Appalachian Perspective: Well-Spring President & CEO Stephen P. Fleming

Hosted by Appalachian State University's Chancellor Kenneth E. Peacock, Appalachian Perspective cable television program has featured prominent and interesting North Carolinians, the university's leading academic and public service programs, and other topics of statewide interest. Episodes air across the state on cable operators' community access channels. The 30-minute program is a production of the university's Office of University Communications.

Creating retirement living that is shaped by personal choices, not circumstances, has been the goal of Stephen Fleming. As president and CEO of Well-Spring Retirement Community in Greensboro, he has created innovative partnerships to better serve older adults and his organization has won national awards for quality of services and workplace culture.

Transcript

Chancellor Ken Peacock: The population of Americans, age 65 and older, is 13 percent. It is projected to reach 20 percent by the year 2030. Creating retirement living that is shaped by personal choices, not circumstances, has been the goal of Stephen Fleming. As president and CEO of Well-Spring Retirement Community in Greensboro, he has created innovative partnerships to better serve older adults and his organization has won national awards for quality of services and workplace culture. We'll meet this intriguing Appalachian graduate coming up on Appalachian Perspective.

KP: Welcome to Appalachian Perspective. My guest today is Steve Fleming, President and CEO of Well-Spring Retirement Community in Greensboro. Steve, welcome. It's good to have you here.

Stephen P. Fleming: It's a pleasure being here, Chancellor.

KP: I understand you were a graduate, first, of Chapel Hill and had a degree there from public health, health policy and administration and you had planned to work as a hospital administrator, but the path took a little different course. What was the reason for that? What happened?

SF: Well, Chancellor, coming out of Chapel Hill I really did want to be a hospital administrator. At one time in my life I thought I wanted to be a physician. So, I said, what better career than to combine business with medicine and be a hospital administrator? And a funny thing happened on the way to that path—my grandmother became ill. She was an older adult and my mother and father happened to be away on a trip in Europe visiting my sister at the time, and it was left to my aunt and I to move my grandmother into a nursing home. And that experience compelled me to look at a career in serving older adults. And 27 years later, here I am, and I hope we're doing some great things serving older adults.

KP: Well, you certainly are. After your Chapel Hill days, you came to Appalachian, right?

SF: I did. I did my MBA the hard way, as they say, through an evening program. It was a great program that Appalachian was able to offer back in the mid/late 80s, when the professors actually came down the mountain and we were able to go over to an annex campus in Winston-Salem. Back in those days, it was a lockstep program—so, if you missed a class, you were in trouble because you really couldn't make it up. We started the program with 60 and I think we graduated 18. So, it was quite an attrition rate there because of the rigors of the program. But it was an excellent program that I had here at Appalachian and it really helped me further my career in older adult services. And, as I say, today I find more affiliation with Appalachian because of the experience I had with my MBA program.

KP: Well, you certainly have a great product in Greensboro, and you've been quoted as saying that "to run a facility like this, it's part business and part social work." Talk a little bit about that.

SF: Well, Chancellor, one of the things I always like to compare the position to is almost being mayor of a small town. Obviously, you have to have business acumen for what we might term the profit and loss statements, but you also have to have the ability to interact with other people—primarily residents, but staff as well, because you obviously have to get the job done through and with those individuals. So, one of my strong suits has been my interpersonal skills and my ability to use that, in addition to the training I had here at Appalachian and at Chapel Hill to prepare me for the business side of running continuing care retirement communities and now other aging services. It is part being almost a social worker in a sense of being able to listen to residents—listening skills are at a premium in what we do—and the ability to understand their needs, and the ability to understand that older adults have just as much to offer at 80 as they did when they were 40. So, how do we provide them as much ability to run their own affairs, but yet keep the operation ongoing for a new generation of older adults that may come later on.

KP: Well, anywhere I go in North Carolina, when I mention Well-Spring, people know about it, they have a relationship to it somehow, and it has that quality name to it. How have you done that? Brag a little bit—what makes it different? There are lots of retirement communities, lots of retirement facilities, but as the numbers show, we're getting older in America. So, what have you done to really set this apart from so many others that we have?

SF: Well, Chancellor, first of all it begins with a fantastic board of trustees—just like you have here at Appalachian. We would not be where we are without a core group of 18 members on a board who are dedicated to filling our mission, and our mission is very simple—and that's to exceed the need of an evolving population of older adults. And when we say "exceeding the needs", that means that we have to strive to be the best. I'll compare it to the national championships in football that Appalachian has been able to garner and what coach Moore's done with his program. It does begin with leadership—both with the board and ultimately with CEO, CFO and others within the organization. So, it's a commitment of all individuals to strive for excellence, to exceed the needs.

