This Year’s Model Under New Ownership, Stability Returns to Reeds Landing

Carol Katz heard the questions when Loomis Communities emerged as a potential buyer for Reeds Landing, which filed for bankruptcy last year.

Specifically, said Katz, CEO of Loomis, they asked, “why would you want to enter the Springfield market?”

Since acquiring Applewood at Amherst, with its mix of independent- and assisted-living apartments, in 1999, the Loomis family has comprised just three properties: Applewood, the independent-living apartments of Loomis Village in South Hadley, and Loomis House in Holyoke, which includes independent- and assisted-living units as well as skilled-nursing care across its campus.

But taking on Reeds Landing, which has struggled with vacancies and soaring debt in recent years, and which includes all three models of care under one roof? That would be a challenge even during better economic times, but Katz isn’t one to shy away from a challenge.

“We actually worked with Reeds nine months before we acquired them. We were aware they were in financial difficulty,” she said. “At the same time, through our own strategic planning, we had decided that, to become stronger and better meet our mission, it would be more productive for us to grow through acquisition than buying a plot of land and building a new retirement community. That decision to grow, and the timing of Reeds, fell into place at the same time.”

But even though Reeds had long been one of the most prominent retirement properties in the Pioneer Valley, Katz had to answer some critical questions as to whether it would be a good fit for the Loomis brand — particularly whether there are enough people in the area who can afford to pay into the complex.

As Susan Moore, Loomis’ director of sales and marketing, pointed out, although residential communities do draw from outside their primary market area, most elders choose — or are placed in — properties close to where they already live.

“We did our research and determined that, in fact, there were plenty of age- and income-qualified people in the primary market area, as long as we priced it correctly,” Moore said. “We took a look at competitors and at median home sales in the Springfield, East Longmeadow, Wilbraham area, and determined the price points. It’s been working. Everyone’s comments about Reeds Landing were really positive; it was just too expensive.”

In this issue, The Healthcare News checks in with the new Reeds Landing and examines why its former model proved so costly — and what Katz and her team at Loomis have done to remedy that issue as they attempt to revive and grow the region’s largest senior-living community.

New Vision

Reeds Landing was conceived in the 1980s, when a group with ties to Baystate Health envisioned a life-care center in Springfield, one that would provide housing for independent seniors and long-term care services for others. That nonprofit group — later known as Western Mass. Lifecare Corp. — came across a plot of land it thought was ideal, an undeveloped property owned by Springfield College.

The college saw value in the idea as well, recognizing an opportunity to not only generate income for the school but create something of value to the community. Construction began in 1993, and Reeds Landing opened in 1995, boasting 175 apartments and 42 skilled-nursing beds.

But, despite periods of success, Western Mass. Lifecare Corp. ran into a number of financial hurdles in recent years, making it difficult to stay afloat.

Specifically, former Reeds Landing Administrator Matthew Leahey told The Healthcare News last year, a severe recession pummeled retirement savings and depressed housing prices, so seniors have been less apt to enter the life-care model at the facility, which required an entrance fee of between $100,000 and $450,000, depending on the unit and amenities chosen. For many potential residents, the buy-in requires them to sell their current homes, and they simply weren’t getting enough on the market.

Part of what made Reeds Landing more expensive than other communities — and why, in turn, it began to struggle with vacancies and a high debt load — was its life-care model, by which residents paid a set rate that would remain constant even if that resident moved into higher levels of care later on.

“So people would pay a higher entrance fee and a higher monthly fee than they would at other, comparable communities, but if they needed to move from independent living to assisted living or skilled nursing, they wouldn’t pay anything more,” Katz said, comparing the structure to a form of elder-care insurance. “Reeds Landing was itself funding this life care, and it’s an expensive product. In some markets, it works very well, but Springfield isn’t the right market for it.”

Reeds Landing will now move to a fee-for-service basis for all incoming residents going forward, but, importantly, it has promised to honor the existing life-care contracts of current residents.

“People will pay to move into the independent-living units, but the people who need the higher levels of care will pay a higher fee,” she explained. “That said, it’s important to us from a mission perspective and a marketing perspective — what it says about our own communities — to honor the contracts that residents now have.”

