A “Crazy Idea” for Building a Reputation for Transparency and Trustworthiness in Continuing Care Communities?

A bit of background helps. Scott Townsley, a lawyer, academic, and business consultant with 40 years of experience in senior living operations, had been reading disclosure statements on file with the Pennsylvania Insurance Department in the wake of a couple of key insolvencies. He observed that a significant number of the CCRCs were failing to submit key data to the Department or their numbers just didn’t add up when it came to reporting on mandated reserves.

In recent months, Scott and I have discussed the recent changes in North Carolina’s CCRC law, influenced in part by financial woes at a long-standing NC community, Aldersgate, that had once commanded respect in the market place. But somewhere along the way, it began pouring money into new projects that seemed unsound to existing residents and proved to be unsound over time. New management moved in. North Carolina’s new law, a product of long discussions between residents, CEOs and key regulators from North Carolina’s insurance department, rewrote key provisions to require better documentation of financial details.

Scott is a lawyer but he knows that laws can only go so far. We both recognized that regulators have a monumental task if they carry the solo task of catching bad plans before financial mistakes become unrecoverable. But residents may be better positioned and motivated to stay alert.

Scott then explained to me how he had a “eureka” moment. Why not encourage residents and CCRC management teams, including Boards of Directors, to share information on a regular basis? Take advantage of residents’ ears and voices on what would attract them or discourage them in supporting plans for expansion or similar costly events.

Here I am sharing Scott’s own words on his “crazy idea” as captured on his blog. Based on his own forty years of watching CCRCs in action, he says:

“There’s a very effective way to address the call for more transparency in the CCRC field, when it comes to residents and prospective residents. Sure, Disclosure Statements work, to a degree, but trust is the missing element in many instances. How to ensure trust? Require, by statute or regulation, that Boards of CCRCs must meet, in the open, at least quarterly. By ‘in the open,’ I mean in an auditorium, for example, open to all residents. . . .”

He explains: “I’ve seen it work [in proactive CCRCs he has worked with]. Initially, many residents showed up for the board meeting, but over time, it became old hat.” A core group of residents started focusing on the key numbers, including a proposed budget or any proposed rate increases. Scott acknowledges that some topics might be better handled by executive sessions of the Board, but his experience leads him to believe there really isn’t much that he would consider “top secret.”

What happened when Scott Townsley made this direct proposal at a June meeting attended by CEOs and industry-aligned spokespersons? Some of them expressed immediate, strong, negative reactions, and as Scott noted, “one CEO called it a crazy idea.”

Scott responded, by pointing out that in almost every news story or headline about the CCRC field for the last decade, there were references to the changing marketplace for CCRCs and the need for greater confidence in the industry on the part of future residents.

For more of Scott Townsley’s thinking, I recommend reading the full text of his most recent Third Age Blog Post, part of a series he has placed on LinkedIn where he writes on “Stories We Could Tell.” It is Story #65 – “Crazy Ideas.”

And by the way, I think Pennsylvania’s Insurance Department just might agree. In 1984, the General Assembly of Pennsylvania enacted its first regulatory scheme and it signaled its intent to ease a history of nontransparent, tangled finances. In Section 3215, the legislators provided that the “board of directors, a designated representative or other such governing body of a continuing-care facility shall hold quarterly meetings with the residents . . . for the purpose of a free discussion of subjects which may include income, expenditures, and financial matters . . . and proposed changes in policies, programs and services.”

In other words, as early as 1984, Pennsylvania’s legislators were already leaning into the “crazy” notion that transparency and direct communication can enhance trustworthy Continuing Care enterprises. But perhaps, in 2026, Pennsylvania needs to eliminate “designated representatives” as stand-ins for the Boards.