SF: And some of the ways we've done that over the years is trying to understand that our resident population—we are driven not by margin, we are driven by the mission, and we're driven by the fact that our individuals' satisfaction will make us a better organization. We'd like to say that we've earned the reputation through our residents' satisfaction scores; we take great pride in utilizing an outside source to assist us with that satisfaction, those satisfaction scores. And one area where you might say is the hardest in retirement community living, in terms to satisfy residents would be in the dining services arena.

SF: And our scores are in the top 1 percent in the nation, out of over 300 accredited communities. So we're quite proud of that, but not only is it our dining department, but it's our nursing program, it's our environmental services, our maintenance program—all those working together, just like, again, just like a football program—not only do you have to have a great quarterback and running backs, but you must have a fantastic offensive line and defense to go along with that, to make it all happen. So, we just have a dedicated group of individuals, and it starts with our board of trustees.

KP: Well, Steve, you've definitely made it happen. Several years ago when we started talking about a professional relationship between you and Well-Spring and our medical community and, to some extent, Appalachian, you invited me down to spend a little time and spend the night at Well-Spring. And, actually I kind of resisted that, and thought, "I don't know if this is a smart thing to do or not," but I did. I went down and I spent some time there and you mentioned the food—and I had food that evening and it was wonderful. It was as good a meal as I've had anywhere. But you eat, and then you walk and you can go to a lounge, there's a library—it's a top quality facility. You have a lot there to be proud of.

SF: Well, thank you Chancellor. You didn't know it, but you're part of our Try it, You'll Like It Program. That's a formal program that we actually have at Well-Spring where the individual comes in, older adult comes and tries it out for free and finds out that there's a lot more to retirement living than going to an old folk's home, as what the traditional, unfortunately, stereotype plays into as we get to be older adults. But continuing care retirement living is much more than that, and you were able to experience that. It is fine dining, it is a social life.

SF: And one of the primary things that we try to initiate with older adults in a community setting is the social interaction. There's so many things that you can substitute in the home now—we have home- and community-based services that do a number of wonderful things that we're able to do, but one thing that we cannot replicate, and that's interaction with others. And isolation will work on not only our mental health, but our physical health, quickly. And therefore, older adults need to have socialization. There are a lot of parallels between college students, and the socialization that occurs on a college campus can be had in a retirement living campus as well.

KP: Well, this summer you've been working and traveling around some in the High Country talking about this new relationship and perhaps a new community that would be a continuous care retirement community here in the High Country. So I want you to talk a little bit about that and what steps, what do we have to do, I mean, I hear—and I've heard this for years—that people come to me and say, "Why don't you do what they do in Florida," and "Why don't you do what they do in..." and they'll just fill in a city or state. And that's not really a part of a university's mission, but partnering and trying to increase jobs and all that is part of our mission and goal. So talk about what you're thinking, what's been going on and what you're now announcing.

SF: Well, Chancellor, one of the things we've been working with with the hospital system here, Appalachian Regional Health System, and Appalachian State University, is the possible development of a continuing care retirement setting in the Boone/Blowing Rock area. As you are aware and your listeners and watchers may be aware, Appalachian Regional Health System is planning to relocate Blowing Rock Hospital and one of the criteria for developing a continuing care retirement community is you have the access, or the accessibility, to a skilled nursing facility. And the post-acute care facility that Appalachian Regional Health System is planning would be an ideal situation for a continuing care retirement setting. Obviously, that has to occur before the continuing care can occur.

SF: But one of the things that is lacking in the High Country is population density. Normally, continuing care retirement communities are in areas which may contain over 100,000 or more people. And we do not have that in terms of a full-time resident population here in the immediate High Country. However, we have some things that are going for other parts of the country do not have. First and foremost, the beauty of the mountains and the four seasons of the mountains. Then, how could we not mention Appalachian State University? The cultural opportunities, athletic opportunities, lifelong learning opportunities that would be available for residents who might live at this continuing care retirement community, we believe would attract not only individuals from the High Country and the state of North Carolina, but other parts of the country. I mean, Boone is a hidden jewel and we know that.

SF: Sometimes we, I know I grew up in Surry County and I can remember the days of the 2-lane road up to Boone and I know some of the folks in Boone may not like the fact that we have a 4-lane road coming into town now, but what a gateway for a lot of the rest of the world to discover this part of the world. It's amazing how other continuing care retirement communities are very successful in what I would say more inhospitable climates than Boone. You know, when you talk about Boone outside of the High Country proper, you hear a lot about, "Well, how are you going to deal with the winters? It's cold!" Well, most of the rest of the country north of North Carolina are very cold, and that's where most of the population of the United States lives.

SF: So, it's not something that we don't like we could overcome as part of the continuing care setting. Some of the things we're doing right now, unlike a manufacturing facility who can, what I call, fly under the radar screen for a while, while they're scoping out potential locations... it's very difficult for us to do that as we understand the potential of a continuing care retirement setting here in the High Country. We must go out to the public and garner some feedback. We have to ask some questions of individuals about certain things such as price, such as amenities and whether the community will be a fit for the greater community of the High Country.

