Two months ago, I penned a column called “The Future Is Now.” In it, I painted a challenging environment for nursing homes, one that would clearly tax their ability to accommodate, innovate and, ultimately, survive. Indeed, I suggested that the future for nursing facilities “doesn't look all that auspicious.” In sharing that column with colleagues, both past and present, I've been taken with the sigh of relief emanating from those who choose to throw their lot in with assisted living. Not that they didn't see themselves as long-term care leaders more than capable of meeting the challenges confronting nursing homes. Only that they had chosen to confront those challenges, not by grappling with them, but by redirecting their energies to the “new paradigm” of facility-based long-term care—assisted living. Well, my friends, this column is for you.
And yes, it is true that assisted living has enjoyed an almost meteoric rise in public acceptance and utilization. Almost too much so. Its popularity in the long-term care marketplace was such that, for a brief period just a few years ago, product supply clearly exceeded demand. Occupancy levels dropped precipitously. And many companies and individual facilities were tossed onto the dustbin of economic history. But the beauty of free enterprise is that markets do self-correct. Indeed, bankruptcy is very therapeutic (except, of course, for those actually immersed in Chapter 11). It adjusts price, supply, and demand almost painlessly (again, other than for those actually experiencing the pain).
Assisted living occupancies are, again, approaching historic highs. As pointed out recently by the board chair of the National Investment Center for the Seniors Housing & Care Industries (NIC), “Seniors housing is producing very attractive returns. Investors in Emeritus Assisted Living [for example] enjoyed a 403 percent return in a year.” Industry-wide, mean occupancy is again pushing 90% (compared with 88% in nursing facilities). Indeed, enthused an NIC flyer, “The seniors housing and care industry has never been hotter.”
So, why worry? Well, to understand why you should worry, you have to delve just a bit into the history of assisted living. You have to understand the genesis of its popularity. Yes, assisted living did attract a following among those looking for a more palatable long-term care service. But were we really seeing increasing acceptance on the part of seniors (and their families) of assisted living as their product of choice? Or is it more likely that assisted living was seen simply as the lesser of two evils when compared with nursing homes? Not a question we might wish to confront. But one that has to be grappled with if we are to effectively address (and successfully accommodate to) the future of assisted living.
I mean, if there's something inherently attractive about assisted living, not just that it's relatively more palatable when compared with nursing facilities, then one course of action might be the most appropriate. But, heaven forbid, if assisted living is desirable simply as an alternative to nursing homes, then an entirely different path might be called for. You might not like the question, but failure to address it will pretty much doom to futility your strategic choices.
Again, like it or not, what we might really be talking about here is an overwhelming popular aversion to facility-based care, no matter what the setting. If the countless focus groups I've conducted have taught me anything, it's that seniors recognize—but don't wish to be confronted with images of—their impending frailty. Say what you will about public perceptions of nursing homes, I have always argued that the average senior's aversion to them stems less from the issue of facility quality than from an unwillingness to confront the realities of aging. A facility whose primary purpose is to deal with the frailties and illnesses accompanying aging is not likely to be embraced by its customers. Forget what it's called. I would emphasize that I include assisted living in this analysis. Assisted living facilities are, after all, not all that different from nursing homes in terms of their customers' frailty.
I've taken my share of brickbats for having offered some years ago a definition of assisted living as “a nursing home with a chandelier.” But the phrase was never meant to belittle assisted living. Rather, it is simple shorthand for the reality that assisted living facilities deal with exactly the same residents as did the nursing homes of yore (then called intermediate care facilities, or ICFs). Thus my description of them as “nursing homes.” While assisted living facilities have had to attract residents in a highly competitive market, nursing homes did not—thus the “chandelier.” The customers remain the same—the same moderate level of ADL dependencies, the same incidence of cognitive impairment. While preferring the ambience of assisted living (again, the chandelier) over the institutional flavor of the traditional nursing home, most customers still see assisted living for what it really is—a healthcare provider whose purpose lies in caring for the elderly and the needs attendant to aging. Changing the corporate logo from “assisted living” to “senior living” doesn't change that.