32 Annals of Health Law Vol. 25
with guaranteed access to CCRC residential and health services, for which the resident pays a monthly fee, the amount of which depends on the living space and services needed.184 CCRCs have been experiencing many of the same kinds of financial risks in the past few years that have incentivized other types of healthcare providers to engage in consolidation activities, as well as risks more unique to this sector of the health industry.185 Notable bankruptcies and restructurings have characterized the CCRC industry over the past decade.186
[Most] successful CCRCs have a mission-based sponsor that also is well- heeled and capitalized. Whether it be a faith-based or a fraternal organization or the beneficiary of some other sponsor, it appears that staying power in the CCRC industry resides with those who independently have the money to continue to support the difficult margins that are being experienced . . . 187
Consolidation in the CCRC business place might impact actual or potential consumers in a number of ways. The consumer’s choice of CCRC would be impinged by a smaller number of these providers competing for the consumer’s business, and access to any CCRC in a particular geographic area might be negatively affected by voluntary or involuntary closings that diminish the total number of spaces available. Scarcer available spaces could lead to less attractive contractual terms (for example, higher entrance fees and monthly payments, or less coverage) for consumers qua purchasers who are forced to compete for those finite but desirable spaces. At the same time, if consolidation puts remaining CCRCs on firmer financial footing and accordingly prevents closings and bankruptcies, the financial interests of consumers who have invested an entrance fee in a CCRC would be better protected.
The current, and probably continuing, consolidation of health services providers, producers, and sellersof healthcareproducts, as well as third-party payers for health services and products, inevitably will exert a variety of impacts on healthcare consumers generally and within specific contexts.
184. Id. 185. Id. at 8–11. 186. See generally George R. Mesires, Lessons Learned from Senior Housing Bankruptcies, 33 AM. BANKR. INST. J. 26 (2014) (describing that certain CCRCs were hit particularly hard by the recession, although the senior housing industry stayed generally resilient, and describing the challenges presented by the current economic downturn to identify and avoid future challenges in a cyclical economy). 187. Brandt & Troop, supra note 1, at 69.