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The assisted living industry shrinks as the need for it grows

Does rising cost parallel consumer distaste for long-term care? Perhaps this caught your eye – the NY Times article on escalating long-term care costs noted that the assisted living industry, according to its trade association, ALFA, now has a national resident population of 730,000, that the move-in age is now 87, and that the average time of residence is 2 years. As has been noted several times on this blog, if the move in age is rising, the industry must be continuously marketing its capacity. Tours with those not yet in need must be painful -- the assisted living resident increasingly resembles the nursing home resident of yore -- and at the same time dementia care costs have risen to their current daunting average level. Furthermore, dementia care is the most profitable service -- and fastest growing offering -- in today's assisted living industry.

As lives lengthen, oddly, the industry shrinks. But despite lengthening life expectancy for those who can afford assisted living, the looming need for dementia care, it was just two years ago at the peak of the recession that there were more than 900,000 residents in assisted living. If that decline in resident population is correct, can it be that the prospective consumer – the family – simply does not want to buy the product? How can that be in a time when the 85+ population is growing, the numbers of seniors with dementia is growing, and managing home care workers is, as the Times article indicates, such a challenge?

Perhaps a retail customer service mission is required.  A nurse friend of mine told me how on a recent Sunday she visited an aging friend living in an assisted living memory unit. She found the aging resident wheezing, sitting without shoes and eyeglasses. My friend worried that there were too few aides present and that the staff was confused about the resident’s current ailment and related medication. After finding shoes and eyeglasses, she asked to check the prescribed medications, it turned out that the resident was now on a cough medication that she had been taking for many days. My friend knew that the family (temporarily out of state) had not been told about it. Was this a good retail experience? Would my friend or the resident's family provide word-of-mouth referral? For that matter, is excellent customer service and an outstanding retail experience the marketing message to consumers of an assisted living memory services? Or is word-of-mouth spreading the message about the industry's warehousing of frail seniors, about residents left with too few low-paid aides and about nurses who are too pre-occupied with busywork to be aware of the residents or oversee the work of aides? And if not the nurse, then who?

Caring for seniors means providing excellent service that is priced right. There are numerous theories, from inside and outside observers, about the self-inflicted reasons for the shrinking assisted living industry. The battered housing market and shrinking value of retirement assets are often bemoaned as barriers to residents moving in at a younger age. Some note the need for better marketing, better food, improved staff training, more engaging activities, social network smarts, and of course, providing ever-more-attractive property. But is great care marketed? Do we know what it is? For example, is this new report about dementia and care quality communicated across the assisted living industry so that the industry can rationalize its pricing to customers? This is an industry that publicly asserts an aversion to federal regulation. Perhaps by following best practices for quality care that focus on the customer’s experience, perhaps counting a visitor's observation as a proxy for quality of service for memory-impaired clients, then maybe the assisted living industry will reverse its frog-in-cold-water trend of slowly shrinking. Perhaps it could then lower the move-in age and be known as an industry with a reputation for excellent care and easily observable quality of life that visitors will recommend and refer.

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Comments

Laurie,

I couldn't agree with your article more. I'd like to add that still another reason that A.L. is shrinking is that Assisted Living as a term now has the same stigma as Nursing Home. People needing assistance go to "Independent Living Plus" (home care or home health on site). It might save them some money for a little while, but inevitably the number of hours the aide will be in the household creeps up to even the costs out with A.L.. Or they fall, break something serious, like a hip and then straight to skilled nursing...

Carole

I also agree. Having worked in both assisted living and home health care, I can tell you that staffing levels aren't what they should be in facilities and staff is underpaid and receive little to no benefits in home health. The answer will be market driven when the 78 million baby boomers start making their choices of where and how to live during their retirement. They will demand better care and more in-home choices. Aging in place will dominate. Smart retirement centers will start offering services to people in their homes and transition them to their facilities in those final 2-3 years. Services for dementia will also need to increase as the number of people with Alzheimer's Disease starts to climb. More regulation is inevitable. If you can't self-police, the government steps in.

Yes I agree -- we are seeing more individuals that are borderline nursing home care
with many facilities wanted to keep their residents no matter what their status!

Great article and valuable resource site.

I don't think we need any more assisted living homes at this time because once the baby boomers are gone, there would be a ton of empty assisted living communities, just as there were hospitals, and schools that have had to consolidate after the boomers went through the cycle of life. The baby boomers and their parents are staying home way longer. I for one, cannot ever afford to live in the great assisted living homes that I have worked in. What we need is more affordable home care, shared housing, housing with services which are non-licensed but with leased rooms and incoming services. This is a great time, as when the assisted living homes first started up, for entrepreneurs to get creative.

Janice you brought up a good point - cost. Many of the people I have spoken to have said that they could never afford to live or place their parents in any of the assisted living facilities in the Worcester, MA area.

I understand the reason for the steep pricing; however, it would be nice if the services and apartments were more affordable because local housing authorities fill up fast and have long waiting lists and there is a need for affordable elder housing.

Great post!

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