Adding Alzheimer's.

Anne Wright is a freelance writer based in Falls Church, Virginia.

The industry targets a growing market

The report's numbers grab your attention. More than six million seniors have Alzheimer's disease or a related dementia--half of them requiring full-time care--yet there are only 87,000 skilled nursing and 30,000 assisted living beds available to serve their needs. That's 3.5 percent of the total potential market, according to Assisted Living: Alzheimer's Disease and Related Dementias, published by the San Francisco investment banking firm of Volpe, Brown, Whelan and Co.

The need continues to grow. The report projects the number of people in the U.S. with Alzheimer's disease alone to increase by a million over the next decade, to 5.3 million. The Alzheimer's Association estimates that 14 million people will have the disease by 2050.

And don't expect a cure anytime soon: Researchers are still puzzling out what mechanisms trigger the disease--the first step in finding a way to combat them. At present, the best the pharmaceutical industry can do is delay progression of the disease for six months to a year, and only for a small percentage of the population.

As the aging population continues to soar, so will the need for facilities properly equipped to care for the special needs of those with Alzheimer's and other forms of dementia.

Enter assisted living. While most people with Alzheimer's who can no longer remain at home traditionally have gone to nursing homes, assisted living offers another option for people who are otherwise relatively healthy--one that is usually cheaper and offers a more familiar, home-like environment.

Assisted living companies are responding to market need by retooling parts of their existing facilities or building new facilities that are devoted, in whole or in part, to Alzheimer's care. Coupled with greater overall demand is a change in thinking concerning the most appropriate kind of care for people with Alzheimer's.

One misconception, says Barbara Bradshaw, director of specialty care at Louisville, Kentucky-based Atria, has been that "everyone with Alzheimer's has very challenging behavior and therefore can't manage in an assisted living environment." But many of those behaviors, says Bradshaw, are triggered by confrontational approaches rather than "recognizing residents' own sense of reality and helping them feel more comfortable with where they are."

Of course, Alzheimer's assisted living isn't for everyone. "Assisted living has its benefits, but there's no guarantee that Alzheimer's patients will enjoy the level of independence it offers," says Nicolle Heller, spokesperson for the Washington, D.C.-based Alzheimer's Association. "There are lots of different medical and social models [being explored]."

Not every operators can provide this level of care--or wants to. The rewards can be great, but so are the challenges.

Alzheimer's care comes in different flavors. In some facilities, Alzheimer's residents commingle with the rest of the population, In others, they live on a separate wing, floor, building, or campus. Some whole companies focus exclusively on people with Alzheimer's or related dementia.

Atria mixes it up. Ninety percent of their 110 assisted living facilities house people with Alzheimer's who constitute about 15 percent of the company s total resident population. "Not everyone with cognitive impairment needs to be in a special environment," explains Bradshaw. "Some do great in a regular environment."

Those with special needs, however, live in separate sections, or "neighborhoods," and have separate activities programs, and meals.

Brookfield, Wisconsin-based Alterra Inc., which has more than 2,100 units dedicated to such residents, believes in the freestanding model. The advantage to this approach, says Bernie Cavis, director of dementia care for Alterra, is that everything--from programs to the entire culture--is geared toward residents with the disease. Staff are dedicated solely to Alzheimer's care, and facilities are specifically designed to accommodate those with Alzheimer's. Freestanding facilities also allow mentally intact residents to live separately, which most prefer, Cavis adds.

Militating In favor of at least some physical separation are design considerations. To accommodate wandering, Alzheimer's residents need wider hallways or walking gardens. Their facilities also might have cueing features, such as colored pathways inserted into carpets; doorway thresholds that are painted different colors; glass doors on cabinets to remind them what's inside; and visibly placed toilets. Pathways or courtyards also might feature life-skill stations that recreate familiar surroundings.

Because Alzheimer's is a progressive disease, some facilities subdivide their Alzhemer's population. Atria, for instance, offers two levels of care. Residents with relatively few needs fall within its Life Guidance program, while residents with functional challenges requiring higher levels of staffing are part of its Life Guldance Plus program. Each program has its own director. But need rather than disease stage is ultimately what decides how a resident is categorized. "Someone at the end stages of the disease might not be as needy as someone at the beginning level, because the disease manifests itself differently in different people," Bradshaw says.

