The Commission on Affordable Housing and Health Facility
Needs for Seniors in the 21st Century
January 14th, 2002
Rosalie A. Kane, DSW
Professor, Division of Health Services Research, Policy, and Administration
School of Public Health
University of Minnesota
Trends in Assisted Living
My name is Rosalie Kane and I am a professor at the School of Public Health at the University of Minnesota. I am grateful that the Commission invited me to speak today, and that assisted living is part of your agenda as you think about affordable housing and services for seniors in the next century. For the record, I provided commissioners with a much more detailed discussion of challenges in Assisted Living in the form of a monograph co-authored by Keren Brown Wilson.
My experience with this topic began with a fascination about the potential for assisted living, which I first encountered in the State of Oregon, where regulations required that any provider using the name assisted living offer singly occupied (unless by genuine choice) private apartment-style accommodations with full bathrooms and kitchenettes, and yet also expected meals to be served three times a day and a heavy level of personal care and nursing-type service to be provided or arranged for those living in the apartment complexes. Oregon covered the service component of this care under Medicaid waivers for those who were financially eligible and the prices charged for rent and services combined generally appeared to be affordable in the private market as well. I also became interested in another variant of housing with services that was developed in Oregon in the early 1980s called adult foster care (in other states it is sometimes called small group homes or family care homes) where older people with disabilities could live and receive care in private homes in residentially zoned areas where the care provider lived in the home, meals were served family style, and up to five unrelated people could live and receive care. By 1989, about 7000 older Oregonians were living in adult foster care homes, about 2/3 paying privately and the rest receiving Medicaid assistance for the service component. Middle-class seniors and their families were definitely choosing adult foster homes, and the use of nursing homes was going down in relative terms (decrease in the growth) and finally even in absolute terms. When apartment-style assisted living became more broadly available under rules developed with the aid of a broad consortium of government officials across all agencies, providers, and advocates, people with greater means gravitated to assisted living and the growth in foster care has by now settled at about 10,000 people in adult foster care, about 2 of whom are still paying privately. In Oregon, both adult foster care and assisted living appear to offer people with substantial disabilities the opportunity to live in settings that offer familiarity, acceptability, and the opportunity to exercise independence and choice over daily life, live with dignity, privacy, and according to preferences. At the same time, the tenants in these programs (a preferred term to Aresidents@ for some Oregon officials and providers) were receiving substantial help.
The promise of assisted living is that it offers a way of life that is infinitely superior to the limitations imposed by the physical settings and rules in modest nursing homes. The reality is that assisted living in its current evolution is a new phenomenon (available for about a decade) and not all programs using the term assisted living fulfil the promise of better living combined with care.
Since my first interest was piqued, I have done a number of studies of assisted living both in Oregon and nationally, funded by the State of Oregon, the Robert Wood Johnson Foundation, the Andrus-AARP Foundation, the American Association for Retired Persons, and recently the Minnesota Division of Health and Human Services. The background I bring to this includes longitudinal data from about 1200 assisted living residents and much data from assisted living providers, as well as the information from the growing body of research and commentary on assisted living. I also have a mother-in-law and an uncle who are in assisted living settings. Both have extensive care needs (she because of stroke with related physical problems and dementia, and he because of advanced Parkinson's disease). Unfortunately, both have had to buy expensive additional private-duty services, in one case to remain in the setting and in the other to get the amount of help felt necessary. So my ideal of assisted living is tempered by understanding that the ideal is not always reached.
A working definition for Assisted Living could be cast as follows:
Note that routine nursing services does not imply services given by a registered nurse; as I will point out one of the efficiencies of assisted living is using non-licensed personnel to perform nursing services, typically after teaching from a nurse and with general nurse oversight. Also note that the definition is general. In fact, settings called assisted living vary enormously within and across states.
Assisted Living is a group residential setting not licensed as a nursing home that provides or arranges personal care and routine nursing services for persons with functional disabilities.
Assisted living is a product of the interaction between consumer demand, entrepreneurial provider initiative, and state regulation. The providers initiating assisted living, be they forprofit or nonprofit organizations, have in mind a particular clientele whom they wish to serve and a range of services they wish to offer. Market experience can modify the initial goals. For example, a provider who gains experience may find it possible to provide higher levels of care than initially intended and providers have often reported that those who entered their assisted living settings had more service needs than they anticipated. Provider initiatives have also resulted in the phenomenon of many nursing homes opening assisted living wings (often just rooms and baths not apartments) and in continuing care retirement programs developing a mid-level of service between independent housing and nursing homes that they call assisted living. Provider initiatives and market forces have resulted in assisted living settings in manufactured housing (e.g. double-size trailers) in some areas. And although much assisted living is purpose- built with the whole building dedicated to assisted living, another phenomenon has been the development of an assisted living wing or an assisted living capability within ordinary housing complexes for seniors. This may entail designating and renovating part of a building for assisted living, or it may just entail an arrangement between a housing setting and a care provider so that residents in a specified number of apartments located anywhere in the building are designated as assisted living clients.
