Joe Carella, MBA’89, was more or less a typical teenager in the 1970s. A football player, he was strong, cocky, and fearless, and his day-to-day concerns ran the usual gamut of sports, girls, and school.
Then at the age of 17, a freak accident forced him to change his perspective, to think beyond his narrow teenage preoccupations. Tearing his ACL while working out, Carella went to the hospital but was told that the pediatric ward was “closed.” Instead, the hospital admitted him into an unfamiliar place: the geriatric ward.
Not even knowing what the word “geriatric” meant at the time, Carella was crowded into a room with two older men. One was lost in the advanced stages of dementia, his only human interaction coming when a nurse brought him food. Carella’s other roommate, facing the loss of his legs due to gangrene, was quiet and despondent. From his bed, Carella could see other seniors slumped in wheelchairs along the hallway.
The sad, impersonal geriatric ward troubled Carella. He felt helpless and anxious. He worried about his roommates. After four days, he successfully lobbied the head of nursing to move him to pediatrics, though his experience in the ward never left him. It would change the course of his life, inspiring him to work with seniors as a career. “There’s a phobia in me that I will return there,” says Carella, who, even now, has woken from sleep thinking he was in the ward. “That drives me, that feeling I could go back, that someone I love could go there.” Today, Carella is executive director of the Scandinavian Charitable Society of Greater Boston, which operates the Scandinavian Living Center, a nonprofit assisted-living residence in Newton, Massachusetts.
Carella is one of a number of Babson alumni working in the rewarding yet challenging world of senior housing, making sure that our most esteemed and respected citizens, our parents and grandparents, our elders, have a safe and welcoming place to live.
Hard to Manage
The need for senior housing and care is considerable. In a 2013 report, the Centers for Disease Control and Prevention calculated that the five main types of long-term care, which include nursing homes, assisted-living communities, hospice, adult day-care centers, and home health agencies, provide services to more than 8 million people in the U.S. every year. That need will only grow as the baby boomers age. According to a 2016 report by Harvard’s Joint Center for Housing Studies, the U.S. population aged 65 and over is expected to swell from 48 million to 79 million over the next 20 years. Furthermore, the number of those 80 and older, the group that will be most in need of senior housing, is expected to double from 12 million to 24 million by 2035, the Harvard report states.
While demand continues to grow for senior housing, the industry isn’t an easy one to navigate, especially for those operating nursing homes. Michael Cummings, MBA’79, a senior lecturer in management at Babson, once owned five nursing homes in Massachusetts, but he sold the last of them in 2016. The benefits of the business, says Cummings, were overwhelmed by the downsides. “I sold my interests after 35 years in the business.”
Cummings first worked in a nursing home as a college student, mopping floors, cutting grass, and doing maintenance at a facility his father owned. “I learned the business from the ground up,” he says. Later, when he grew tired of the corporate world and longed to be his own boss, Cummings called his father. “I asked if he knew of any nursing homes for sale,” he says. “He called back in an hour and said there was one in bankruptcy.” After buying the nursing home and bringing it out of bankruptcy, Cummings went on to purchase four more through the years. He enjoyed interacting with families, and Medicaid and Medicare contracts brought a steady income. “It was a really nice business,” he says.
Then in the 1990s, the business began to shift. Wrongdoings in the industry resulted in a heap of regulations. Some were certainly needed, but the regulations grew Draconian, says Cummings, and stifled innovation. Paperwork burdened the staff. Dwindling Medicaid reimbursements, which now tend to fall short of the routine costs incurred in caring for a resident, also have taken a toll, as has the popularity of assisted-living facilities, which cater to residents who can’t live independently but don’t need constant supervision and care. As a result, the average length of stay in a nursing home has dropped to just about a year, typically toward the end of one’s life, says Cummings. Profits have eroded in a business that already didn’t have a big profit margin.
For Cummings and many owners of family-run nursing homes, the only recourse has been to walk away. “Most enterprises in the nursing-home business were family run. They are basically gone now,” says Cummings. “Now nursing homes are run by large corporations.”
For Ed LaFrance ’95, the key to surviving and thriving in the business of senior housing comes down to securing financing that he calls “purpose-driven.” A veteran of the industry, LaFrance in 2016 co-founded EvoLve Senior Living, which operates two senior residences in New Hampshire. Prior to EvoLve, he started two senior housing advisory firms, which helped operators of senior facilities find capital partners. LaFrance works in the industry because he feels a responsibility to a population that is sometimes overlooked. “I look at seniors as our elders,” he says. “They need an advocate. They are one of the two bookends of our society, the other being children. They have to be properly cared for.”
