Assisted Living Facilities: A Regulatory Perspective

This week the National Center for Assisted Living, the assisted living voice of the American Health Care Association (AHCA) which represents 2,700 non-profit and proprietary assisted living and residential care communities in the nation, released the 2012 edition of "Assisted Living State Regulatory Review." This report is the only annual resource summarizing state assisted living regulations across 21 categories.

To understand the report one needs context, and a 2011 federal report on the industry coupled with the US Senate Special Committee on Aging's ALF roundtable (here and here) convened that same year, can help with that. Among their findings were:

  •  37% of ALF residents receive assistance with three or more activities of daily living (i.e. eating, bathing, dressing, grooming, etc.)
  • 42% have Alzheimer's disease or other dementias.
  • 39% of facilities provided skilled nursing services by registered nurses or licensed practical nurses and 13% of residents received these services.
  • Although many federal laws impact assisted living, oversight of ALFs occur primarily at the state level.
  • 25% of present residents in nursing home could be cared for in lower care settings (or 375,000 out of 1.5 million persons currently living in SNFs).
  • The mean income of a person living in a proprietary ALF is under $25,000 per year in income. Usually, ALF residents use the equity from the sale of their home to pay there expenses in ALFs.
  • Average length of stay in an ALF is 2-3 years.

Regulatory Review Summary:

  • 16 states reported making statutory, regulatory, or policy changes impacting assisted living/residential care communities. Illinois was not among those states.
  • There seems to be no specific trend relating to the regulatory activity. Alterations in licensure categories, new rules revising standards for fire safety, infection control, and facility procedures as well as education and training requirements predominate.
  • As of December 31, 2011 the Illinois Department of Public Health regulated 303 ALS with a total of 13, 470 units.
  • It is important to note that in Illinois, residents who have serious mental or emotional problems, who are in need of nursing care, or who require total assistance with two or more ADLs may not be admitted or retained. This standard appears brief and ambiguous compared to other states (e.g. New York, Florida, Pennsylvania, Ohio, etc.) and may permit flexibility for an Illinois ALF provider to admit and retain residents who (in other states) would be required to reside in a higher care setting (i.e. nursing home).
  • The Supportive Living Facility program in Illinois is an exemplary Medicaid-waiver program which created 124 affordable assisted living facilities caring for approximately 12,000 residents. Senior housing experts and providers uniformaly assert that affordable assisted living is too difficult to achieve without some form of government assistance. As quoted in a recent article in Senior Housing News (here) by Tom Grape, CEO of Benchmark Senior Living, “Someone could give you the building for free, and it would reduce costs by 20%. But once you start chipping away at 70% of operating expenses… you can chip away at the margin, but you still have to provide three meals a day, and all the other basic services...And until there’s some sort of government waiver program set in place, residents often end up relying on their families to "chip in."

The continued success of the ALF model will depend on how well it can meet the growing challenge of  the developing robust home and community based services industry. Older adults prefer living in community rather then in an institutional environment as exemplified by the traditional skilled nursing facility. On the other hand some experts posit that 67,000 additional ALF units are needed nationwide in the next 10 years simply to accommodate growing demand. What are your thoughts?

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    Bruce Lederman

    Bruce Lederman has over 25 years experience in the senior care field as a direct care provider and thought leader. Bruce was CEO and president of his own firm that operated skilled nursing facilities in Illinois. He is a former nursing home administrator and has consulted to numerous elder care providers on planning for strategic growth as well as process improvement. Recently he served as board chair of CJE SeniorLife, a leading non-profit elder care provider in the Chicago area. Bruce is currently employed as chief strategy officer for a multi-facility skilled nursing facility company.

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