U.S. Department of Health and Human Services

A National Study of Assisted Living for the Frail Elderly: Report on In-Depth Interviews with Developers

Executive Summary

Barbara B. Manard and Rosemary Cameron

The Lewin Group, Inc.

December 1997

Under subcontract to Research Triangle Institute for the Office of the Assistant Secretary for Planning and Evaluation, the Administration on Aging and the National Institute on Aging, U.S. Department of Health and Human Services.

This report was prepared under contract DHHS-100-94-0024 between the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Office of Disability, Aging, and Long-Term Care Policy (ASPE) and Research Triangle Institute (RTI). In addition to ASPE, other support for the study, A National Study of Assisted Living for the Frail Elderly, has been provided by the National Institute on Aging, the Administration on Aging, and the Alzheimer's Association. For additional information about the study, you may visit the DHHS home page at http://aspe.os.dhhs.gov or contact the Office at DHHS/ASPE/DALTCP, H.H. Humphrey Building, Room 424E, 200 Independence Avenue, SW, Washington, DC 20201. The e-mail address is: DALTCP2@osaspe.dhhs.gov.

This report describes selected trends in the assisted living industry. It is intended to supplement ongoing research being conducted as part of The National Study of Assisted Living. In this supplementary study, detailed interviews were conducted with 29 carefully selected persons from 21 states who are involved in various aspects of the development of assisted living facilities: architects, builders, developers, and consultants to the development industry. This report, the product of the interviews, provides preliminary information concerning barriers to the development of assisted living and future trends in the industry, as well as the potential for assisted living to serve a larger lower income and Medicaid-eligible population.

Key points stressed by those interviewed included the following:

• Policy-makers at all levels will face increasingly difficult decisions with respect to the design, regulation, and financing of assisted living, particularly regarding the extent to which assisted living should provide medical services to the frail elderly.

• The assisted living industry is growing rapidly, and some markets (e.g., high-end markets in many areas) may already be saturated.

• The "assisted living concept," widely discussed but inconsistently defined, is proving more difficult to execute well than many developers had thought; industry shakeouts are anticipated.

• Although a number of developers are working on ways to make assisted living more affordable, this is proving to be a substantial challenge.

• Rising acuity levels, already seen in the industry, will have a major impact on the design and fundamental concept of assisted living in the future.

• There was little agreement among those interviewed regarding how government policies should balance concerns of appropriate consumer protection versus overregulation of this emerging market.