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ALF overview preview.

A new study takes the measure of an industry

A HIGHLIGHT OF THE ALFA SPRING SHOW in Orlando in April was a presentation by PricewaterhouseCoopers Partner Ronald Tinsley and Senior Associate Rob Whitlock, previewing "Assisted Living 2000," a report on the state of the industry that is slated for release this summer.

In light of ALFA's merger with the National Association of Senior Living Industries (NASLI), many of whose members were focused on independent or congregate housing, this year's study will, for the first time, address both independent and assisted living.

The report will cover everything from design trends to supply estimates. But the heart of the report, and the subject of Tinsley and Whitlock's remarks, centered on the results of a provider survey.

Although the 374 communities responding to the survey (78 percent assisted only, 6 percent independent only, and 16 percent mixed) was a smaller number than last year's sample, the similarity of results, says Tinsley, suggests that accuracy was not compromised. What's more, with the same regions reporting, it was again possible to do year-over-year comparisons.

Resident profile

While the sex breakdown in assisted living facilities (75.3 percent female, 24.7 percent male) and the average number of ADLs (3.1) was unchanged compared with last year, the average age of residents (84.3 years old for females, 82.5 years old for males) is creeping up. Tinsley opines that this could reflect aging in place, or independent living facilities starting to care for frailer residents.

The percentage of females in ALFs located in non-metropolitan areas was much larger (78.1 percent) than in metropolitan ALFs (73.7). Tinsely speculates that a new assisted living resident in a non-metropolitan area might be a female moving off of a farm following the death of her spouse, whereas a metropolitan-area ALF might attract an older man who lived in a similar type of housing but no longer wants to cook.

Surprisingly, the average age in independent living facilities (83.1 years old for females and 82.3 years old for males) isn't much different than for assisted living, although they are clearly healthier, with residents averaging 0.9 ADLs, and much more likely to be part of a married couple (12.6 percent versus 1.8 percent). Interestingly, independent living facilities in metropolitan settings have a higher percentage of married couples than their non-metropolitan counterparts.

There was a decrease in the percentage of assisted living residents with cognitive impairments (45.9 percent versus 48.9 percent) and a similar decrease in incontinence (26.4 percent versus 29.7 percent). The number of wheelchair users, however, is up (41 compared with last year's 38.3).

The report indicated that special assistance was provided to residents in the following percentages: diabetes (10.4 percent), mental retardation or developmental disability (1.2 percent), Parkinson's (6.1 percent), cancer (4.4 percent), pressure ulcer (1.1 percent), and other, including arthritis, Alzheimer's stroke, medication management (28.6 percent).

* Resident finances. The most notable difference between the metropolitan and non-metropolitan assisted living resident had to do with their financial status. While average annual pre-tax income of residents overall was $29,400, and their average assets worth $160,000, the pre-tax income and average asset figures for metropolitan residents were $31,000 and $182,000, respectively, compared with $27,700 and $133,600, respectively, for non-metropolitan residents. What's more, the percentage of residents with incomes of less than $20,000 was 27.1 percent overall, but the metropolitan versus nonmetropolitan numbers were more than 10 percentage points apart (22.1 percent compared with 33.2 percent).

In independent living, the income differential between metropolitan and non-metropolitan residents ($40,900 versus $37,000, respectively) was comparable to assisted living, but the spread between metropolitan residents and non-metropolitan residents with respect to assets was much wider ($309,000 versus $231,900, respectively).

* Referral sources. The survey indicates an increase in referrals to assisted living from hospitals and physicians as well as an increase in referrals from existing residents. Referrals from agencies and churches dropped to 1 percent from 9 percent. Family members are the largest source of referrals.

In the independent living sector, the media are a major contributor (23 percent). Together, residents, family, and media constitute almost 50 percent of referrals.

* Attrition. The survey indicated that of residents who left ALFs, 37 percent went to nursing homes, 13 percent to hospitals, and 30 percent died (up from 26 percent in the previous year's survey). Reasons for leaving independent living included death (26 percent), going to assisted living (26 percent), and going to a nursing home (21 percent).