Regulation of assisted living is a state matter, and states vary widely in how they define assisted living through their licensing regulations. States will put some boundaries around assisted living by what they require, permit, or forbid. State regulations vary in their intensity and can address any of the following: the admission and retention standards governing whom assisted living settings may serve; the physical settings; staff qualifications and intensity; and programmatic requirements. Thus some states require that assisted living be limited to self-contained apartments, others allow a wide range of settings including boarding homes with shared rooms, and still others establish different types of assisted living based on setting differences. Some states include adult foster homes within or as a type of assisted living, whereas others license those settings separately. Some states mandate that assisted living settings require tenants to move out if they develop specified care needs, disabilities, or behavior (e.g., wandering, requiring help with transfers, requiring 2 people to help with transfers, being incontinent, and so on). Other states promulgate rules that prohibit asking tenants to leave when they become confused or need heavy care, and rather require the provider to meet the care needs. Some states have promulgated staffing formulas for ratios of direct care personnel and for registered nurse presence; others have not. Some states require case management and activities; others do not.
For states that fund assisted living through their Medicaid or Medcaid waiver programs for financially eligible persons, the payment rates established for the services also circumscribe who will be cared for and for how long. Some states set their assisted living service price at 50% or less of their nursing home reimbursement rates (minus shelter) for the consumers with comparable characteristics. Others see the proper ceiling as 80% of nursing home costs, thus allowing more funds for heavier care in assisted living. Some states build in rather expensive case management from state employees or contracting agencies that add to the cost of assisted living. Although assisted living settings can achieve some efficiencies as a result of not being bound by nursing home regulations (use of universal workers is one example and delegated nurse services another), if assisted living is really to provide care to tenants who resemble nursing home residents in terms of their need and also to offer a more pleasant living setting, it is unreasonable to expect that care to be dramatically cheaper than nursing home care.
State policy is sometimes ambivalent and contradictory on assisted living. On the one hand, states may use Medicaid waivers to fund the service component, which by definition is supposed to mean that all residents receiving funding need a nursing-home level of service. On the other handBas a catch 22Bthe state may prohibit persons who need nursing-home levels of care from being in assisted living, or adopt admission and retention restrictions that prohibit caring for people with other than very moderate disabilities and adopt a reimbursement level that reinforces the idea that assisted living is for light care.
The result of this evolution is that assisted living differs in size, ownership, physical surroundings, services, staff (including the mix of staff directly employed by the assisted living setting versus those employed by a collaborating outside organization), entry and exit requirements, and price. In some programs and settings, assisted living life is much like being in a private apartment with home-care services and an available restaurant for meals, whereas in others assisted living is physically like a nursing home with shared rooms and baths but usually a lower level of service.
Trends and Issues
Based on the first decade or so of its life, the following points may be made about assisted living.
- The growth has been rapid. Consumers have been attracted to assisted living, and developers have responded with more projects. In some areas, assisted living may be over-built. In all cases, assisted living became a widespread fact on the ground before regulators and policymakers were ready to respond, and the latter have largely been in a reactive rather than proactive position.
- The attraction of assisted living is based in part on the consumer preference to escape from what is widely perceived as the negative aspects of living in a nursing home. Moreover, there is substantial credible information that assisted living residents, prospective assisted living residents, and families of residents and perspective residents prefer private rooms and baths in assisted living. Tenants of assisted living assert that they value the privacy and the ability to do what they choose in their own space much more than they value activities programs.
- A large national study of assisted living done by Catherine Hawes and colleagues suggests that about 11% of all assisted living in the United States achieves both high standards of privacy and high levels of service. Unfortunately much apartment-style assisted living does not offer high levels of service and much high-service assisted living offers poor privacy.
- One of the most promising aspects of assisted living is the separation of housing and services in terms of pricing and billing. This makes it possible for people to pay for housing out of income (subsidized if needed) and for services to be publicly or privately insured or covered from a Medicaid program. It also has the potential for changing the nature of the relationship between the person receiving care and care providers if the former are tenants with rights to their housing. However, the separation between housing and services is difficult to price, and when assisted living providers are also offering services, they may send a single bill.