SF: These things now—continuing care retirement communities—are substantial investments. Gone are the days where you can put very little dollars into a continuing care retirement community and go borrow the rest of it through a bond issuance. In these times we're having to invest substantial dollars on the front end before we can actually go and access the bond market. So, while we might like to say this could be a great setting for a continuing care retirement community, we also have to be cautiously optimistic about the real economies that are out there for, not only the micro and the macro economies that are availing themselves to individuals, and how many would actually make the move to a Boone/Blowing Rock continuing care retirement community.

SF: Normally, it take about 3-5 years to develop one of these continuing care retirement communities and, as I said, they can be over $40 million in investment for the initial buildings and development. So, it's not a small proposition and so we want to do our homework and that's what we're doing right now—doing a lot of research in conjunction with the health system. We are holding a few private town hall meetings so that we get a better sense of how the public might accept a continuing care retirement community here in the High Country.

SF: And also we will be sending out written questionnaires—folks can be looking for those in their mailbox within the next month—so that we understand what their interests may be about building a continuing care retirement community here. But, again, all this is hinged on the fact that Blowing Rock Hospital is relocated to a new site because that's one of the things that has to occur, as we say, for the ball to start rolling down the hill.

KP: OK, Steve, the location of this facility is planned to be within the town of Blowing Rock, is that correct?

SF: Chancellor, that's correct. And my understanding is this will be an annexation by the town of Blowing Rock and will come under the jurisdiction of the town of Blowing Rock.

KP: And I have heard, and I was out of town at the time this happened, that they have approved water and sewer for the project, so that's a positive sign that things are moving on, that's good.

SF: That's a very positive sign. You know, first of all, a project of this nature could not take place without the water and sewer, for one. But these projects are great for municipalities. They have low impact on schools, they have low impact on traffic, they have low impact on police. So, it's a win-win situation for most municipalities so I would think the town of Blowing Rock would welcome it, as would, of course, the town of Boone—to have a continuing care retirement community within—almost sitting between the two towns.

KP: Yeah, low impact in terms of services, but—from what I'm reading—it's high impact on the economy, because you mentioned a while ago that construction is somewhere around $40 million. Well, that's a pretty significant construction project with the economy we have today, and I believe, from the time I heard you speak at one of the first meetings, that the annual payroll is around $10 million.

SF: Can be in excess of that. The annual operating budget can be up to $20 million for continuing care retirement communities. And, as you say, that's part of that win-win. Economic impact is great—can be 200+ jobs created, not to mention the temporary construction jobs that are created when the facility is first being built. So, it's one of those things where the town doesn't have to put a whole lot into the project and the project gives a whole lot back to the town.

KP: Creating 200 jobs—that's great! You know, we need that. The state's all about jopbs at this particular point, and should be. So that's a very positive thing for us in the High Country of North Carolina, for sure.

SF: Well, we would definitely love to see it, and as I say, once the post-acute care facility is built, which will add jobs in and of itself, the continuing care retirement community could come right behind with even additional roles. And these are multidisciplinary jobs in terms of not only what you think of nursing, but you have things such as dining services, culinary services, you have administrative jobs, clerical jobs, maintenance jobs—it sounds like we might be competing with Appalachian State for some workers.

KP: Yeah, we'll be providing you with some people to do all that work.

SF: That's true, that's true, you will be. Not to mention the fact that this would be great for students. Obviously, at Well-Spring in Greensboro we employ 16-22 year olds in mass in our dining program. Many of them stay with us for six years. They start when they're 16 and they finish when they're 22 when they're coming out of college. And that's a great thing to observe as CEO, is to watch these young people interact with older adults. That in and of itself, and many of these individual young folks come to me and say, "This has been such a rewarding experience—I love this job." Chancellor, I sign everyone's performance review at Well-Spring. I'm signing last, if you will—and they've had the opportunity to rebut or confirm maybe their performance review. And it's amazing the individual responses I receive about how they love working with the residence and how they love what we've created there is a community and we hope to do that here in the High Country, and what better source than Appalachian State students to do that.

KP: What is, you know, if you locate here, or you will locate here when you get it all done, what's your closest competition?

SF: That's a good question. Really, one of the things that attracts us to the High Country is that there are no continuing care retirement communities in this area. We have other aging services providers in the area. We have those that provide both skilled nursing and maybe even assisted living and we have home care providers. And they all do a wonderful job, but the idea behind the continuing care retirement community is we bring that all on one campus. We really don't have anyone in this immediate area—you have to go down the mountain for that, as they say.

