Assisted Living Market Sector Overview
The Assisted Living healthcare sector is highly specialized and requires its own market access strategy for healthcare product and healthcare service companies to successfully engage its key customer accounts, payers, group purchasing organizations, wholesalers, distributors, medical suppliers plus other supply chain and procurement stakeholders. Assisted Living facilities, which number approximately 28,000 in the United States and provide care for over 1 million people, are a healthcare market segment coming under significantly more regulation, reduced reimbursement and competitive challenges.
About 70% of persons over age 65 will require some sort of care provided by Assisted Living and/or Long Term Care. The average age of patients is roughly 80 years of age, about 70 percent of them are female. There is a lesser number of professional medical staff on premises than nursing facilities (Long Term Care or " LTC ", Skilled Nursing Facilities or " SNF " ); patients in Assisted Living facilities require less advanced healthcare support. While they are less regulated than LTC or SNF facilities, Assisted Living is coming under greater scrutiny for care and cost standards by municipal, state and federal agencies including the National Center for Assisted Living ( NCAL ).
The Distinct And Significant Differences Between Assisted Living And Long Term Care Healthcare Sectors
Assisted Living and Long Term Care are commonly perceived as one market sector but there are drastic differences between them including types of residents / patients, level of care, insurance coverage, payer contracting plus regulatory agencies and requirements at the local, state and national level.
Assisted Living focuses on the needs of patients ( residents ) requiring help with certain basic activities and responsibilities associated with daily self-care and physical well-being. Examples include these and other types of everyday actions and tasks which require assistance to perform:
- Functional and safe mobility to move about such as walking and getting in and out of a bed or chair throughout the course of a day
- Personal grooming and hygiene including bathing, showering, oral care
- Going to the bathroom for toileting purposes and cleaning oneself afterwards
- Getting fully dressed with attire in place and correctly affixed
- Eating meals and drinking fluids
Assisted Living facilities are not intended for persons with these and other conditions which require substantially greater professional care:
- Significant cognitive impairment
- Advanced behavioral challenges and issues
- Extensive medical conditions
- Require the care of a nurse often throughout the day
The misinterpretation of Assisted Living versus Long Term Care is that it is common for Long Term Care patients to require help with the basics of everyday life that is provided in Assisted Living. In addition to that support Long Term Care patients must also have additional care associated with much more significant challenges and needs that frequently require various credentialed medical, psychiatric or other healthcare professionals.
Patient Cost Sharing And Payer Reimbursement
Most of the reimbursement is through self-pay or through an insurance plan which covers Assisted Living, payment through Medicaid sources is low but growing. Many of the larger Assisted Living companies also operate Long Term Acute Care hospitals (LTACs), nursing centers and rehabilitative centers. Costs vary state by state but on average, the annual cost of Assisted Living services rises approximately 4.26%. As Medicaid reimbursement is reduced, it puts more pressure on Assisted Living providers to recoup costs and turn a profit.
Evolving Business Strategies, Patient Care Models And Facility Adaptation
Assisted Living is evolving; facilities are adapting to meet the needs of existing patients / residents for a longer period of time to avoid being transferred to another facility which may be operated by another organization. Some have literally become multi-purpose, multi-population complexes with specialized units for patients with physical, behavioral or other additional needs. These facilities require personnel with added caregiver credentials and also need enhanced IT systems and staff to manage day-to-day record keeping and billing for accurate reimbursement. A typical Assisted Living facility has between 40-45 units; some are as large as 150 to 200 units.
Depending on the facility and care it provides, a combination of Assisted Living transitioning to Long Term Care is offered by some. As these additions of care capabilities are made, facilities are then tasked with aligning to deeper regulatory standards and more complex reimbursement guidelines. The commercial goal is patient retention; rather than a patient leaving an assisted living company's facility and experiencing a subsequent loss in revenue. The organizations retain the patient and whenever possible do so within the same confines of their existing residency property but perhaps in a different wing or building. The space vacated by the patient having a change in care needs is assigned to a new incoming patient so income streams are consistent. While the patients may share some physical aspects of a facility location, Assisted Living and Long Term Care patients are still clearly cared for differently according to sharply defined medical, legal, payer and regulatory standards.
Technology In Facilities An Asset And A Potential Competitor
Telehealth is an emerging care and technology segment that is rapidly growing can have a positive impact in the assisted living patient population. It enables patients to be cared for / monitored remotely via mobile technology and other digital means. For fragile, high care patients living within assisted living facilities, clinician staff and the patient's primary care physicians can get ongoing insights as to the condition of the patient via telehealth resources.
For some patients, telehealth ( which may also be referred to as remote patient monitoring ) enables them to be cared for while at home and reduce the need for them to be cared for on a daily basis in an Assisted Living facility. In this perspective, telehealth is considered a competitor to Assisted Living providers. As costs and care rise, telehealth is a go-to option supported by at-home visits by nurses as necessary.
Consolidation Within The Assisted Living Sector
Based on rising expenses, increased regulatory oversight, reduced reimbursement levels and competitive challenges, consolidation driven by mergers and acquisitions is underway throughout the Assisted Living sector. Singular facility and small multi-facility assisted living operators with less than 10 sites are being swiftly acquired by larger players. Larger Assisted Living companies have also chosen to merge which not only boosts their total patient count but also provides them with greater access to patients in multiple markets across more states as they combine scale and scope attributes. This is taking place in the commercial sector as well as those facilities operated by non-profit, faith-based organizations in metropolitan, regional and national marketplaces. It is being further driven as hospitals and health systems consolidate and combine their Assisted Living and Long Term Care management teams and facilities they operate.