Q & A

With more than 25 years in the seniors housing business and the largest number of communities in the nation accredited by the Continuing Care Accreditation Commission, ACTS Inc. is a true seniors housing veteran. Under the guidance of Vice Chairman and CEO George R. Gunn Jr., this West Point, Pa.-based provider has positioned itself in 10th place on both the American Seniors Housing Association's Top 25 Owners and Top 25 Managers lists for 1997.

What follows is a one-on-one interview with this industry leader.

Continuum: As a continuing care provider, please comment on redeveloping communities to increase Alzheimer's market share and to keep the resident aging in place.

Gunn: From my perspective, in terms of what we do as a CCRC, assisted living is a larger component of the facility mix. We are redeveloping our existing communities, and we are modifying our assisted living and our skilled nursing communities in order to provide a specific Alzheimer's and dementia arena to treat our residents.

In terms of new development, we're planning Alzheimer's wings and dedicated space for people suffering from the illness. I guess by the sheer numbers, and as more of the population is aging, there will be more Alzheimer's patients. Managed care means more residents return to the seniors facility rather than spend time in a medical facility. That complicates your own mix.

We are strictly a CCRC provider, not a freestanding developer. In today's dollars, we're talking $60 million to $70 million to build a campus, and we average around 600 residents per community. We build it in three phases over about a five-year period. That's our financial and construction model. We build our common areas and then the first independent living wing and progress into the more demanding phases.

Continuum: What do you see as the future of the industry, considering the supply and demand issues and consolidation today?

Gunn: I see growth. People use the expression "baby boomers," but the customers today are the parents of the baby boomers. The universe from which we're drawing our residents is large and growing. The problem our CCRC industry faces is communicating to the many influences that affect an individual's decision to move into a CCRC. A prospective resident can be confused by the plethora of options that are out there, meaning assisted living, nursing care, residential seniors housing and a CCRC, and they don't understand what the differences are between these models that are available to them. We are not rental communities, we are life care communities providing an insurance product of healthcare.

We have a large share of the marketplace and, in a desire to keep our communities full, we are launching an ad campaign. We recognize the confusion in the marketplace, so we are launching the campaign to educate the industry on what and who we are. I decided it would be to our advantage to have an industry educational campaign that might help our competitors, but it will help us more because we have a larger market share.

Continuum: ACTS practices the aging-in-place philosophy throughout its models. Comment on the future of campus-style communities.

Gunn: We're going to do our best to differentiate who we are in the market. We believe that seniors are looking for communities where they can live and not have to move around from facility to facility. So the future of larger communities, and especially the CCRCs, is very bright. While typically we are building single campuses where we have many apartments, we have in the South started a variety of villas that become feeders to the basic CCRC community.

The people who live in the villas, which are generally cottage-style duplexes, they are under our life care contract. We're finding there is a real market for people who still want to live independently and in separate homes, but have the security of knowing that if they have a physical need they have access to a medical facility.

We're building our newer communities so that they will have the cottages and a more homelike feel, and we will still have apartments for independent and assisted living residents.

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