SF: The Hickory area has continuing care retirement communities, as does the Winston-Salem, Greensboro, High Point, Charlotte areas, Asheville—again, primarily located and more major metropolitan areas, but can be located in smaller towns, especially those connected with university settings. I was fortunate enough to lead a community in Hanover, New Hampshire at Dartmouth College. We had 9,000 people in Hanover, so less than here in Boone, and it's one of the most successful communities—maybe second to Well-Spring—in the nation.

SF: So, it can be done, there's a very successful community in Lexington, Virginia. One of the former Southern Conference schools, VMI, that's located there, as well as Washington and Lee. And, again, that's a very small town. Oberlin, Ohio... I can think of many other setting where the towns are small, but people can still have a continuing care retirement community there—and, again, part of that is due to the university affiliation, and here, the icing on the cake is the health care system affiliation that this would entail. So, short answer: there really is no other continuing care retirement community once you get above 1,100 feet.

KP: So, no real competition or significant competition. So the market's not saturated with this and with the possibility of creating maybe 200 jobs or more, $10 million payroll and $40 million in terms of construction, it just sounds almost too good to be true. So, what are the steps, what do we have to do to get you to come up here with a shovel?

SF: Oh, well, it's not just me, first of all. I mean, that's the great thing about what we're trying to pull together here. This is going to require partnerships and cooperation between at least three entities. And, again this is Appalachian Regional Health System and Appalachian State University. And, for the three of us to work together to make something happen, what has to occur at this point is, as I said, we continue the exploration and the research and we will reach a point later in the year, more than likely, where we make a decision as a group: Do we continue to invest some dollars, is it worthwhile to continue the project forward, or do we not? And then once we make that—that's a decision where we begin actually pre-selling potential slots in the continuing care retirement community.

SF: One of the things that we're going to be testing as part of our research is what is this retirement community? Is it what we call an entry fee retirement community, is it an equity retirement community, or is it a rental retirement community? All of those things we'll be testing in the research. And once we decide if... which way to go, we'll have to do some pre-selling of the particular setting. So, if we were to go—let's say the traditional route—which is to issue bonds to the North Carolina Medical Care Commission, much like a hospital would issue bonds, and in some cases very similar to what university bonds are initiated... if we... were to go that route, we also would have to have presales of 70 percent of the units.

SF: So, for example, we had a 100-unit continuing care retirement community. And these 100 units could be free-standing homes, such as we may call them villas, or they may be congregate settings, more like condominiums or apartments. So, if we had 100 of those, we'd need 70 percent of them to be pre-sold with a 10 percent deposit if we went the entry fee route. If we went the rental route, you don't have to do the pre-sales as much, but you do have to have the pre-leases in place. So, regardless, there's the big time frame issue that comes into play. Because once the three of us decide that this is a great thing for the High Country and we're committed to it, then we have a period of time where we have to undergo these pre-sales and that may up to 18 to 24 months.

SF: And so, with the economy the way it is, we do still have the ripple effects from a downturn in the real estate market that is affecting older adults' decisions to move to continuing care retirement communities. We believe we'll come out of that trough in the very near future and we hope we're on the rising tide of the trough—not that we're at the bottom of the trough. We believe that timing will be on our side as well. So the next six to eight months are very critical for this project.

KP: I don't know whether you have picked up on the excitement, because I live here, that I have sort of sensed from this, from the word just getting out. People have said they wanted to do this for a long time. So I think there's a tremendous interest. I don't see any reason why this won't be successful. I know that we have to document this, you've got to have signed contracts and dollars in hand, I get that. OK, trick question: how old do you have to be... what's the youngest resident that you have at Well-Spring in Greensboro?

SF: What's the youngest resident we've had? Well, one of you has to be 62. But the youngest we've ever had is 58. So, we did have one that was 58 because there was another spouse that was older than that. But the average age at entry for all continuing care retirement communities is 78.

KP: 78?

SF: 78. That's nationwide. So, we have hit that right on the nose the last ten years, except last year when we bumped up by a couple years—we were into the eighties. So the average age at entry is 78, nationwide. But some communities can attract, and we would expect this community could attract a slightly younger clientele. And the reason being, and it's all relative as you know, Chancellor, that today's 80 is yesterday's 60. So, it's all relative now.

SF: One of the things that we're seeing is we are beginning to see that generational shift from the G.I. generation, the silent generation to the baby boomers. And the baby boomers want nothing to do with growing old—at least in the traditional sense. They want to be more active. They want their setting to be much more vibrant. I don't know of many more settings that are more vibrant than right here in the high country—for the hiking, the biking, the rafting—all the things that you can do to stay young. The skiing—not to mention the snow skiing—it's right here for older adults to enjoy.

KP: Thank you very much for being here today and let me know what we can do. We want to see that shovel, I want to see you up here with a shovel in your hand as soon as possible. And thank you for being on Appalachian Perspective.

SF: Chancellor, thank you for having me. It's been my pleasure.

KP: Thank you.

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