LaFrance has ambitious plans for EvoLve, but he needs to find the right financing. Instead of reaching out to financial institutions that will expect a high rate of return, he’s seeking investors driven by the “triple bottom line,” those motivated by social concerns who might want to make an impact on senior care. “They are the smart money out there,” LaFrance says. “Sadly, they are a small minority.” LaFrance would like the financial leeway to pursue measures that he believes will have a positive effect on residents’ health and wellness, which could lower costs in the long run.
His plan starts with food. LaFrance wants to offer meals that are organic, non-GMO, fermented, and locally grown, far from typical fare in senior housing. He says better food leads to improved well-being. “People think of it as expensive,” he says, “but you get happier and healthier people.” LaFrance also wants EvoLve residents to have access to acupuncture, massage, homeopathy, and other alternative approaches to wellness. “These are things that are nearly nonexistent across the spectrum of senior living today,” he says.
Currently, EvoLve manages a senior community in Littleton, New Hampshire, that offers assisted living and apartments for more independent seniors, and it owns and operates a pre-existing memory care residence, a specialized type of assisted living for people with dementia, in Rye, New Hampshire. Eventually, EvoLve plans to build its own residences, LaFrance says. He wants to get away from the usual design of senior communities, which typically feel like hotels and are built to impress the adult children of residents. Residences for people living with dementia should be smaller, more intimate, and have plenty of natural light. “Architecture makes a big difference. You don’t want long hallways and big footprints,” says LaFrance. “You put them in a facility that’s tens of thousands of square feet, and it’s disorienting.”
LaFrance’s long-term plan is for EvoLve to have a portfolio of 10 to 15 senior residences. He thinks the company’s ideas about food, care, and architecture will appeal to aging baby boomers, and he’s hoping EvoLve can influence other senior residences to adopt these measures as well. The population is growing older, he says, and the industry must be ready. “I’m not concerned about someone being a competitor,” says LaFrance. “I’m concerned about the future for our elders.”
Joe Carella of the Scandinavian Living Center also hopes to set an example that influences other senior residences. A believer in the power of community-centered living, he has given lectures and written books to spread the word about the topic. “I will talk to anybody about this,” he says. “I’m hoping people who observe what we’re doing will then take it with them.”
With roots dating back to Swedish and Norwegian charitable organizations that formed in the early 20th century, the Scandinavian Living Center opened its doors in 2001. Residents don’t have to be Scandinavian to live there, but the culture did inform the creation and operation of the residence. Carella took research trips to Denmark, Finland, Norway, and Sweden and visited more than 60 senior-living facilities to understand how Scandinavians approached elder care.
Since then, Carella has been a believer in the importance of community connections. At the center, residents aren’t closed off from the outside world—rather, the outside world is invited in to mingle with them. Elders have knowledge to share with others, says Carella, and they certainly are not done with learning and meeting new people. “Community connections don’t have to stop,” he says.
The center has 40 apartments for residents, but 50 percent of the building is common space for people to meet and gather. Community members and residents play in a regular, daylong cribbage game. Service organizations such as Minding Your Mind and Newton at Home have offices in the building, while some two dozen other groups hold meetings there. A Scandinavian library is open to all, as are performances and film screenings held in a large hall. A weekly pop-up cafe sells Swedish and Danish pastries, and an annual ice cream social attracts a few hundred attendees.
Noticeably absent are events that would seem overtly tailored to an older audience, such as blood pressure clinics or tutorials on wills. “Let other people do programs that remind people that they’re old,” says Carella. In all, about 2,000 visitors come to the center every month, and that doesn’t include family members. When he tells others in the industry that figure, Carella says, “they are blown away that a small place like this has so many visitors.”
A high volume of visitors also helps ensure that the facility runs smoothly, notes Carella, keeping the staff “on its toes.” As with other senior residences, the Scandinavian Living Center must contend with regulations that seem to balloon every time a facility somewhere in the country is negligent. “We’ve got to stop punishing the whole industry,” Carella says. “The pendulum has gone too, too far.”
The Business Abroad
Complaints about regulations are not limited to the U.S. In Sao Paulo, Matthias Weisheit ’01 is founder and CEO of Felita, a senior residence that opened in 2013. Through the years, Weisheit had worked for JPMorgan Chase, Barclays, and other firms, but he eventually felt that he needed to make a change. Originally from
Germany, he had lived in the U.S. for 13 years before moving to Brazil, where he believed he could contribute more to a society away from the developed world. “I wanted to do meaningful work that helped people,” he says.
