December 5, 2014, Howard Gleckman, Forbes - December Assisted living facilities (ALFs) may be going the way of cable TV. Still around, but with a limited future. Their residents are changing. Even as their needs become more complicated, they are demanding less institutional-like care. At the same time, assisted living will have to find its place in a world where medical and social care are becoming better coordinated and providers will be expected to organize themselves in very different ways than today.
Assisted living was once a creative alternative to nursing homes. Soon, something new will replace ALFs. The details remain uncertain, but we can begin to see what this new model of residential care will look like.
Today, assisted living is a hybrid. It provides more care than independent living but less than a nursing home. Yet, residents often think of ALFs as institutions rather than homes. Assisted living is not a Medicare benefit and facilities are paid by Medicaid in only very limited circumstances. They are not regulated by the federal government, but are subject to state rules, which vary widely.
ALF residents are quite sick, often with multiple chronic illnesses. Four in ten have dementia (a higher percentage than nursing home residents), one quarter suffer from depression, one-third have diabetes, and more than half have high blood pressure.
And they have significant care needs. Sixty percent need help bathing, more than half need assistance walking. More than one in three can't get to the bathroom on their own, and one in five needs help eating, according to the National Study of Long-Term Care Providers (NSLTCP). ALFs are, in many ways, the new nursing homes.
As nursing homes abandon the long-stay business for more lucrative post-acute and rehabilitation patients, Baby Boomers will need an alternative. But not today's ALFs. What will assisted living look like in 2020?
Fewer operators: As payments are squeezed, small and medium-sized providers will close or be acquired by larger operators. Many small not-for-profits will disappear.
Better integration with medical providers. The business model of ALFs has been based on social supports rather than health care. But health systems are looking for partners who can provide social and quasi-medical services (such as medication management) and even rehab in lower cost settings. In that environment, ALFs might participate in Accountable Care Organizations or bundled payment arrangements where they share revenueâ€”and riskâ€”with traditional health systems, insurance companies, or large physician practices.
The idea of such integrated medical care is not newâ€”the Erickson continuing care communities have had their own Medicare Advantage plan for yearsâ€”but it has generated limited interestâ€”so far.
Person-centered care: No, that doesn't mean Wi-fi or updating the elevator music from Glenn Miller to the Beatles. It does mean customizing care for residents.
Fewer heads in beds: The old business model was based on filling rooms. The new one may focus on virtual assisted living that delivers services to people living in the community rather than in its buildings. For instance, it could mean contracting with apartment complexes to provide services such as medication and case management, as well as home health. Or building relationships with local faith-based organizations or senior villages to provide community-based care. Call it home care-plus.
Harvard Medical School professor David Grabowksi and colleagues have interviewed industry executives to learn their view of the future. The results of their study are preliminary, but they've found the business may split into two models: One focused on housing and hospitality; the other on integrated delivery of medical and social care.
For these changes to take hold, states will have to rethink their regulatory structures. Assisted living operators are unlikely to better integrate with health systems if it requires a skilled nursing license. Balancing consumer protection and innovation will be a big challenge.
As with health care, senior services face an environment of enormous disruption. Some providers will embrace it. Others will be destroyed. For consumers, it might mean more choices and a better quality of life.