Professional Documents
Culture Documents
Health Affairs - Assisted Living 10-01
Health Affairs - Assisted Living 10-01
Grabowski
doi: 10.1377/hlthaff.2009.0527
David G. Stevenson
ABSTRACT Assisted living has emerged as an important housing and long- (stevenson@med.harvard.edu)
term care option for older Americans. To date, development of this sector is an assistant professor of
health policy at Harvard
has occurred largely without government financing or regulation. In this Medical School in Boston,
study we used primary data that we collected on county-level assisted Massachusetts.
living supply to gain a fuller understanding of this sector nationally. David C. Grabowski is an
Reflecting their reliance on private resources, assisted living facilities are associate professor of health
care policy at Harvard Medical
located disproportionately in areas with higher educational attainment, School.
income, and housing wealth. As this sector evolves, policymakers will
have to contend with issues related to access to services, public financing,
quality of care, and regulatory oversight.
P
ublic financing of the long-term goals of assisted living care, including accom-
care market in the United States modating residents’ changing needs and pref-
has historically gone to the nursing erences; maximizing residents’ dignity, auto-
home sector. Since the advent of nomy, and independence; and encouraging
Medicare and Medicaid, federal family and community involvement. Yet there
and state policies and a range of political and is a great deal of heterogeneity in the range of
practical factors have contributed to an “institu- services offered and the populations served
tional bias” in long-term care service delivery, across facilities and markets. Indeed, many facil-
favoring nursing home care over community- ities fall short of the ideal.4 Importantly, the mar-
based alternatives.1 Over the past two decades, ket for assisted living has evolved over the past
however, a wider range of home and community- decade as facilities have come to serve a more
based services have become available to older disabled resident population with an increas-
Americans who need assistance with activities ingly complex array of services, potentially im-
of daily living. Assisted living in particular has plying that assisted living could be a more viable
rapidly emerged as a housing and long-term care nursing home alternative than it initially was.5,6
option for older Americans. As of 1999, one-third Growth in assisted living has been driven in
of facilities that called themselves “assisted liv- large part by consumer preference. People who
ing” had been in business less than five years, need assistance in performing everyday activ-
and 60 percent had been in business less than ten ities such as bathing, eating, or dressing prefer
years.2 to receive supportive services in the least institu-
A commonly cited definition of assisted living is tional and most homelike setting possible. A
put forward by the Assisted-Living Quality general population survey found that people
Coalition, a group of providers and consumer would prefer to be cared for in an assisted living
groups. The coalition defines assisted living as facility over a nursing home if they needed
“a congregate residential setting that provides twenty-hour care, by a margin of six to one.7 In
or coordinates personal services, 24-hour super- addition, for some people with less intensive
vision and assistance (scheduled and unsched- care needs, it may be possible to purchase as-
uled), activities, and health related services.”3 sisted living care at lower prices relative to nur-
General agreement exists about the broader sing home care. Although the cost of assisted
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 35
living can vary considerably depending on the state-level assisted living supply data as a guide
amenities and services provided, industry sur- to data collection and as a basis for compari-
veys by Genworth Financial put the average an- son.9,11 We provide more detailed information
nual cost of assisted living care at $34,000 in about our data collection procedures and licen-
2009, compared to $74,000 per year for a semi- sure categories included, by state, in an online
private room in a nursing home.8 appendix.12 For the analyses below, we limited
An important point from a public policy per- our supply data to facilities with twenty-five or
spective is that the development of the assisted more units, in an attempt to focus on facilities
living industry has occurred largely without purposely built to be assisted living and to ex-
the influence of government financing or regu- clude small group homes (for example, adult
lation. As such, there is no single regulatory foster care facilities).
