Emeritus/PBS and a Window on Assisted Living
PBS is planning on airing a segment tomorrow (Tuesday, July 30) on its program Frontline, highlighting Assisted Living care in the United States (titled “Life and Death in Assisted Living”). Much of the content focuses on Emeritus and other large, for-profit operators. A link to the PBS website follows as summary to the broadcast. http://www.pbs.org/wgbh/pages/frontline/pressroom/frontline-propublica-investigate-assisted-living-in-america/
I have seen a first-run of the program on a pre-release basis finding it fascinating, troubling, accurate and inaccurate all at the same time. The core takeaway that I found relates to an issue I have written on, lectured on and consulted on for a number of years now. This issue dominates the conundrum that is Assisted Living. The issue is what I label as “appropriateness”.
Routine readers and followers of mine know that I am of the opinion that the Assisted Living industry is essentially over-developed in most major markets. By over-developed I mean more units than true “appropriate” demand. The PBS piece reflects this to a learned viewer. Like Hospice, the true niche’ for Assisted Living and particularly, Memory Care in Assisted Living, is rather small if we apply the “appropriateness” criteria. Taking the analogy a bit further (Hospice and Assisted Living), the fraud trend that has enveloped a major portion of the Hospice industry via primarily Vitas (and others) bears striking similarity between the PBS/Emeritus feature segment; a large supply of outlets, a drive for continued earnings growth, and a lack of truly appropriate patients and/or residents to fuel the occupancy/encounters required to support continued earnings growth, increasing sales, etc.
While I realize the above is a bit esoteric, the logic is economically sound at all ends. More is often not better and the principal of diminishing utility is easily visible, especially to the customer when supply exceeds demand in health care. The plain fact of the matter is that the Assisted Living market has flourished due to a drum-beat fallacy that it is a suitable replacement in many regards, for structured institutional care. This myth is perpetuated by policy makers who crave relief within their Medicaid programs (transition nursing home residents from institutional care environments to assisted care facilities and save big money). It is perpetuated by senior care advocates. It is fostered by marketers for AL companies that ply families with a mixed message of phenomenal care in non-nursing home settings, etc. In the end, no matter what the rhetoric, the reality rises – appropriateness.
Before anyone assumes that I am a basher of the Assisted Living industry, think again. I have run Assisted Living facilities, developed them and consult for Assisted Living operators, investors and developers. Like Hospice, I think Assisted Living is phenomenal, when used and structured “appropriately” (there’s that word again). The problem is that the “appropriateness” definition has morphed and incorrectly so.
Assisted Living is a growth industry primarily because it remains essentially unregulated in terms of development and minimally regulated in terms of operating. True some states are a bit more rigid than others but for the most part, building an Assisted Living facility is primarily a capital-raise challenge as opposed to a licensing challenge. The sole impediment, once capital is available, is community zoning ordinances in most states. Even then, working with most communities and through zoning is not an insurmountable challenge. With a fueled belief that an onslaught of baby-boomers will chew-up unit supplies (these boomers not yet even close to Assisted Living age profiles), units spring forth.
As units sprung forth, what many developers and operators first noticed is that the promised circle of consumers was a bit “short” for occupancy targets. No problem. Thus, a re-labeling or re-purposing began to take shape. Turn the excess into Memory Care via new labeling and plow another niche’. This re-purposing worked enough to beget a new trend; build new Memory Care Assisted Living units. Fueled by all of the same non-realities as mentioned before and a rather simplistic and easy development environment supply of Assisted Living and Memory Care cranked-up.
By definition in most states, Assisted Living and Memory Care is a non-skilled environment. To that point, most operators don’t consistently staff a registered nurse or other skilled personnel on a daily basis and to this point, they aren’t required to by regulation. The typical model includes varying degrees of professional or licensed presence ad hoc as opposed to directly purposed. In this ad hoc system, professional staff act more like consultants rather than direct caregivers. Most states don’t require a specific license or education component for the building administrator or manager; typically a minimal training or vocational course with a test. I have literally encountered Assisted Living managers who have a high-school education and were formally, food service personnel or in one rather larger organization, a failed insurance salesman. His training consisted of a three-day state endorsed program, followed by a multiple choice test earning him a “license”. He was hired despite never running a facility or working within an elder care environment. The company brought him in as a “trainee” and promoted him within three months to a manager of a 70 unit facility; Assisted and Memory Care.
Where the industry challenges lie are at the appropriateness level. Assisted Living is appropriate, properly structured, for residents requiring minimal to no direct professional care. It exists to provide a structured, non-institutional environment and care level that includes meals, ADL care, cueing, activities, and wellness. The bulk of the care can and should be provided by non-licensed, non-professional individuals. Correlating to regulatory requirements current in most states, this is the basic premise and thus, definition. Given today that in many locations, supply of units exceeds individuals who truly require this minimal level of direct care, operators in need of occupancy and revenue, introduce higher-care level residents. Since the regulatory environment is minimal and structurally, ill-equipped to monitor the number of Assisted Living facilities, operators could freely expand the “appropriateness” criteria to suit their business needs. Unfortunately, as the PBS segment implies, the infrastructure for many operators (particularly staff levels, skill and training levels) didn’t adjust to the actual care needs of residents.
It is important to note, not all operators are guilty or frankly even the majority, of stretching the appropriateness definition and when more challenges arise, they have staff and programs in-place to adjust their care accordingly. As in hospice, the typical bad-actor pattern is apparent arising from a fundamentally flawed business model, incongruous with the customer. I like profit and so do my clients, including my non-profit clients. The problem arises when profit becomes too short-term, short-sighted and drives all decisions separate from the underlying needs of the customer. As in Hospice for certain organizations, the economic realities of the industry that is Assisted Living , primarily supply and demand, are working against it. What I fear most for the industry is a regulatory back-lash that like all back-lashes regulatory, will be onerous, ill-conceived and punitive for the providers doing it “right”.
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