lkc school of business singapore management university ... · 7/5/2013 · lkc school of business...
TRANSCRIPT
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LKC School of Business Singapore Management University
Dean Benedict Koh Director Centre for Silver Security
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Challenges and Opportunities in Setting Up Retirement
Villages in Asia David P Collins
Managing Partner
Active Living international
5 July 2013
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U.S. Experience
• Communities cost about $25 million
• 70-100 units
• 2-3 years to open
• 1.3 years to full occupancy
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Need Driven Sectors
• Higher acuity assisted living
• Memory care
• Less dependent upon home sales
• Less able to defer the decision
• Increases in revenues scale with care dependencies
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New Communities are Built Based on
• Age Demographics such as an aging parent and their children and grandchildren
• Economic factors encouraging developer investment
• Density of existing supply
• Availability of land on long term lease
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Community Amenities • Scheduled transportation • Emergency
communication system • Housekeeping and
laundry • Main Lobby/ Reception • Dining Options • Billiards/ Games • Indoor Pool • Fitness Center • Yoga Studio • Spa
• Card Room • Resident Services • Computer Lab • Mahjong • Mail Room • Movie Theater • Library • Multi-Purpose/ Ballroom • Crafts • Physical Therapy • Lawn bowls
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Health and Wellness Amenities
• Blood Pressure Checks
• Annual Flu Shots
• Weight Monitoring
• Assessment as Needed
• Dietary Guidance
• Water Aerobics
• Individualized care services
• Pilates
• Tai Chi
• Yoga
• Strength Training
• Meditation
• Health Lectures
• Wellness Information and Advice
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Add Value
• Base rent
• Community fees
• Care fees
• Services for scheduled needs
• Services for unscheduled needs
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Continuing Care Retirement Communities
• A CCRC is a life care community. When a need arises, residents have access to a full continuum of health and medical care, on-site rehabilitation services, memory care support, skilled nursing care, and assisted living.
• With life care benefits, monthly fees remain predictable.
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Universal Design • Space to place objects • Accessible appliances • Drawer pulls, not knobs • Wheelchair turning radius
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Accessibility requirements equal larger bathrooms Larger bathrooms require additional lighting over shower and bath
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CCRC Segovia
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Where Does the Money Come From?
• Insurance
• Pensions
• Savings
• Government plans
• Sale of Real Estate
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Payment Methods
Entrance Fee
Refundable Portion
Amortized Portion
Monthly Fee
100% Plan
$349,500
$349,500
--
$4,430
50% Plan
$349,500
$174,750
$174,750
$3,323
0% Plan
$349,500
--
$349,500
$2,437
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Without the Amortized Entrance Fee
Style Square Meters Monthly Fees in U.S.dollars
Studio 49 $3,700
1 Bed/ 1 Bath 83 $4,400
2 Bed/ 2 Bath 130 $6,500
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Segovia Floor Plan
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Retirement Community Freemont, California
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2012 Annual Rate U.S.D.
Semi-Private Room
$81,030
Private Room
$90,520
Assisted Living
Communities
$42,600
Home Health Aide
$21,840
Home Maker $20,800
Adult Daily Services
$18,200
Nursing Homes
Home Care
Assisted Living Communities
$42,600
Adult Day Services $18,200
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Expense Ratios U.S.