or licensure category for assisted living facil- NURSING HOME DATA We used nursing home data
ities, which makes it difficult to estimate the from the Online Survey, Certification, and Re-
industry’s actual size. With this caveat, one re- porting (OSCAR) system for all Medicaid- and
cent study estimated that there were approxi- Medicare-certified facilities (96 percent of all
mately 38,000 assisted living facilities and facilities nationwide). Collected and maintained
975,000 units nationwide in 2007 (a “unit” by the Centers for Medicaid and Medicaid
may contain more than one bed, as in the case Services (CMS), OSCAR data indicate whether
of married couples).9 In contrast, the nursing nursing homes are in compliance with federal
home industry had approximately 16,100 facil- regulatory requirements and include facility-
ities and 1.7 million beds nationwide in 2004.10 reported information about facility, resident,
Previous efforts to collect assisted living sup- and staffing characteristics. Following an initial
ply data have largely been at the state level.9,11 survey, states are required to survey facilities no
These studies have identified much variation less than every fifteen months, and the average is
in assisted living supply across states; however, about twelve months.
examining potential within-state variation or Using data from 2007 and earlier, we included
correlations between assisted living supply and the most recent survey observation for 15,792
market-level characteristics has not been pos- nursing homes in our analyses. For these facil-
sible. In this study we used county-level assisted ities, we also merged information from the Nur-
living supply data that we collected from indivi- sing Home Compare database (available online
dual states. Specifically, we merged a 2007 cross- from http://www.medicare.gov/NHCompare/)
section of assisted living data with other market- —in particular, the 5-Star quality rating for each
level data on nursing homes and population facility, which is a composite measure based on
sociodemographic traits, to gain a fuller under- staffing levels, inspection results, and clinical
standing of the distribution of assisted living outcomes.
facilities nationally. COUNTY - LEVEL DATA We obtained data on var-
ious county characteristics from the 2007 Bu-
reau of Health Professions Area Resource File
Study Data And Methods (ARF). This file contains data on a range of pop-
ASSISTED LIVING DATA There are no national data ulation characteristics at the county level, in-
on assisted living facilities; however, there are cluding socioeconomic data, as well as availabil-
separate data sources across states, such as state ity of medical professionals and services.13
licensure registries. The authors collected de- ANALYSES All analyses used a 2007 national
tailed state-by-state supply data that included cross-section of data. Using the assisted living
facility name, location, and capacity (units). Our supply data we collected, we first described the
data include a national cross-section for 2007. supply of assisted living facilities and units at the
Reflecting its imprecise definition, assisted liv- state level, including the penetration of assisted
ing across states includes a wide range of licen- living units per 1,000 people age sixty-five and
sure categories for congregate residential facil- older. For the county-level analyses, we merged
ities beyond just “assisted living” (for example, assisted living, nursing home, and ARF variables
residential care facilities, community living ar- into a single county-level observation. Across
rangements, and personal care homes). Simi- these analyses, assisted living penetration (that
larly, state definitions for “units” can vary. Some is, the number of units per 1,000 elderly people)
states include only one bed per unit, and others is the primary variable of interest.
include more than one. Our choice of the county as the “market” for
To ensure comparability with previous find- assisted living was partly pragmatic, because the
ings and as a check for the comprehensiveness ARF data are reported at the county level.Yet this
of our data collection, we used previous National distinction is also consistent with the previous
Academy for State Health Policy compilations of literature on the nursing home market.14,15 In
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 37
EXHIBIT 1
SOURCE Assisted living supply obtained through primary data collection by the authors. NOTES Reporting methods for these data can
vary somewhat by state. Some states count only one facility per physical location, while others count one facility per license. In
addition, state definitions for “units” can vary, with some states including only one bed per unit and others including more than
one. Population data obtained from the 2007 Area Resource File. Penetration per 1,000 elderly obtained by dividing assisted
living units by number of people age sixty-five and older.
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 39
EXHIBIT 3
SOURCES Assisted living supply data obtained through primary data collection by the authors. Population data obtained from the 2007
Area Resource File. NOTES Penetration defined as assisted living units per 1,000 people age sixty-five and older. ALF is assisted living
facility. Statistical significance denotes difference from quartile 4. **p < 0:05
(44.4 percent) than do states with lower pene- units nationwide. In contrast to the nursing
tration (31.2 percent). home sector, where facilities are heavily regu-
lated and depend mostly on public dollars, the
assisted living sector has, to date, grown without
Discussion substantial government regulation or financing.
