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Region’s Hot Market Segment: Assisted Living
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Business New Haven
4/6/1998
By: BNH
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Health-care providers, developers and architects are partnering to vie for first-to-market positions in the growing assisted-living sector. Industry experts forecast that state and national demographic trends will continue to drive up demand well into the next century for retirement communities that provide on-site health care services. Already, more than a third of the state's 175,000 people aged 75 and over are believed to be in need of some type of assistance to function adequately on a daily basis.
Several new assisted living facilities that have opened or are under construction in communities such as Hamden, Cheshire, Southington and Wallingford are successfully attracting occupants due a combination of favorable market conditions and aggressive marketing campaigns.
Competing indirectly with more costly nursing homes which provide more acute or extensive care in a setting which offers minimal independence for occupants, assisted-living communities have sprouted up from the private rather than the not-for-profit sector. And they are quickly achieving profitability.
Share prices of publicly-held assisted-living enterprises rose 15 percent in the aggregate in calendar 1997, and 12 of the 16 public companies posted gains. Total annual revenue growth is projected at 15 to 20 percent in an industry currently valued at $12 billion.
Traditionally, long-term care has been the sole province of non-profit nursing homes - but that is changing rapidly. Legislators and seniors are seeking coverage for care at assisted-living facilities by lobbying for Medicaid vouchers and expanded Medicare coverage of health-care services
provided.
Says Wendy Furniss, health services supervisor for the state's Division of Health Systems Regulation at the Department of Public Health: “The Connecticut model of regulating assisted-living facilities is different from other states that directly license facilities. We did not want to institutionalize these communities. We have chosen to view an apartment complex as a person's home. Instead we license 22 assisted-living service agencies across the state that provide health care to assisted-living facilities.”
According to Furniss, residents in assisted-living facilities must be stable and not in need of acute care. “We wanted to make it easier and less costly for assisted-living facilities to operate, as opposed to nursing homes,” she says. “Less of a regulatory burden allows them to keep costs down.”
Typical monthly expenses for residence in one of the newer communities ranges from $1,750 to $4,000 - still well below the statewide average annual cost of $75,000 for nursing home care.
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