* Prior location. The survey showed that only 50 percent of ALF residents came from private residences, compared with 79 percent of independent living residents. This supports the notion held by ALE marketers that family members and health care providers are key influencers in the decision of seniors to enter their facility. In fact, Tinsley notes, many assisted living companies are developing facilities in areas where the 45-to-65-year-old population is growing to be where the decision-makers are.

* Distance relocated. The survey revealed a notable difference between metropolitan and non-metropolitan assisted living facilities in terms of willingness to relocate more than 25 miles with 25 percent of rural seniors versus 10 percent of urbanites moving that far away. "The industry benchmark has been that 75 percent of ALF residents relocate within 15 miles," Tinsley said. The study suggests that in non-metropolitan areas, the market for your product may be more farreaching because there isn't the competition that exists in urban areas, and because people seem more willing to go longer distances, whether for a quart of milk or a room in an ALE. Conversely, the statistics support the already widespread belief that urban seniors are less likely to travel long distances, or have less need to do so because they have more facilities from which to choose.

Residence highlights

The average number of units in an ALE residence increased to 53 from 49. The average square footage of a studio decreased to 305 from 332.

The average occupany rate for ALEs increased slightly, to 91.5 percent from 90.4 percent. The median, however, was a more impressive 95 percent.

Recognizing the need to be out there selling prior to opening, the average amount of time devoted to pre-marketing has increased by one full month, to 6.3 months compared with the previous year's 5.3 months.

The number of Alzheimer's-specific facilities or assisted living facili-ties with dedicated Alzheimer's units increased to 23.6 percent from 17.8 per-cent, with an average of 27 beds for Alzheimer's residents. Fifty-one percent of all reporting facilities have some level of capacity for residents with dementia or cognitive impairment, and about 31 percent of those have residents with Alzheimer's

Construction highlights

Development picked up over the prior year, with ALEs adding an average of 53 units in 1999 compared with 48 in the prior year, and increasing resident capacity by 62 compared with the prior year's 54. Average square footage of units increased to 383 from 364. Metropolitan ALEs were bigger than their non-metropolitan counterparts in several respects: number of units (62 versus 43), resident capacity (72 versus 52) and average square footage (411 versus 350). Wherever located, the percentage of total space devoted to common areas was unchanged compared with the previous year's survey of 32 percent.

Daily rates

In metropolitan areas, the average daily rate for a semi-private room is $63.10 for 316 square feet; for a private studio $74.80 for 317 square feet; for a one-bedroom $86.90 for 538 square feet; and for a two-bedroom $104 for 770 square feet.

In non-metropolitan areas, the rates for a semi-private studio were $63.70 for 316 square feet; for a private studio $72.80 for 277 square feet; for a one-bedroom $80.60 for 474 square feet; and for a two-bedroom $89.80 for 693 square feet.

Survey Regions

West 93 ALFs

Midwest 82 ALFs

Northeast 96 ALFs

Southeast 79 ALFs

Source: An Overview of the Assisted Living Industry, a report by PricewaterhouseCoopers/Assisted Living Federation of America
 ADL service fees at a glance
 Metropolitan Non-Metropolitan
By hourly charge for each service 6.2% 6.5%
By flat rate for each service 13.5% 10.9%
Tiered pricing for bundled services 43.8% 36.2%
Priced by points assessment 3.4% 4.3%
Services included in basic fee 15.2% 15.2%
Other (not specified) 18.0% 26.8%
Source: An Overview of the Assisted Living Industry, a
report by PricewaterhouseCoopers/Assisted Living Federation
of America
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Article Details
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Title Annotation:Assisted Living Federation
Publication:Contemporary Long Term Care
Geographic Code:1USA
Date:Jun 1, 2000
Previous Article:Who's your 'daddy'?
Next Article:LTC policies up.

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