Assisted living has become a widespread housing The distribution of assisted living facilities na-
and care option for seniors, with almost 840,000 tionally is consistent with what one would ex-
EXHIBIT 4
SOURCES Assisted living supply data obtained through primary data collection by the authors. Population data obtained from the 2007
Area Resource File. Nursing home data obtained from the Online Survey, Certification, and Reporting (OSCAR) data. Facility 5-Star
ratings obtained from Nursing Home Compare database. NOTES Penetration defined as assisted living units per 1,000 people age sixty-
five and older. Statistical significance denotes difference from quartile 4. ALF is assisted living facility. NH is nursing home. **p < 0:05
SOURCES Assisted living supply obtained through primary data collection by authors. Long-term care insurance penetration obtained
from: Stevenson DG, Frank RG, Hsu J. Private long-term care insurance and state tax incentives. Inquiry 2009;46(3): 305–21. Long-term
care spending obtained from Burwell B, Sredl K, Eiken S. Medicaid long-term care expenditure. Thomson/Medstat; 2008. Population
data obtained from the 2007 Area Resource File. NOTES Penetration defined as assisted living units per 1,000 people age sixty-five
and older. Statistical significance denotes difference from quartile 4. LTC is long-term care. HCBS is home and community-based
services. **p < 0:05
pect, given their reliance on private resources. Each of these issues is considered in turn.
They are located disproportionately in areas with ACCESS TO SERVICES From the consumers’ per-
higher educational attainment, income, and spective, the emergence of assisted living as a
housing wealth. This trend is especially striking supportive housing option is largely a positive
in the context of comparing counties with no development. Given that private-paying consu-
assisted living facilities to those in the highest mers “vote with their feet” (and their dollars) in
quartile of the distribution. For example, the favor of assisted living, there is a strong prefer-
median home value in the highest-penetration ence for this care model. It is worth noting, how-
areas is more than 40 percent higher than ever, that the sector is still a nascent one and that
in counties with no assisted living facilities there is much variability across states and mar-
($98,500 and $69,600, respectively). kets in capacity and services offered. In particu-
After rising sharply in the late 1990s, the sup- lar, low-income people, including minorities
ply of assisted living facilities has moderated in and people living in rural areas, have substan-
recent years.9 Moreover, occupancy rates and tially less access to this care option. Our findings
access to capital for new construction have both also suggest that access to assisted living is great-
faced pressures in the context of the current fi- est in states where a greater proportion of Med-
nancial downturn. Although industrywide occu- icaid long-term care dollars is going to home and
pancy rates are reportedly stable, some assisted community-based services, which suggests that
living facilities (such as newer facilities or com- community-based service capacity matters. Giv-
panies that embarked on ambitious expansion en research suggesting disparities by race and
plans) have struggled to fill beds, especially in income in the nursing home sector,19 future
parts of the country where home values—a key research should consider how the differential
mechanism seniors use to finance care—have presence of assisted living across markets con-
been hardest hit.17,18 Some companies have tributes to this phenomenon.
sought bankruptcy protection, while others have PUBLIC FINANCING To date, states have been
looked for ways to contain costs and boost occu- cautious in expanding Medicaid coverage for
pancy rates. services in assisted living facilities. Many states
The long-term implications of these changes have small programs under which Medicaid pays
for the assisted living sector are unclear, but our for personal care and medical services in assisted
data suggest that the growth in assisted living living, but few assisted living residents receive
has dramatically changed the long-term care these public supports. One recent estimate is
landscape. To date, however, very few govern- that approximately 115,000 Medicaid recipients
ment or academic studies have modeled this nationwide received services in assisted living
change or considered the potential implications facilities in 2007.9 Unlike care delivered in hos-
for the long-term care sector as a whole. Policy- pitals and nursing homes, Medicaid cannot pay
makers and researchers will need to grapple with for beneficiaries’ room-and-board expenses in
issues related to access to services, public finan- assisted living, which potentially creates a
cing, quality of care, and regulatory oversight. further barrier to access. Instead, these expenses
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 41
typically are financed from a resident’s income, challenging in the nursing home sector.26 Final-
including Social Security, Supplemental Secur- ly, an aspect that is unclear is whether the nature
ity Income, state supplements, private pensions, and quality of care would change in the context
federal housing subsidies, and—in some states— of a potentially expanded role for public finan-
family contributions.20 cing—a factor that will depend, in part, on the
Although there are important noncost consid- government’s oversight approach.
