✨ Governance of CCRC/LifePlan Communit

Donna,

I agree that legal advice is helpful and advisable. But in my experience, dissatisfaction is already mighty high when the parties are citing the contract and making demands. We need to be mindful that transitions are stressful and usually involve a number of irreversible actions: selling one's home, downsizing, leaving one community and joining another, establishing new medical and professional relationships, and more. So once someone moves to a lifecare community, there are important barriers to changing. This creates a power differential between provider and resident particularly if the community lacks an effective resident's organization.

This circumstance is implicitly intimidating for the resident and may set the stage for abuse.

Richmond Shreve

NaCCRA Board Member

Forum Moderator

However, once a contract is signed, it is easy to withdraw if one can demonstrate breach of contract, and that you have relied on it to your detriment.

The Residency Agreement is still, at the end of the day, a contract. Buying an hour or two of a lawyer’s time is usually money well spent, before you sign—or even after you sign. Luckily the law is founded on a “reasonableness doctrine,” and civil law is a beautiful thing.

Do board members of a non-profit CCRC have a fiduciary duty to the residents (present-day residents even more than future ones—after all, it’s the present day residents who have paid the big money)?

To thrive a community needs to be engaged and committed to a shared vision that is bigger than any individual's self interest. So resident ownership wouldn't necessarily solve the problems. There is a balance the enterprise needs to achieve. It must be sustainable in the long term, and service oriented day to day toward its residents. In the best nonprofits, there is a volunteer board of directors that upholds the mission, and oversees professional management making it accountable for financial viability, and for nurturance of the residents. Residents must understand and support the business decisions made to achieve the balance.

Regulatory authority should establish best practices, financial integrity, and protection of resident rights. Absent effective regulation, it's easy for management to misuse reserve funds and cover up problems. CCRCs business models involve actuarial considerations that go beyond ordinary accounting best practices and involve complex estimating of future costs. Few residents can understand or evaluate whether reserves for such future costs are sufficient.

In addition, once a life care contract is signed, the resident can't easily withdraw. Absent an effective resident council and a board of directors that's sensitive to the culture of the community, abuses by management can happen. So, for a community to thrive, there must be mutual goodwill and a balance of power must be achieved. The responsibility and power to achieve the balance rests with the board of directors.

Dysfunction happens when boards become isolated from residents and rely solely upon management to report and interpret the state of the community. It also happens in large multi-community organizations where the board is isolated from residents by layers of management.

Richmond Shreve

NaCCRA Board Member

Forum Moderator

Is the best way to correct this resident-owned CCRCs?

These remarks point to an important benefit of NaCCRA membership. If you draw upon NaCCRA resources, it is not your solitary voice speaking truth to power. You can tap into a wealth of support. Form a NaCCRA chapter independent of your community council. Dedicate your efforts to good governance practices for the benefit of all residents. Your purpose is actually aligned with that of management at the highest level -- everyone wants the community to thrive and sustain itself. NaCCRA is a voice of reason and wisdom.

Draw your circle to include all the stakeholders.

Richmond Shreve

NaCCRA Board Member

Forum Moderator

Let's face it. Organizations that want to hear from those they serve, make the process simple, easily accessible, confidential, and quick. Residents Councils are none of that. They are burdensome, not confidential, slow moving, and serve to make residents think they have a voice when they don't. These councils are good for a certain types of issues involving more comprehensive organizational issues such as dining services, grounds, housekeeping, activities, and the like. Problems in these areas are the "low hanging fruit," easiest to address, and of less important than more difficult issues. They are the easy part.

For issues that are deeper rooted, lack of confidentiality is paramount. Problems related to ageism, poor service, rude employees, paternalistic attitudes that demean, and abuse, no matter how subtle are neglected. Where reporting may reveal the resident's personal, family or financial issues, no one is going to speak up. The act of reporting these problems opens the resident up to ridicule, dismissal, and being branded as a troublemaker as described above.

There has to be a better way to do this. Confidentiality is the first step. Understanding that residents are working with an open, receptive management is the next step. Residents need to know that things can improve.

Many of us subscribe to the notion of making "good trouble" when the situation calls for it.

As Richmond said  “People who challenge management are often dismissed as malcontent trouble makers. “, I am one of those troublemakers.

In many communities, resident councils have little clarity about their oversight or watchdog role. David's questions are good ones. I'd also look to see if those residents elected to leadership roles see themselves responsible for asking tough questions and insisting that management follow best practices. People who challenge management are often dismissed as malcontent trouble makers.

If management is secretive and withholds information, you should assume that they want to hide something. Even though residents may not have a contractual or regulatory right to full disclosure, they have a moral and ethical right since it is their home at risk, and it's their monthly fee money that's keeping the lights on.

Richmond Shreve

NaCCRA Board Member

Forum Moderator

The psychological maladaptive process of denial is one of the mysteries of human existence. Denial creates a pleasant reprise from from facing the realities of life, but that only lasts so long. Then it doesn't. Real life inserts itself at some point in time and all that was denied must be faced anyway. This time with little preparation. People deny themselves the energy to take action in a timely manner. Denial is linked to people not speaking up when speaking up could lead to solutions. This is why it is so important for people who are aware of possible emerging problems to speak up and find others who are aware or want to be.

The number of bankruptcies is low in CCRCs, but they do happen so we need to keep on top of how that is playing out in our facilities.

Maura Conry

NaCCRC Board Member

Forum Monitor

I live in a for-profit CCRC in Arizona where there is little regulation, but even here there is an annual disclosure statement with audited financials and every three years the state requires an actuarial report (basically the present value of future liabilities compared to the PV of future assets).

While the assumptions in the actuarial study influence its outcome and ownership controls the assumptions, at least one can judge whether it is a realistic projection.

In these CCRCs that are failing are non of these data available or are residents ignoring them? Where are your finance committees and resident councils?

I live at Medford Leas, a CCRC in Medford New Jersey. In spite of the recent bankruptcy and closing of nearby CCRC Harborside, residents over 85 pretend that this will not happen to them. They choose to be ill-informed even when they see our occupancy is only 78% - the minimum for a healthy CCRC is 82%.This information is hidden by the CEO but available.

Total and ongoing transparency is required on issues with such devastating impact on resident's lives. This requires an aware, well-informed resident population in working in concert with management. Mindlessly accepting what is offered "for our own good," may or may not work. Process such as these develop over time, sometimes decades, then come to a head suddenly. Residents must keep their fingers on the pulse of the organization in which they live to be able to spot trends before they worsen.

Maura Conry

NaCCRA Board of Directors

Forum Monitor

Using resident contract consideration for lifelong benefits as spendable cash for short term provider benefits without resident in governance is a life plan disaster. First, the Tampa Unisen evictions (https://www.abcactionnews.com/news/local-news/i-team-investigates/more-than-100-people-evicted-from-senior-care-facility-due-to-bankruptcy) and now the Harborside situation (https://www.seniorlivingforesight.net/a-tragic-regulatory-and-industry-failure/) demonstrate the vulnerability of residents in CCRCs which have balance sheet deficits (liabilities greater than assets).

https://www.seniorlivingforesight.net/financial-trust-part-1-the-challenge/ and https://www.seniorlivingforesight.net/foresight-financials-trust-part-2-the-solution/.

Remedial action is needed. Residents are at risk.