- Also, assisted living providers have developed a variety of formulas to bill for services: usually there is a base rate for the housing that includes some services (which may be as minimal as a recreation program and weekly housekeeping and linen laundry, or as extensive as all of the above plus medication management, bathing assistance twice a week, and the like). Then providers may develop tiers of escalating prices based on assessed levels of need, or they may charge for each additional service a la carte. It is sometimes difficult to equate the tiers properly with the amount of time needed and, therefore, a fair price. For example, an assisted living setting may decide that certain services belong to the highest tier of pricing even if they occur rarely and the individual actually receives less help than someone who received lower charges.
- There is substantial evidence, borne out too by a recent General Accounting Office study, that consumers of assisted living often fail to understand or to have explained the program's policies about retention in the setting, and its pricing policies. This has given rise to a lot of attention in the industry's accreditation efforts and in regulation about disclosure standards. However, there is also a question of whether it is appropriate to leave it up to each facility to declare in advance what services they are willing to provide and at what costs, or whether a state should develop some overall requirements.
- Some assisted living settings have given rise to innovative new ways of providing efficient, individualized services, including use of universal workers and delegated nursing services. (Giving medications is one of the biggest challenges in assisted living, and, thus, being able to train and utilize non-nursing personnel to assist is important.) Another innovation in assisted living is the Anegotiated risk contract,@ (sometimes called Amanaged risk contract@), a process of extraordinary care planning where the consumer and, if relevant, his or her agents, decide knowingly to accept risks to their health outcomes in order to exercise choice in how and where they live. These and other innovations are encouraging but not necessarily widespread. Moreover, nurse delegation and negotiated risk contracting are not effective without training in their use. Also regulators need to understand and endorse such innovations for them to work. In some states, nursing-home ombudsman and nursing-home surveyors who are not imbued with the philosophy of assisted living have responsibility for both nursing homes and assisted living and tend to use the formulas derived from the former.
- Concerns have arisen about quality in assisted living, fanned by extensive media coverage in the daily press. The few studies of assisted living outcomes do not bear out those quality concerns, but there is a general uneasiness about quality issues. On the other hand, consumer complaint often focuses on being asked to leave or being forced to buy additional services from the assisted living or from private-duty attendants to remain. A review of media exposÚs shows a persistent theme that older people and their families want to stay in the very settings they complain about rather than go to a nursing home.
- Assisted living is poorly understood by health care providers such as primary care physicians, hospital staff, and discharge planners. Given the collection of people with high care needs under the same roof, it should be feasible to develop betters ways of monitoring and handling chronic conditions on a prospective basis, but typically health care is no better coordinated for seniors in assisted living than seniors living in their own private housing. How to provide such health care without turning the settings into medical facilities is a challenge.
- Another challenge in assisted living is offering care to people with dementia while maintaining the ambiance that other residents are expecting. Some assisted living settings have established Alzheimer's special care units for the benefit both of the person with cognitive impairment (who can benefit by special programming and attention) and the benefit of persons without dementia who are using the same public space.
- Family members play a heavier role in giving direct care in assisted living than in nursing homes, in part because the unbundled pricing make it plausible for families to decide to conserve resources by performing certain tasks, and, in part, because assisted living settings tend to rely on family members to provide transportation and to interface with health care providers.
Conclusions and Recommendations
Assisted living has been called Athe killer application,@ by David Barton Smith, a historian who is writing a book about its development in New York City and environs. This is computer jargon for a change in systems that disrupts all other systems. Assisted living really represents a fresh way of looking at housing and services, albeit one with multiple variations, and it does hold promise for a positive break-through in the way services are arranged in the next century. I view the challenges as 3-fold, since it is necessary to evolve a service pattern that simultaneously: 1) offers a residential setting that is not only Ahomelike@ but actually perceived as home in terms of its amenities and opportunities for individual control; 2) offers true services flexibly to meet needs, including services that cannot be pre-scheduled, provides a link to specialized services; and 3) maintains a philosophy of consumer choice and control and Anormal@ lifestyles for people with substantial health needs.
Assisted living is definitely part of the housing picture, though obviously only a part of it. Nursing homes should also be considered housing, which allows a clearer focus on why, as housing, a consumer might find the shelter inadequate and over-priced.