Patients First

At the same time, Loomis has pledged to bring to Reeds Landing its commitment to what’s known as ‘patient-centered care,’ which gives residents greater input and flexibility regarding the services they are provided.

“This model of patient-centered care started from the nursing-home industry,” Katz said, noting, however, that she much prefers the term ‘residents’ to ‘patients,’ even for those in nursing care. “Whether we’re taking about residents in independent living, assisted living, or skilled nursing care, it’s about the residents, not the staff.”

That means residents are given a say in the decisions that affect their daily lives, she explained. “We have active resident governance associations, active committees on wellness, food, buildings and grounds. It’s resident input that determines the food menus. Residents decide what kind of activity program they should have, and the staff assists them and gives them the resources. We don’t sit in a room and say, ‘I wonder what these people would like to have for entertainment.’”

Residents have a say in finances, too, Moore added. “Developing the 2010 budget was an interactive process for us. We talked to residents,” she said. “Some of them were astounded that anyone would provide this information to them and ask that level of input from them.”

Katz said it’s important to include residents in this way, and she’d like to think such a model is becoming more common.

“Part of it is a change in the demographics of aging people,” she noted. “The people who grew up in the Great Depression and are now in their late 80s and 90s tended to be more of a generation that’s grateful for what they have, and more complacent. ‘This is what’s on the menu; choose between A, B, and C.’ ‘When you move in, choose beige, beige, or beige for your carpet choice.’ And that was perfectly fine.

“What they call the Silent Generation, born during the Depression but not necessarily shaped by it, are in their 70s and 80s today,” she continued. “They, and the Baby Boomers even moreso, are a different breed with a different set of expectations. They’re more actively involved and don’t want to be told what to do. They want to decide what to do, as well they should. And this has caused a shift in the industry mindset.”

That entails providing residents with access to services, including health services where necessary, and understanding that the fact that someone might be frail, ill, or physically limited doesn’t alter their need — or that of their loved ones — to be at the center of any decision-making that occurs, Katz continued.

“We have evolved this model over a number of years,” she told The Healthcare News. “I wouldn’t say the residents were unhappy before living at Reeds Landing, but they have commented very positively on the changes, including the added transparency they see.”

Other changes have been equally well-received, Moore said, including a home-care component that can serve as a bridge between independent and assisted living.

“After residents have lived in their independent-living home for a while and aged in place, they may start to need some additional services from us, but they may not be interested in moving to an assisted-living apartment because they may not need that level of care,” she explained.

“So we have a strong home-care program that we offer in our other communities as well as Reeds Landing. It allows us to bring assistance to independent-living residents in their apartments and allows them to stay there longer. After all, their pictures are on the walls, their furniture is there … it’s their home. We’ve found that has been very helpful for our residents and their children.”

Job Security

Keeping Reeds Landing solvent was a victory for more than the residents, Katz said, noting that the facility requires a staff of about 150. “It could have gone out of business or been purchased by some big, out-of-state chain that would have made big changes,” she told The Healthcare News.

“So we not only saved the residents’ contracts, but we saved 150 jobs as well,” Moore added. “In times like these, that’s a good thing. We’ve also been providing additional training that they hadn’t received before. They’re enjoying being part of a larger team; they now have access to resources they didn’t have before. Now they can call a colleague who does the same job in a different community and seek their advice.”

Reeds Landing still draws largely from the Greater Springfield market, although about half its residents come from elsewhere, to be closer to their adult children and grandchildren in and around the City of Homes.

Recognizing that, Reeds Landing and its new administrator, Nancy Azevedo, will host an event on April 29 from 6 to 8 p.m. specifically for the children of potential residents. Vendors and speakers will be on hand to discuss issues ranging from elder law and end-of-life planning to how to market one’s current home — all with an eye on raising the complex’s profile while helping people make well-informed decisions.

Meanwhile, the facility’s original relationships with Springfield College and Baystate Health continue to be strong, Moore said, noting that the college was helpful to Loomis during the acquisition in negotiating a new land lease.

“And physicians from Baystate still come to Reeds Landing, which is quite uncommon in the industry,” she added. “That’s not something you usually see in retirement communities.”

Katz hopes she sees more of it. Until then, she’s happy to help blaze that trail.