He saw an opportunity in senior housing, which is an underdeveloped industry in Brazil. When Felita was founded, large senior housing residences were mostly nonexistent. Modest family-owned retirement homes might have beds for 10 to 15 residents, and organizations such as the Catholic Church or the French consulate operated small residences. But many people cared for their senior family members at home by hiring a live-in caretaker, who might typically earn a wage of only about $200 a month.
Then in 2013 new labor laws were passed that dictated a higher minimum wage for in-home caretakers and limits on how many hours they could work in a day. As a result, the cost of taking care of someone in the home greatly increased, says Weisheit, which made a senior residence such as Felita more attractive. Since then, business has been good for the company, which is able to accommodate up to 95 residents. Serving both people who need a high degree of care and those who are more independent, Felita has three locations in Sao Paulo, with a fourth planned to open next year.
Of course, Weisheit has had to deal with laws and regulations, too, the most troublesome of which are the rules regarding employee termination. Employees are entitled to generous unemployment benefits if they’re fired, says Weisheit, which can cause problems with opportunistic staff. “People start sabotaging so you will fire them,” he says. “This is something you have to watch out for. The incentive is on the side of being a bad employee.” He once had an unruly cook who, in an attempt to get fired, would lie to the children of residents, telling them their parents were made to suffer through cold-water showers.
For the most part, though, Weisheit finds the business to be rewarding. He enjoys walking in the door and seeing the residents. “They are happy to see me,” he says. “I know them all by name. I know their medical conditions. They recognize me. They talk to me. They ask about my wife.” The children of the residents also tell him how grateful they are for the good care their parents receive.
As much as alumni strive to make their nursing homes and assisted-living residences feel friendly and welcoming, many seniors would prefer to stay in their homes. The Program of All-Inclusive Care for the Elderly, or PACE, was created to meet this need. The Medicare and Medicaid program allows seniors to live at home while traveling to a PACE center during the day for comprehensive care, as well as a chance to socialize with peers. According to the National PACE Association, more than 250 centers are open around the country. They serve 45,000 participants, which is up from about 25,000 six years ago. To be eligible for PACE, potential participants must be at least 55 and certified by their state to need a nursing-home level of care.
“I like the model very much. It’s an effective system,” says Dr. Aria Anvar, MBA’86, who has worked for two PACE sites, the most recent being Los Angeles’ Brandman Centers for Senior Care, where he was medical director until last year. While he’s currently a hospitalist at Adventist Health Glendale in California, he’s hoping to work again for a PACE site in the near future. “PACE participants are people who are normally in a nursing home,” says Anvar. “But PACE uses a team approach to enable them to live at home as long as possible.”
The team at a PACE site is responsible for practically every aspect of seniors’ care. If seniors are a fall risk, a physical therapist will help them. If they’re underweight, a dietician will step in. To make sure their housing situation is adequate, a social worker will visit them. Meanwhile, clinicians keep a constant eye on their health, which helps eliminate the “revolving door of medical care” that often confronts seniors. “The goal is to stabilize and be preventative as much as possible,” says Anvar. “Frail older adults are at risk. Any small event, a fall, poor nutrition, pneumonia, and they start to decline quickly.”
Beyond medicine, PACE also provides transportation to and from its site and offers recreational activities such as card playing or singing. “It’s an important piece of care,” Anvar says. “A lot of these participants are quite isolated.”
Like other Babson alumni, Anvar finds satisfaction in working with seniors. “These are people in the later seasons of their lives, and they need help,” he says. “You can have a profound impact on someone’s quality of life.” If a senior is on 15 to 20 medications, for example, Anvar will try to cut that down, which will help reduce side effects and medication errors.
Anvar forms deep relationships with his patients, who have lived full lives. “It can be quite rich,” he says. “They bring their wisdom. They bring their experiences. Some of them are World War II or Korean veterans.” He gets to know family as well, and together they try to figure out the right course of action for loved ones. “These are hard discussions,” he says. “What would your mom want if she was standing at the foot of the bed looking at herself?”
While PACE is an effective program, it’s still not widely adopted. Anvar wonders what will happen as the population continues to age. He doesn’t feel a concerted effort has been made to address the millions upon millions of people who will need care and safe places to live. “Who’s going to take care of them?” he asks. “It’s challenging. It’s extremely challenging.”