Among my recommendations:
- Do not move towards federal regulation of assisted living at this time. It is too likely that nursing home regulations would be adopted and the advantages that make assisted living so attractive to consumers in some jurisdictions might disappear. Until and unless we know what regulations are appropriate, federal regulations are highly premature.
- Encourage states to develop and publicize a clear typology of the licensed entities that would meet the general definition of assisted living so that consumers would understand their choices in that state. In addition some general work in developing a classification system for Assisted Living that states could draw upon would make it easier for consumers to make decisions.
- Encourage the refinement and study of negotiated risk contracts and nurse practice act interpretations that permit delegation.
- Assisted living is unlikely to be able to provide a viable service that begins with well elderly and people who need only small amounts of housekeeping and cooking help and continues all the way to persons with severe impairments such as are found in nursing homes. The former group can probably be well maintained by expansion of in-home services. Aging in place is a confusing term, since adults do move voluntarily during their lifetimes, often downsizing their homes as their children age. One vision of aging in place for assisted living begins with congregate housing and suggests the individual should never need to move. Another view begins with purpose-built assisted living and suggests the individual who already has enough disability to need service should not need to move once they enter the assisted living setting. It seems more productive to favor the latter strategy.
- De-coupling housing and services makes for a sensible way of accounting for costs and setting prices. De-coupling housing and services is inefficient operationally if that means that different entities provide services and no economies of scale are achieved. More study of real costs related to housing and to services is needed.
- More exploration, including legal analysis, is needed to examine the extent to which a tenant renting an assisted living unit should be accorded all the rights attendant on fair housing, as opposed to being considered a resident of a health facility. The advantages to the consumer of these two scenarios need to be teased out.
- Assisted living should at a minimum include a privately occupied bedroom and full bathroom. It is hard to perpetuate the illusion of home without at least this minimum standard. Small adult foster homes also have a place in the system (and they are unlikely to offer apartments), especially in rural areas and especially for people with substantial dementia. Otherwise apartment style assisted living is a desirable standard, including the kitchenettes, since these offer the resident both function-enhancing and life-enhancing features. Showers without lips are important features in assisted living as well. Policy-makers should not be persuaded that kitchenettes are unimportant because meals are served in a common dining room. The ability to get a snack, entertain a guest, and even experience the fact of having a kitchen is a feature of normal life for most older people regardless of how little they cook. Moreover, the costs of building these into new projects is insignificant. The Commission could also be helpful in clearly enunciating that shared rooms and baths are an inadequate standard for the housing component in nursing homes and should be phased out through public policies related to new construction and major renovation.
Rosalie A. Kane
Additional Comments by Robert Mollica, Associate Director, National Academy for State Health Policy, Portland, Maine.
Robert Mollica is the nation's undisputed expert on assisted living policy, having tracked it in all 50 states in 3 successive national studies. He also is the author of a recent document on affordable assisted living that he prepared for the Coming Home Program, funded by the Robert Wood Johnson Foundation. He was unable because of scheduling to accept the Commission's invitation to testify, but has provided me with 4 recommendations that he would like to bring to the Commission's attention that speak to reducing barriers to affordable assisted living. I have added his recommendations below. Dr. Mollica can be reached at email@example.com
1. There is a need to simplify combining Medicaid waiver services and Section 8 rent subsidies. The process for accessing both at the same time is very difficult if vouchers are not set aside for assisted living or applicants get preference on the waiting list. Public Housing Agencies may not know about HCBS services/programs, and may not coordinate their activities with case managers. Waivers may have waiting lists. Providers may not want to participate (hard to deal with at a national level, may require state intervention with rates that are adequate to attract providers.)
2. Eligibility gaps exist between housing assistance and Medicaid. AL settings with housing subsidies set aside units for tenants with income below 50% or 60% of the area median income. Medicaid eligibility is either through SSI, Medically Needy or 300% of SSI. There is a gap between 300% of SSI and 50% of median income in all but the poorest counties in a few states.
3. An effective S8 and HCBS combination may need project-based vouchers and slots since any affordable AL needs assurance that services and subsidies will be there. On the other hand, this gets to sound anti-consumer choice and perhaps creating a nursing home like entitlement to the provider, not the beneficiary.
4. Aging in place can be undermined if tax credit rules don't allow facilities to offer continual or frequent medical services. ALs with RNs 12 hrs/day, LPNs or licensed nurses aides available 24 hours a day are considered to offer continual or frequent medical services.
Rosalie Kane can be reached at
420 Delaware, St. SE,
MMC 197, D-527 Mayo Building,
Minneapolis, MN 55408