It's not cheap to create the appropriate physical environment. According to Dwayne Clark, president of Aegis Assisted Living in Redmond, Washington, the need for more common area might eat up space that would have accommodated three or four more revenue-generating apartments.

Labor represents the largest chunk of an ALF's operating costs--63 percent. For Alzheimer's and special dementia care units, the figure rises to 69 percent, according to Volpe Brown. One reason is the amount of staff needed. According to a study by Fort Worth, Texas-based consultant and Contemporary Long Term Care contributing writer Jim Moore, the average staffing ratio for Alzheimer's facilities is one direct-care employee for every 8.6 to 10.8 residents, compared with one direct-care employee for every 11.6 to 14.6 residents in a standard facility.

Some Alzheimer's providers believe even that ratio is too high. "We look to cut corners in every aspect of our program so we could come up with a ratio of one staff person for every four or four-and-a-half residents, Clark says.

Dee Carlson, a Lexington, Kentuckybased Alzheimer's care consultant, says that ideally, the staff-to-resident ratio should be one direct care staffer for every four or five residents."

Of course, staffing ratios vary within a 24-hour period. The ratio at one of Portland, Oregon-based Regent Assisted Livings Alzheimer's facilities is 6:1 during the day, but 12:1 at night.

Appropriate training is also critical. This means going beyond basic health care or personal care to learning how to interact with someone who has a cognitive impairment. Encore Senior Living, which operates about 1,000 Alzheimer's care units, spends about $500,000 a year on staff education programs, says Jim Williams, president of the Portland, Oregon-based company, which focuses development exclusively on Alzheimer's care.

Proper training improves not only resident care but employee morale. "If the staff isn't good, residents start acting up, the staff gets agitated, and you have a vicious cycle." says Williams.

Carlson recommends first training administrators and DONs, who can then model as well as supervise proper care. Administrative staff should receive between 28 and 40 hours of training before a facility admits its first Alzheimer's resident, she says. For frontline workers, whose high turnover would make this much training cost-prohibitive, she suggests a two-day intensive course followed by "practical applications" training and then at least an hour or two of monthly in-service training.

Your in-service coordinator or trainer, Carlson adds, should have a "more extensive background in the disease than just having read a book on it."

Because a trained staff is important, it's dangerous to rely too heavily on temporary agencies. What's more, Carlson points out, people with dementia depend on consistency to feel secure.

These higher costs mean higher monthly fees for those with Alzheimer's. Aegis charges 52,900 to $4,400 per month, depending on acuity level, compared with its standard monthly rate of between 52,300 and $2,800 for a studio apartment and up to $3,500 for a one-bedroom.

Regent's Alzheimer s residents pay tip to $6,000 per month for a private room, compared with about 52,300 for other residents, according to Greg Roderick, vice president of operations.

While the profit margin for an Alzheimer's facility is the same as for regular assisted living, the net income is higher because you're operating off a higher revenue number, notes Volpe Brown analyst Andrew MacPherson. 'That's part of the reason people are looking at this area."

Picking the right place for your Alzheimer's care facility is another major challenge. Aegis identified the West Coast as a promising location. "California has 32 million people, the fifth-largest economy, and we didn't feel there was a major player in highacuity assisted living here," says Clark.

Before settling on a location, Encore conducts a feasibility study that takes into account both "levels of receptive need" and competitors already providing similar services.

Encore likes to locate its facilities adjacent to hospitals, either by joint-venturing with them or acquiring or leasing property from them. This provides cross-referral bases for Encore, the hospital, and any nursing home the hospital may operate.

Sunrise Assisted Living works closely with the Alzheimer's Association to determine where there's a real need.

Besides demographics, you must consider licensure laws governing specialty assisted living facilities "The regs are all over the board," says Aegis' Clark. "They're not only state-specific, but district-specific. You have to be very sophisticated in your knowledge of building codes and everything else."