• 150 units
Benchmark cost of an average unit $132,000
Renting at $1,125 monthly
93% stabilized occupancy
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Operating Expenses Per Resident/Per Day
• Range from $42 to $63 for Independent Living
and $80 to $108 for Assisted Living
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Independent Living
• Expense Ratio
55 to 70 %
• Profit Margin
30 to 45 %
Assisted Living
• Expense Ratio
65 to 75 %
• Profit Margin
25 to 35 %
•Management fees range from 5 to 7% of revenue
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Annual Operating Expense
• 93% occupancy
• 140 units X 365 days
• 51,000 resident days X operating expense per resident per day
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Average Assisted Living Base Rate for Alzheimer’s and Dementia care
$4,807 Monthly
$57,684 Annually
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Method of Security for Alzheimer's/Dementia Care in Assisted Living Communities
Locked unit 78%
Unlocked, but doors arealarmed 11%
Residents wear monitors6%
Other/none 5%
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Alzheimer’s and Dementia Care
Private Room Semi-Private Room
$261 Daily $230 Daily
$95,265 Annually $83,950 Annually
Average Nursing Home Room Rate for Alzheimer’s and Dementia Care
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Security for Separate Alzheimer's/Dementia Wings in Nursing Homes
Locked unit 83%
Unlocked, but doors arealarmed 9%
Residents wear monitors7%
Other/none 1%
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Physical Connection to Hospital of Assisted Living Community
Freestanding 86%
Connected to assistedliving community 9%
Connectedto hospital 5%
Connectedto bothhospital and assistedliving community
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Nursing Homes Typically Include:
• Room and meals
• Nursing care
• Medication management
• Personal care (assistance with ADLs)
• Social and recreational activities
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Assisted Living Communities: Physical Connection to Hospital or Nursing Home
Freestanding 79%
Connected to nursinghome 19%
Connected to Hospital 1%
Connected to bothhospital and nursing home1%
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Adult Day Services Model
Average: $71 (both medicaland social 44%)
Average: $79 (medical23%)
Average: $63 (social 33%)
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Adult Day Services: Physical Connection to Hospital, Nursing Home, or Assisted Living Community
Freestanding 71%
Connected to nursing home11%
Connected to assisted livingcommunity 8%
connected to both assistedliving community andnursing home 6%
Connected to hospital 2%
Connected to hospital andnursing home 1%
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Additional Services Provided at Adult Day Services Centers
0% 20% 40% 60% 80% 100%
Incontinence services 94%
Nurse on staff 85%
Dispense medication 85%
Wound care 60%
Respite services 59%
Rehabilitation services 38%
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We All Know the One Child Policy
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China’s One Child Policy
• Created by the government in 1978 to alleviate social, economic, and environmental problems.
• The policy has prevented more than 250 million births between 1980 and 2000
• Four hundred million births over all through 2011
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What Contributed to the Policy
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Catastrophic Implications
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What are the Biggest Challenges for Singapore’s Retirement Industry?
• Cultural acceptance
• Financial capability of Seniors
• Regulations
• Poor performance of established projects
• Availability of land
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The Challenge? Communications
The best time for seniors to consider a senior living community is before it’s needed–while the choice is still theirs, while they can get the most out of a whole new world of activities and opportunities, and while future health care services can be arranged.
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A GROWN-UP CONVERSATION BETWEEN CHILDREN AND THEIR
AGING PARENTS
• Parents do their best to help their children make smart decisions, live a good, productive life. A time comes to return the favor and have an open discussion about making informed decisions about senior living options available, and to discuss the next stage of life
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ECON’s All New Medicare Centre
and Nursing Home in Taman
Perling, Johor Bahru
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Projected Growth for Other Country’s Retirement Industry
• China
• Thailand
• Japan
• Malaysia
• Indonesia
• Singapore
55%
7.5%
9.3%
7.4%
3.7%
?
