out the person’s need for help with the activities of daily living, or the instrumental activities of daily living such as balancing a check book. We are good at finding out how many prescriptions people take, and the over-the-counter medications they use. And we are especially good at understanding the resident’s ability to pay and for how long.

    But none of this information defines the identity of a person. In fact, every person resists being identified by those markers. We are not asking the questions that matter most to the individual and their quality of life. Most people in assisted living are moving in with us for the last two to three years of their lives. The key questions that we should be asking relate to what is most important for the person to be able to experience in the remaining time they have left. That should drive how we think about the resident, instead of coming up with a game plan based on the fact that they have 18 prescriptions, and 10 chronic conditions. What is important to the person? Maybe she wants to see her grandchild walk across the stage at college graduation. Or maybe he wants to live long enough to meet his first grandchild. We should be asking what moments in life have given you the most sense of joy? What is something new you would like to learn? What gifts, interest or talent would you like to contribute to this community? It all comes back to what matters to the residents, what’s most important to them.

    For example, Lifespark, a complete senior health company in the Twin Cities is a pioneer in whole person senior care, focused on helping people build a pathway to live their best life. Lifespark has created an Electronic Life Record (ELR) that uses artificial intelligence (AI), machine learning, and proprietary algorithms to capture not just typical medical inputs, but also thousands of additional data points that can be highly predictive for recommending not only the best care solution but also the best way to engage an older adult and enhance their experience of daily life.

    Another example: The John A. Hartford Foundation funded the Age-Friendly Health Systems initiative in partnership with the Institute for Healthcare Improvement, the American Hospital Association and the Catholic Health Association, which is now in over 2,800 care locations nationally and internationally. The goal is to help spread the reliable delivery of age-friendly care—based on the 4Ms framework (what Matters, Medication, Mentation, Mobility)—to all health care settings. The Foundation has also provided a grant to the Age-Friendly Institute, based in Boston. It operates which features user reviews and expert advice for older adults on where to live, work and get care. The consumer reviews are akin to Yelp for care of older adults.

    So, what do we do with the life data we collect? It can be used to customize the resident experience which is how our industry will thrive in the next decade. Let’s look at several other sectors that are way ahead of us to see how they are customizing the consumer experience.

    The retail sector is a good example. My wife, Diane, was shopping online before the holiday rush for dolls for our granddaughters. But not just any dolls. Diane has very high standards for dolls and wanted unique, authentic dolls. She was checking her emails one morning and suddenly exclaimed, “How did they know?” I thought she’d been hacked until she said, “They sent me exactly what I’m looking for.” Diane had received emails from three doll manufacturers with just the kind of dolls she wanted. I said, “Diane, you have just been mass customized to have a personalized shopping experience.”

    There is a ton of data out there on us and our shopping habits. Someone put together an algorithm to find the kind of dolls that would interest Diane Kramer, who likes to holiday shop before Thanksgiving. The doll companies bought the data and knew early November was the right time to send Diane an email, so she had a super convenient shopping experience. It’s an example of how to take massive amounts of data and use it to create a customized consumer experience.

    Healthcare is another example. Heather Cox, the chief digital health and analytics officer at Humana gave a presentation at the Consumer Electronics Show (CES). She said that the next evolution of Humana would be to focus on leveraging analytics to drive new digital personalized experiences to extend care delivery to members when and how they need it. Her message: Differentiating on price isn’t the way to win on healthcare. Differentiating on experience will be.

    Humana is a huge player in the Medicare Advantage payer universe. Since Cox gave that speech Humana and United Health Group, another big payer, have been buying providers, physician practices and clinic-based settings, not expensive hospitals. Payers are seeking settings where their members can receive preventative care and assistance to manage chronic conditions to avoid the hospitals. In other words, the payer is becoming the payer and a provider, or a payvider. These big insurers are developing their own alternative care networks, and the missing piece by design is the acute care hospital.

    These examples raise a question for senior living providers. What personalized experiences that are metaphors for being alive will we offer our customer? Data and analytics will enable us and our partners not only to practice true preventative healthcare but most importantly to design opportunities for our residents to have the experiences they want most in the last years of their lives. This is a completely different approach from the activities director who runs herself ragged to schedule lots of activities to appeal to everyone. Or the activities director who takes a one-size-fits all approach and hopes people show up.

    We can’t create customized experiences if its up to the staff to figure out what each individual wants and then deliver a solution. That’s where a number of new companies are focusing on how to customize the experience to engage residents.

    Sentrics has developed an integrated suite of platforms to customize the resident experience from what she watches on television to specific activities. Continual feedback from the resident helps to tailor the experience.

    Connected Living is another example. At the center of the Connected Living ecosystem is an enterprise content management system with links to programs and services.

    Again, if we are going to be a place that people are attracted to rather than one to avoid, the key will be to provide personalized or customized experiences. But to do this, we have to be able to collect data and use it quickly to personalize preventative healthcare and also to engage our residents. Rather than being a place to disappear, we will be settings that are metaphors for being alive. It’s true that our customer may have chronic conditions and may only be given three years to live by the doctor. But she wants to feel alive and have experiences that are meaningful to her.

    This will be a challenge for senior living that has grown accustomed to marketing care to meet needs. But the reality is that people want to feel alive, and we have to figure out what makes them feel alive. We must reframe the aging experience and engage our customers. The smart use of data and analytics will help us meet that challenge.

Next up: Key Driver # 6: Moving from Siloed to Seamless. We will see a shift from the current fragmented, single-point healthcare solutions and technology applications to integrated longitudinal solutions that are setting, disease, and payer agnostic.

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About Bob Kramer

Bob Kramer is Co-founder, former CEO, and now Strategic Advisor at the National Investment Center for Seniors Housing & Care (NIC). Mr. Kramer is also Founder and Fellow at Nexus Insights, a think tank advancing the well-being of older adults through innovative models of housing, community and healthcare. He is broadly recognized as one of senior living’s most influential and high profile thought leaders and connectors. With over 35 years of industry leadership, he has earned the reputation of “agent provocateur” in the senior housing and care industry. He has been described as an “ice-cutter” and scout in identifying industries and trends that will disrupt the future of senior housing, aging services, and aging more broadly. In 1991, Mr. Kramer co-founded NIC to advance access and choice in senior housing and care by attracting capital to grow the sector. Under his leadership, NIC became the go-to resource for data and analytics for the rapidly expanding senior housing and care industry and an acknowledged thought leader for new ideas and trends impacting the provision of housing, services and care for older adults. Mr. Kramer stepped out of the CEO role in 2107 and continues to serve NIC as Strategic Advisor. In 2019, Mr. Kramer conceived of and championed “The Forgotten Middle,” a landmark study of the health and socioeconomic status of middle-income adults who will be 75+ in 2029 and their ability to afford private pay senior housing. The report on the study, published in Health Affairs, was the 5th most read article appearing in this leading health policy monthly journal in 2019. In April 2020, Mr. Kramer launched Nexus Insights to “rethink aging from every angle.” The organization engages a network of leading thinkers and thinking leaders to create and champion bold ideas and actionable models to catalyze the next generation of housing, community, health, and engagement for and with older adults. In March, he received the 2023 McKnight’s Pinnacle Career Achievement Award for his enduring contributions to the senior housing and long-term care field. A former county government official and Maryland state legislator, Mr. Kramer was a leader on health and environmental issues while representing the state capital of Annapolis in the 1980s. Mr. Kramer was educated at Harvard and Oxford Universities and holds a Master of Divinity degree from Westminster Theological Seminary.

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