CCRC Sees New Skilled Rehab Unit as Selling Point When Pitching to Baby Boomers

Several continuing care retirement communities (CCRCs) have been dropping or scaling back the skilled nursing care they provide, even though the full-service continuum of care forms a key selling point for their operators.

There are numerous reasons. One is the role of government reimbursement in skilled nursing, as well as staffing issues — both were cited by a report from Fitch Ratings on the sector, even though the financial ratings service issued a “stable” credit rating projection for CCRCs. In addition, demand for skilled nursing services has been declining in recent years for reasons ranging from a healthier elder population to the migration of skilled services into non-SNF settings, according to a different report from the commercial real estate services firm CBRE.

The move away from skilled nursing by CCRCs was perhaps most dramatically highlighted by the Wilsonville, Ore.-based Avamere Family of Companies announcing a “micro CCRC” in St. George, Utah, which features 300 units of independent living, assisted living, and memory care — and no skilled nursing. The company last fall launched an entirely separate brand for its new CCRC-lite developments, Ovation by Avamere, with another such facility breaking ground in Omaha, Neb.


But the Menno Haven CCRC in Chambersburg, Penn., is making major renovations to its rehabilitation offerings — and even though the work does include replacing its nursing home and trimming the number of skilled nursing beds, the not-for-provider has no intention of cutting out SNF care altogether, CEO Hugh Davis told Skilled Nursing News.

“A lot of people are walking away from skilled nursing, but it’s really important to our residents, and a big part of why we’re making this investment is that how they spend their days in skilled nursing is really important to them,” he explained. “The changing consumers, just from where we are today, are not accepting a traditional nursing home.”

Renovation with a focus on rehab

Menno Haven has two sites located a mile apart: Brookview and Chambers Pointe. The Brookview location has 152 skilled nursing beds, about 80 assisted living beds and a little over 400 independent living units. Chambers Pointe has 250 independent living units, 80 assisted living units and 60 skilled nursing units.


The CCRC also offers home and community based services, and the new rehab center it recently opened will be housed under that umbrella, Davis said, serving residents of the CCRC and also the community at large.

“The genesis for it came out of replacing the nursing home at Brookview, which started as a SNF in 1964,” Davis said. “Our strategic planning was to replace the Brookview nursing home, and in doing so [we] made the decision [to focus on rehab] because we see a big difference between the needs of the short-stay guest versus the long-stay.”

The rehab site will have 44 private rooms and try to create the atmosphere of “a medical spa resort,” Davis said. That model in particular has seen a flurry of development in the across the country in recent months: National Health Investors (NYSE: NHI) has made a push into skilled nursing with an eye on higher-end rehab in a development near Milwaukee with operators Ignite Medical Resorts and Villa Healthcare, while Plum Healthcare Group in California is building a new facility to provide short-term, high-acuity rehabilitation.

Menno Haven has seen an earlier age of interest for independent living, along with new expectations for how residents will receive skilled care.

“A lot of them are going to intersect with the idea of: ‘I go to the nursing home to recover and go back to my independent living,'” Davis said. “That’s where we saw the conflict … Baby Boomers, they’re used to going and traveling and staying in these nice hotels and nice concepts.”

Consumers want full continuum

As a result, the goal of the short-term facility is to separate the concept of the rehab care from the concept of home. Menno Haven aims to do this by replacing the 152-bed nursing home with the short-stay rehab center and what Davis describes as the “small house model,” which has some resemblance to the Green House model — but also has some key differences. Menno Haven’s new facility will have a core building modeled on a town center, with a chapel, a room for a town hall, a beauty shop, and other amenities, with three 18-bed small houses attached via a small hallway.

“What we don’t like about the Green House model is the houses standing alone and not being attached to anything,” Davis said. “And that’s not to criticize them, or anything, we just have concerns about isolation.”

The renovation does mean cutting some beds, given recent trends in declining occupancy for skilled nursing, he noted.

“Our occupancy has actually stayed fairly strong, but we’ve seen the trend nationally, and we thought it was in our best interest to remove approximately 50 beds from our continuum,” he said. “We had originally designed the project to have six households, but we brought that back to three, and the building is designed so that we can add two more households in the future if we need them.”

Management plans to open the small-house nursing home at the end of this year or early in 2020. The residents will be moved into the smaller nursing home over time, Davis said.

Though the company went forward with the rehab unit in response to the changing demands of consumers, Davis does not count himself among the “naysayers” of skilled nursing and CCRCs. If anything, the industry could see a point in time where there are not enough SNF beds to meet demand, he noted. In fact, Menno Haven keeping skilled nursing in its continuum might be a boon for the community as it seeks to lure new independent living residents.

“We continue to see very strong interest in our independent living, and again, when we focus on that group, what’s important to them is where they’re going to wind up … and what’s our vision for that,” Davis said. “We have seen a direct correlation in our plans for skilled nursing and the interest on the independent living side. So I do think to consumers it matters. The continuum of care matters to them.”

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