State Assisted Living Policy: 1998. The Role of the Market in Defining Assisted Living


Regulations set parameters for what is possible. Admission/retention criteria establish the maximum boundaries for tenants, and the services allowed define the maximum allowable package that may be delivered. Operators still determine which tenants may be admitted or retained and what services are provided. State regulations often specify that the residence must develop written policies concerning whom it will serve and what services it will provide. As a result, providers may choose not to offer all the services allowed by regulation. Companies that own or manage assisted living facilities and nursing homes may view the nursing facility as their primary line of business and develop assisted living as a referral source. While this policy may be a sound business strategy, it is not consumer or customer focused and does not maximize a resident's ability to age in place.

Despite broader rules, facilities may be successful at offering a limited service package. If competition is limited, and demand and occupancy are high, facilities can operate successfully offering limited services. The staffing requirements are easier to manage, and rates can be relatively low. As more facilities locate in an area and residents age and require more services, these facilities will have a more difficult time maintaining a lower service package. If, as residents leave, new residents are harder to attract, the residence will have to increase the service intensity to retain residents rather than allow a lower occupancy rate.

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