Over the last couple of years, I’ve heard the phrase “rogue resident” occasionally used by members of the continuing care retirement community (CCRC) industry to describe residents who are viewed as having unrealistic expectations or requests of management. Sometimes these perceptibly disgruntled residents deter the board of directors (and possibly management) from inviting resident involvement in community decisions, which is unfortunate.
I completely understand there may be some residents who are more difficult to deal with than others. Let’s face it: In life, some people are much more difficult to deal with than others. Yet, the term “rogue resident” bothers me. It’s a demeaning and dismissive term. And I can’t help but wonder if sometimes the “rogue resident” is, in reality, the smartest person in the room.
In other words, maybe it’s the action, or inaction, of management or the board that caused the so-called rogue resident to ask the hard and persistent questions. Maybe the resident has identified something of concern that management or even the board doesn’t see or chooses to ignore. After all, many CCRC residents have vast amounts of business and financial experience (and wisdom) that can benefit a CCRC.
When CCRC boards go rogue
Some time back, I had an eye-opening discussion with a staff member of a CCRC that caused me to ask myself a concerning question: Instead of pointing the finger at rogue residents, what happens when, in reality, a not-for-profit CCRC has a “rogue” board of directors?
I won’t get into too many details about this conversation, but the representative of the community (which offers a Type A [lifecare] contract) described to me how virtually all decisions related to pricing of resident contracts and the financial evaluation of new residents are made by the board of directors, without any assistance from outside industry professionals.
For example, the community does not work with an objective actuarial firm to help make sure residency contracts are properly priced or that appropriate reserves are being set aside to meet future care obligations to residents. Both are red flags for the community’s long-term financial health.
Additionally, the community is not using a reliable methodology or software program to financially qualify new residents, according to this staff member. Financial qualification of prospective residents helps limit the financial risk for CCRCs since some offer healthcare services at a discount and often provide financial assistance if residents exhaust their assets on care costs.
Although I didn’t ask specifically, I wonder if the CFO of the community is involved in this resident qualification process. A CFO manages all financial matters related to the community and therefore should be involved in the financial qualification of prospective residents. Conversely, a volunteer board of directors’ job is governance and oversight; they should not be involved in such day-to-day financial decisions of the organization.
Finally, I asked this CCRC staff member if residents serve on the community’s board of directors, or if there is a strong residents’ council that has a representative voice on the board. Apparently, there is one resident on the board, but it is more of a symbolic seat rather than a true proxy to advocate for the rights and opinions of fellow residents.
I have to admit: I was deeply troubled by this conversation. After reflecting on it, I began to wonder: What are residents (and well-meaning staff) to do if the board of directors at a non-profit CCRC has gone “rogue?” What if the board’s decisions are causing harm to the community and the board members don’t even realize it? What if the board either is unaware of problems altogether or is too influenced by a particular board member to push for better practices?
The impact on a CCRC’s financial health
If you are researching CCRCs for your retirement living future, be sure to inquire about things such as the make-up of the board and management team, their professional backgrounds and experience, board terms, and how residents are represented on the board.
It’s not a question a lot of people may think to ask, but it’s a topic that can have lasting ramifications on how a community is managed and their financial viability. And since moving to a CCRC is an investment in your future, you want to have complete confidence in the long-term fiscal health of the community you choose.