Avamere Pivots Away From Skilled Nursing

October 15, 2018, Alex Spanko, Skilled Nursing News - The Avamere Family of Companies on Monday announced plans to take its skilled nursing-free retirement communities national, marking another significant milestone in the senior housing space’s growing skepticism of long-term health care.

The Wilsonville, Ore.-based operator and developer of senior housing and care properties rolled out its Ovation by Avamere subsidiary with groundbreaking ceremonies in St. George, Utah and Omaha, Neb. — the sites of two new “micro-continuing care retirement communities (CCRCs)” with no skilled nursing offerings.

“We have been in a constant state of innovation for over twenty years,” Avamere founder and CEO Rick Miller said in a statement.  “Ovation is the next chapter and uses everything we’ve learned.  We’re going to get it right for seniors.”

Traditionally, CCRCs — also sometimes branded as “life plan communities” — have been marketed as a single site of senior living and care for the duration of a resident’s life.  Once moved in, he or she can have access to the full continuum of health care services, from assisted living to skilled nursing care, without having to leave campus.

But SNF services have become something of a drain on the industry, as senior living operators deal with the same regulatory and reimbursement pressures as skilled-specific providers.  Just this summer, Fitch Ratings warned that the turbulent long-term care market could lead to future credit issues for CCRC operators, while commercial real estate firm CBRE reported on the growing trend of developers eschewing skilled nursing entirely.

“Demand has been falling for a variety of reasons, including healthier seniors, shorter time spent in nursing care due to changes in Medicare and Medicaid reimbursement policies, and more care being provided in non-nursing care seniors living, especially in assisted living,” CBRE noted in its report, released in July.  “Telemedicine and other technological advances in the delivery of health care are keeping seniors with significant health-care needs in non-nursing care environments longer.”

Avamere chief development officer Ryan Haller acknowledged those trends in an interview with Skilled Nursing News back in February, when his company first announced the micro-CCRC concept it was planning for St. George.

“When you look at national skilled nursing occupancies over the past 10 years, they’re not going up, right?  A lot of [skilled nursing residents] are being sent to assisted living instead,” Haller said.  “At the end of the day, we think we’re just addressing what the population is doing.”

The two new “active lifestyle villages,” which have a total price tag of $170 million, will each feature a pair of buildings separated by a “defining boulevard.”  One structure will house independent living units, with the other used for memory care and assisted living services.

The company claims that the villages, slated to open by 2020, are the first of their kind to offer independent, assisted, and memory services with no skilled nursing wing.  To provide higher-acuity care, Avamere will instead rely on affiliated in-home rehab and therapy companies, along with “selected partners” near each facility.

Ovation will announce its next expansion site sometime early next year, according to the company.