erations in expanding Medicaid-financed care in REGULATION As noted, there is wide variability
assisted living (such as strong consumer prefer- across facilities in services offered and across
ence), any proposed expansion is accompanied states in the degree of government involvement
by important fiscal caveats. In particular, the as a payer and regulator of these services. Some
cost-effectiveness of assisted living relative to states clearly specify the types of services that
nursing home care is unclear, especially if access assisted living facilities can and cannot provide,
is offered more broadly through a state Medicaid sometimes defining distinct licensure categories
program. Assisted living has the potential to accordingly. Other states give providers broader
serve as a cost-effective substitute for higher- flexibility to meet the needs of residents.27
intensity nursing home care for some people. The government’s role in assisted living facil-
Yet policymakers are concerned about the moral ity care will inevitably evolve if Medicaid and
hazard (or so-called woodwork effect) likely as- other public payers invest more in this sector.
sociated with offering people an array of long- Indeed, twelve states have enacted certificate-of-
term care services, especially attractive options need laws to hold down the supply of facilities,
such as assisted living. A key issue from a state with the idea that the existence of fewer units will
budgetary perspective is whether assisted living constrain public spending on these services.28
coverage can be structured to increase substitu- One tension that will likely magnify if public
tion away from Medicaid-financed nursing home payments to assisted living increase is the
care while minimizing substitution away from trade-off between allowing providers flexibility
unpaid care by family and friends. In the past, in structuring housing and service options for
it has proved particularly difficult to target ser- consumers, on the one hand, and ensuring great-
vices only to people who otherwise would have er standardization of care and access to services,
entered a nursing home.21 on the other.
QUALITY OF CARE To date, there is limited and A vital component of establishing public policy
uneven evidence about the quality of care offered in the assisted living sector will be the collection
in assisted living facilities.22,23 For example, rel- of longitudinal, market-level data to track the
ative to the quality information that is publicly growth of facilities and the evolution of people
reported on the federal government’s Nursing served and services offered. The analyses pre-
Home Compare and Home Health Compare sented here offer a snapshot of assisted living
Web sites, there are fewer government-provided facility supply nationally.
resources to guide consumer choice in assisted Importantly, these cross-sectional analyses do
living.24 The paucity of information in this area not allow one to draw inferences about the im-
results from a lack of uniform assessment data pact of growth in assisted living on a range of
on assisted living residents as well as from un- Medicaid or nursing home market characteris-
certainty about the range of outcomes for which tics over time or about the evolution in the case-
facilities should be held accountable.25 mix of assisted living residents or the services
Reflecting the orientation of assisted living they receive. Policymakers will need such data
facilities toward consumer choice, an important going forward to protect consumers and to craft
component in the development of this research sustainable policies that can meet the needs
base should be comprehensive quality-of-life of our aging population across long-term care
measures—a dimension of study that has proved settings. ▪
This work was supported by funding Financing and Organization (HCFO) Foundation (Grant no. 61511).
from the Changes in Health Care Initiative of the Robert Wood Johnson
NOTES
1 Kane RA, Kane RL, Ladd RC. The (DC): Office of the Assistant Secre- quality. Washington (DC): Assisted
heart of long-term care. New York tary for Planning and Evaluation, Living Quality Coalition; 1998.
(NY): Oxford University Press; 1998. U.S. Department of Health and Hu- 4 Hawes C, Phillips CD, Rose M,
2 Hawes C, Rose M, Phillips CD. A man Services; 1999. Holan S, Sherman M. A national
national study of assisted living for 3 Assisted Living Quality Coalition. survey of assisted living facilities.
the frail elderly: results of a national Assisted living quality initiative: Gerontologist. 2003;43(6):875–82.
survey of facilities. Washington building a structure that promotes 5 Morgan L, Gruber-Baldini A,
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 43