Considerations in opening an adult day center; some do's and don't's in getting involved with this option.

One option open to nursing home operators looking to expand their long-term care services is the establishment of an adult day center. In its Dementia Care and Respite Services Program, the Robert Wood Johnson Foundation sought to demonstrate that adult day centers could serve people with dementia and their families, and do so in a financially viable manner. While this program focused only on dementia care centers, most of the lessons learned from the implementation of this project thus far are applicable to all adult day programs, such as those for residents who are post-stroke, who are developmentally disabled, who have AIDS, or who are in generally frail condition.

Encouraged by the success of the Dementia Care and Respite Services Program, and in order to extend the lessons learned to other day centers, the Foundation has now funded a 50-site replication program called Partners in Caregiving: the Dementia Services Program.

The following are some of the lessons learned that now are considered by the replication sites when opening or operating a day center, and which may be of value to nursing homes considering opening their own such facilities:

1. Government regulations vary by state. Some states require certification or licensing, others do not. The National Council on the Aging's National Institute on Adult Daycare (NIAD), in Washington, D.C., has developed a book called Standards and Guidelines for Adult Day Care. This book establishes ideals for which day centers can strive.

2. Who you serve makes a difference. How impaired your program participants are, either physically or mentally, will have an impact on the number of people you can attract to your program, the number and kinds of staff you will need, and your space requirements.

The average direct care staffing ratios vary from 1:6 to 1:4, depending on the population you serve. Dementia-specific sites require more staffing, but this seems to be the area of greatest growth in adult day centers. State regulations and the population you serve dictate staff qualifications needed. NIAD standards also address this issue.

Space needs vary from 60 square feet per participant of multipurpose space (exclusive of kitchens, bathrooms, offices, hallways and storage space) to 100 square feet -- again, with dementia facilities requiring more space.

3. Reimbursement varies, but caregivers are willing to pay out-of-pocket for services. Medicaid reimbursement for day services is available in some states, but not all, as are funds from Title III of the Older Americans Act. However, we found that with a properly designed, high-quality service, there is a private pay market willing to purchase service at the full cost of care.

The best strategy for financial viability is to pursue a variety of reimbursement sources. This includes grant dollars, which can subsidize the care of those who are unable to pay the full cost but who receive no government assistance. "Scholarships" of this sort may be available from, for example, the United Way, local Alzheimer Association chapters or other community agencies.

4. Start-up time is about two to three years. Renovation expenses aside, about $200,000 to $250,000 is optimal for start-up. Annual operating budgets in the Dementia Care and Respite Services Program averaged about $200,000 for programs serving on average 19 to 20 people per day.

5. Keeping the center full is the key to financial self-sufficiency. Successful service design and marketing are critical to keeping the average daily census up. We found that day centers need about 30 people per day paying $30 per day in order to break even, exclusive of transportation costs. (This rule of thumb will vary depending on the population you serve, your program design, and your labor and other costs). As noted, most residents are willing to pay full cost for quality services. It is also a good idea, for the sake of financial stability, to arrange a payment schedule with some amount charged upfront to lessen the impact of last-minute cancellations.

6. To increase daily census, you must market to caregivers. We found three caregiver market segments: Information Seekers, Respite Seekers, and Care Seekers. These different segments have different motivations and want different services. They therefore require different marketing strategies.

Information Seekers are new to the caregiving role and tend to want information and not services. They may wish to know, for example, about other support services available such as home health care and local Alzheimer Association resources. Later they will likely use your services, so it is important to stay in contact with them. Respite Seekers need a break from caregiving but want only limited amounts of respite. Care Seekers need or want a more complete solution to their caregiving problem. They are interested in longer hours of service; weekend, evening and overnight respite; and ancillary services such as transportation, bathing, grooming, rehabilitation therapies and escorts to doctor appointments.

Centers that can serve Care Seekers may also serve Respite Seekers, but the reverse is not necessarily true. Very often day centers that can serve only Respite Seekers have limited hours of service and do not offer transportation or extra services, thus limiting their appeal to a smaller market segment.

7. Participant transportation is essential. While costly -- and a management headache -- providing transportation is necessary for a financially viable program. When compared to other long-term care options, using a day center is more work for caregivers, especially if they have to transport their loved ones to the center. While not everyone will need the transportation service, a significant number will not be able to attend the program without it. Of ultimate concern, however, is that drivers have a Commercial Drivers License, be trained in CPR, be personable with the elderly and, preferably, have some understanding of the elderly's physical needs. All of this argues in favor of establishing one's own transportation service, as opposed to contracting out and having limited assurance of drivers' qualifications. This is, as noted, expensive, but it works well to offer this service as an option and charge an additional amount for it.

8. Program hours should meet the needs of working caregivers. Adult day centers have the best chance of financial viability if they are open long enough to serve the majority of working caregivers. Working caregivers have the most potential to afford the full cost of services. We recommend hours that are comparable to child day care centers, e.g., 6 a.m. to 6 p.m. However, working caregivers also tend to be more interested in services on weekends and short-term overnight care.

9. Bathing and grooming services are very popular. While not needed by everyone, their availability can make the difference in whether caregivers are able to continue to care for their loved ones at home. (Again, these services are best offered as extra-charge options).

10. Locating the day center in a nursing home can make it harder to market the service. Convincing their loved one to attend a day program is a hard job for the caregiver. Generally, locating the day center in a nursing home can make the elderly person afraid that he/she is being placed in a nursing home prematurely. However, this is an individual reaction, and not everyone has these feelings. Although ideally it would be best to locate the day center off-campus, there are examples of successful centers located in nursing homes.

11. The best marketing tool is a high quality program. The elements of a high quality program include: a) a staff with solid activity-based training (the National Institute of Adult Day Care has developed a training curriculum for this); b) an activity schedule that offers choice and covers the full day, with activities geared to individual interests and levels of functioning; c) a supportive environment that takes into account physical and cognitive deficits; and d) a program philosophy that offers choice to both participants and caregivers.

Day centers represent a natural product extension for nursing homes and other long-term care facilities. They are the best service links between care at home and nursing home care. In the days of managed care, when vertical integration is a key strategy for survival, nursing homes would do well to add day center services to their continuum of care.

For more information on day center management or to request the Program's free quarterly newsletter, Respite Report, contact Partners in Caregiving, Bowman Gray School of Medicine of Wake Forest University, Psychiatry Department, Medical Center Blvd., Winston-Salem, NC 27157-1087; [phone].

Rona Smyth Henry, MBA, MPH is Associate Director of Partners in Caregiving: The Dementia Services Program, based in the Department of Psychiatry and Behavioral Medicine, Bowman Gray School of Medicine, Winston-Salem, NC.