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Birth Rates
• Replacement Rates 2.1
U.S. 2.0
Germany 1.4
• Singapore
Chinese 1.08
Indians 1.09
Maylays 1.64
* Each successive generation of Singaporeans will halve in the next 18-20 years
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Demographics SINGAPORE MALAYSIA
Population Approximately 5.5 million Approximately 26.5 million
65 Years and Over 8.1% 5.3%
Median Age 33.6 years 27.4 years
Population Growth Rate Nearly 2% 1.5%
Life Expectancy at Birth 84.07 years 74.28 years
Health Expenditures 4% of GDP 4.4% of GDP
Hospital Bed Density 3.14 beds/ 1,000 population
1.8 beds/ 1,000 population
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Singapore
2011
•7 Adults supported 1 retiree
2030 •2.3 Adults
will support 1 retiree
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Steps in the Predevelopment of a Retirement Community
Determine • Demographic analysis of the market • Site selection process (boots on the ground) Assess • Community with respect to neighbors, neighborhoods, government and
competition • Local market specific demographics • Market rates based on how and where seniors are living Analyze • Market data, objective and subjective assessments • Development process complexity • Timing and costs Prepare • Financial proforma to asses financial feasibility
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Assessing Financial Feasibility Review & Understand • The market • Location and land cost • Project positioning • What the unit mix will need to be • Time line for, and estimate of, occupancy build up • How projected unit pricing relates to the market • SWOT results for adjusting numbers • Available funding sources by type and appetite Sensitivity Analysis • Review differing scenarios in a proforma financial model • Adjust variables
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Operational Steps Before Opening a Retirement Community
• Initial proforma review and approval (based on current market rates/ wages/ benefits/ op expenses)
• Marketing office • Coordinate contracts for phone, perimeter security, e-call systems • Utility connection documentation, approvals, and fees • Coordinate with contractor for water/sewer and electric to
marketing office • Review all design plans, FF&E and location of models • Review competitor analysis • Identify key referral sources and community leaders • Marketing and media plan outlines • Licensing process
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Scheduling
• 12 months - begin recruitment of executive director
• 6 months - hire and train executive director
• 6 months - recruit, hire and train marketing director
• 2 months - recruit hire and train concierge
• 3 months - job fair and recruiting for department heads
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• Begin networking for project
• Recruit additional marketing support
• Finalize marketing and pre-opening budgets
• Review resident agreement
• Modify policies and procedures manuals to conform to local regulations
Pre Opening
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• Complete final year one operating budget
• Contract local support services
• Certificate of Occupancy for models
• Job Fair- recruit and hire all positions (care managers, housekeepers, cooks, etc.)
• Confirm accounts with food service vendors
• Complete model apartments
Pre Opening
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Operational Steps to Open a Retirement Community
• Executive Director building walkthroughs • Employee files completed • Dietary housekeeping supplies and wares • Licenses and inspections • Complete resident agreements • Certificate of Occupancy – Building Inspector, Fire
Marshall, Contractor • Coordinate staff move-in to the property • Finalize first month’s resident move-in schedule • Regional training team on site to assist with staff
orientation and training
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• Complete initial staff training and orientation
• Coordinate moving computers, furniture
• Complete Punch List
• Interior Designer complete FF&E installation
• Provide staff with equipment operations manuals
• Final cleaning of building
• Pre-opening reception for prospective residents, families, dignitaries
• Home Opening and Resident Move-In
• VIP Party
• Press Tour
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Sources
• Independent Living and CCRCs by Jim Moore www.m-d-s.com
• Shock of Gray by Ted C. Fishman Scribner, New York • Age Wave: How The Most Important Trend of Our Time Can
Change Your Future by Ken Dychtwald http://www.agewave.com/
• Forbes Magazine, October 2012, Lee Kuan Yu;“Warning Bell” • The Elderly in Singapore; Wong Yuet Mei and Teo Zhiwei;
Singapore Department of Statistics • MetLife Mature Market Institute Study 2012
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Web Sources
• www.aegisliving.com/aegis-living-of-aegis-gardens/ • www.theclareatwatertower.com/ • www.m-d-s.com Jim Moore • https://en.wikipedia.org/wiki/One-child_policy www.metlife.com/mmi/index.html • www.icaa.cc Colin Milner: International Council on Active Aging • http://www.econhealthcare.com/ • http://www.aegistherapies.com/home.aspx?showpage=true • http://perkinseastman.com Brad Perkins
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Thank You
David P Collins
Managing Partner
Active Living international
www.activelivinginternational.com