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The Future of Assisted Living

May 1, 2008
by Maureen Hrehocik, Executive Editor
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Heeding the call of consumer demand

Assisted living has become the fastest-growing long-term care option for those who want to live independently with assistance, according to the Assisted Living Federation of America (ALFA). With this growth comes a host of challenges including affordability, state and federal regulations, oversight, disclosure, and the constantly changing models of care. Consumer demand and focusing on the individual has become the leitmotif of assisted living. In order to assess the current state of assisted living, Long-Term Living's Executive Editor Maureen Hrehocik spoke with Assisted Living Federation of America's (ALFA) President and CEO Richard Grimes and The National Center for Assisted Living's (NCAL) Executive Director Dave Kyllo.

ALFA represents companies operating professionally managed assisted living communities for seniors and advocates choice, quality care, and accessibility for people of all income levels. NCAL is the assisted living “voice” of the American Health Care Association, the nation's largest organization representing non-profit long-term care providers.

Hrehocik: On today's continuum between skilled nursing and independent housing/services, how does assisted living define itself?

Grimes: The so-called “continuum”—from home care to independent living to assisted living to nursing homes—is entirely an artificial creation of business and government. As people age, they do not make decisions to move along some kind of continuum; they make decisions about how and where they want to live. Assisted living is one option that provides resident-centered care in a residential setting to meet the needs of the resident. The philosophy of assisted living provides for freedom of choice, independence, and the opportunity to live and age with dignity, privacy, and respect. This philosophy supports the resident's decision, not the government's decision, to live in the setting of his or her choice. We use terms that support this philosophy and we avoid terms that conjure up institutional forms of long-term care: assisted living has residents not “patients,” communities not “facilities”; our communities contain a number of apartments, not a number of “beds”; our residents are not admitted or discharged, they move in and they move out. Visitors check in at a front desk or a reception area—not a nursing station.

Kyllo: Assisted living prides itself by focusing on what the customer or the consumer wants and working to achieve that level of expectation. Assisted living is dynamic and ever-changing and assertively works to meet the needs of the individual. If we step back from assisted living and look at the entire continuum, it's changing at a rapid pace. Nursing homes have become post-acute centers and rehab centers for a vast number of people they serve. Assisted living has now become the predominant site of service for the traditional senior population—those in their 80s and beyond.

Hrehocik: Has assisted living emerged from the “overbuilt” era and started to grow again?

Grimes: While the full impact of the recession has yet to be realized, assisted living seems to be on track for sustainable growth. Moreover, there are huge opportunities for substantial growth depending on our industry's collective ability to inform and educate the public about the many available noninstitutional forms of long-term care, such as independent and assisted living. Consider this: There are roughly 200,000 Americans aged 75 to 80 with disposable incomes of about $35,000 who enter the senior living market every year. Yet, of this cohort of 200,000, senior living is currently capturing only about 20% or 40,000 new residents. The fear of moving from one's home to an “institution” is probably the biggest single obstacle for most of those in this available market. As people learn that assisted living is not an institution, provides a very attractive lifestyle, and can be more enriching than being alone at home, we expect more people will choose this option.

In terms of the current market, we are seeing some potential residents starting to wait a little longer to move into assisted living—perhaps to see if the selling price of their homes will recover. For example, someone's home two years ago may have brought $600,000; today it may only bring $460,000. This may be someone who feels they have “lost” money even though they bought their home 40 years ago for only $20,000!

Kyllo: Assisted living continues to expand and develop. What we have today is modest growth and smart growth. The philosophy used to be, “If you build it, they will come.” We now know that's not the case. Today we ask, “If we build it, will they come?” We strive to answer this question through market research and a better understanding who it is we can serve and how we can best serve them.

Hrehocik: How are providers addressing aging-in-place and affordability?