The widely reported decline in occupancy and utilization in congregate care (independent living, assisted living, congregate memory care, skilled nursing, etc.) is due to the convergence of two predominant factors: 1. The demographic dip, and 2. Cultural negativity. My hope is that this is the end of the myth of the “Age Wave”. There are solutions, but we must be honest about the facts, and willing to do what has not been previously done.
The Demographic Dip
In 1986 while doing market research for my employer at the time, I noticed a peculiarity about the aged demographics in the United States. There is a marked decline in the rate of live births from 1925 to 1945 due to the combined effects of the Great Depression and the dustbowl. This is relevant because those born in 1945 would today (2018) be 73 years of age and those born in 1925 would be 93, if they survived.
This demographic dip is so large (over 9 million) that it cannot be counterbalanced by longevity. The average age of relocation to an assisted living and to skilled nursing centers in the United States is over 85 years of age. We have been experiencing the effects of this demographic dip for many years and the impact on demand for all classes of seniors housing and services will continue at least through 2025, when the “youngest” of the very old will enter the time of their lives when they require more services.
The size of the age qualified market has been shrinking and will continue to decline.
Leadership; Easy & Wrong vs. Difficult & Correct
This has a host of ramifications which most of the advocacy organizations such as AARP and professional membership groups such as the American Health Care Association (AHCA) and LeadingAge have either ignored or failed to properly consider. For example, the current spate of nursing home closures has been extremely disruptive to families and have created a media firestorm against the sector. (As if we needed more negative press!) If nursing home closures are inevitable – and they are – the sector must be responsible and anticipate and equip their professionals with training and tools to respond effectively.
Demand, simply based on market size is not the only factor however.
Who Wants to Go to a Nursing Home?
The negativity about nursing homes, retirement centers and all types of congregate seniors housing is extraordinarily negative in most parts of the United States. This predominant negative metaphor is reinforced by: 1. the lack of investment in the infrastructure and is perpetuated by 2. the local unwillingness to bring the intellectual property resident in nursing centers into the broader community.
The infrastructure issue is especially a problem in nursing centers. Because of restrictive certificate of need/determination of need (CoN/DoN) requirements, and economic issues with capital formation, there have been very few new nursing centers built anywhere in the United States since 1997. Construction in the sector has been limited for the most part to replacement of existing buildings and because of the progressively restrictive payment models under which nursing homes operate, the ability to finance these construction projects is limited. On the other hand, there have been thousands of new assisted living residences constructed during this period.
In the aged population, especially those in the most important 85+ age group, there is a lack of discrimination between and among the various classes of congregate care. In the dozens of focus groups and community-based surveys we’ve conducted, there remains an inability to differentiate an assisted living residence from a nursing center, from an independent living residence. They are all lumped together as “retirement” or “long-term care”. And the psychological associations with the centers is not positive; in fact, they are downright negative.
Unlock the Solution
The knowledge and skills possessed by the staff in every assisted living residence and skilled nursing center are desperately needed in the community to maintain aged population health. And the only way to achieve the value-based outcomes being sought by CMS and so many other intermediaries is to keep the aged population healthy. While home healthcare professionals are critical, no one knows the full spectrum of how to keep seniors healthy better than the staff in assisted living residences and skilled nursing centers. Unfortunately, the history of these operators is to “bunker” and not to reach out and cooperate, collaborate or in any way be transparent with other providers in the same marketplace area.
Bridging this divide among residential, health and social care providers is critical to any improvement in real efficiency in healthcare, as well as eclipsing or minimizing the negative associations the public has with “those places”.