HumanGood has gained industry attention for its plans to reinvent the continuing care retirement community (CCRC), but the large nonprofit provider has even grander ambitions when it comes to senior living innovation. This year, it plans to hire an executive to focus on its wide-ranging innovation efforts, which include creating a prototype offering for the middle market and seeking new ways to expand affordable housing.
Pleasanton, California-based HumanGood was formed from the 2015 merger of American Baptist Homes of the West and be.group. The consolidated entity became the largest nonprofit provider in the Golden State and one of the largest in the nation, with more than 80 communities across five states.
The company is not afraid to be a trendsetter in the senior living industry. For instance, in rebranding to HumanGood last year, it dropped any overt reference to seniors or housing. But HumanGood is seeking to stand out in various other ways, which CEO John Cochrane [pictured above] recently outlined at the company’s annual meeting and in a follow-up conversation with Senior Housing News.
Ingredients for innovation
In August, Cochrane spoke with SHN about HumanGood’s intention to reinvent the CCRC concept. There are a number of issues with the traditional CCRC model that Cochrane views as outdated or ineffective, including that services are too bundled for the consumers of today and tomorrow.
“The CCRC reinvention is getting a lot of traction in the industry,” he told SHN last week. “From HumanGood’s perspective, we’re taking a deliberative and careful approach to this.”
As a first step, the company is hiring a vice president of innovation and experience design. The new executive will be responsible for creating a culture of innovation that will drive the CCRC reinvention and other projects.
A concept that has been widely embraced by the hospitality industry, experience design refers to taking a more holistic approach to how consumers interact with a brand. It’s a less transactional way of building a relationship with customers, Cochrane said, and more about creating a high-quality experience through products, services, interactions with team members, and other touchpoints.
HumanGood began the hiring process four or five months ago and received more than 130 applicants. They have included people who previously worked for tech companies like Google and Apple, as well as Fortune 100 companies.
“What this tells us is that this space is getting attention of players outside the traditional environments from which we draw,” Cochrane said. He believes HumanGood will be the first senior living provider to combine innovation and experience design into a single senior-level role.
Final candidates have been selected, with the goal of having someone on board by early May. The big innovation push is still to come, pending this key hire. However, HumanGood has made progress in upgrading its dining offerings, a focus of the CCRC reinvention.
“We started out with a blank-sheet approach to finding stragetic partners who understood our corporate values and goals of reinventing that experience to fulfill customer expectations, which have changed fairly dramatically in the last five to 10 years,” Cochrane said.
Through that process, HumanGood has struck a partnership with Morrison Community Living and Bon Appetit Management Company, both part of foodservice and support services company the Compass Group. Morrison specializes in serving senior living, while Bon Appetit has a deep background in taking a local, sustainable approach to dining. Together, the partnership is poised to elevate senior living dining through practices such as farm-to-table, use of whole foods and scratch cooking, and sustainable disposal of food waste, Cochrane said.
“We think we have something unique and exclusive to HumanGood,” he said of the approach.
Bon Appetit is currently in one location working on a prototype experience, which is slated to debut in mid-April or early May.
At the HumanGood annual meeting, Cochrane laid out two initiatives for 2018 in addition to the CCRC reinvention: developing solutions for the middle market, and expanding the organization’s commitment to affordable housing.
The middle market—that is, middle-income consumers—represents a huge opportunity for senior living, which so far has excelled mainly in serving people who can afford six-figure CCRC entrance fees or monthly assisted living rents averaging nearly $4,000. However, providers have struggled to devise a scaleable model to serve the middle market, in part due to the costs that go into developing and operating private-pay senior living.
“You speak of the puzzlement of how to serve this market, and that is spot-on,” Cochrane said. “I would echo that from my conversations with other execs.”
HumanGood is collaborating with a design firm to create a middle-market prototype, with hopes of starting a pilot in 2019. This concept is in early stages, but so far it is focused on people living in their single-family home, not a congregate housing model—although that could end up being a component in the future.
Yet, it’s not accurate to characterize the middle-market approach as based around “home care,” Cochrane said. He described home care as a needs-based offering, while HumanGood is exploring what he calls a “lifestyle engagement concept” to help people meet their aspirations as they age.
Serving older adults who have the fewest resources is also part of HumanGood’s mission as a nonprofit, and the company currently has a portfolio of 63 affordable housing properties.
“We’re facing a challenge as a company and industry, of how do we grow our collective commitment to serving the disadvantaged as the [aging] population is going through the roof and government resources to develop and operate [affordable housing] are diminishing, if not going away,” Cochrane said.
Though he is not sure what the new financing vehicles are going to be as traditional grants and tax-credit based options are curtailed, he wants to serve an even greater portion of the affordable housing market—perhaps even the senior homeless population. He believes that financing and operational models will emerge, because there is such economic and social value in providing housing and services to those most in need.
“It’s easier to say than to find, but that’s what we’re looking for,” he said.
There are no immediate plans at HumanGood to create sub-brands for its offerings at different price points, which is a common approach in the hospitality industry, and a strategy being explored by providers such as Eclipse Senior Living. However, Cochrane does not rule sub-brands out for the future.
Yet, he also believes that mixing all these different populations might become more common, as mixed-use projects bring together higher-end options as well as affordable units and perhaps even workforce housing.
“I think there are going to be new models that blend populations, not just among the economic but the age spectrum,” he said. “You’re no longer going to see bubbles of, here’s the low-income building, here’s the high-end CCRC, here’s the discrete middle market bubble over here.”
Aside from some affordable housing projects that have already been in the pipeline, development is on hold for HumanGood as it creates and refines its new operational models, which is to be the focus for 2018. The plan is for large-scale innovation to be achieved step-by-step through prototypes and pilots.
“We want to move forward with all due speed, but we want a measured approach,” Cochrane said.
Written by Tim Mullaney