John O'Connor
John O’Connor

You’d think by now I’d have learned my lesson.

When I wrote a column last year suggesting it was not very difficult for nursing homes to pad their Medicare payments, boy did I catch it. Operators, vendors and even a few association people practically lined up to tell me how wrong I was.

If it weren’t for Google and one of the largest operators agreeing to pay more than $100 million to settle billing irregularities, I would have felt way off base.

But hey, even journalists have feelings. At least, most do. And it did hurt that some of the people I know and respect were suddenly giving me the look CNN’s Jake Tapper likes to throw Kellyanne Conway’s way. The available facts might have been on my side, but it didn’t seem like anyone else was.

Still, part of the job is to tell the truth. Even if the intended beneficiaries of my keen insight are in no mood to hear it. So it is with more than a little trepidation that I’m about to point out two simmering problems facing senior living. Challenges that in fact are getting worse by the day.

The first is this: Despite the lip service, there is scant little affordable seniors housing being built right now. To be sure, there are some notable exceptions. But the reality is that most builders are anticipating monthly per-unit payments that test the limits of what’s affordable.

But don’t take my word for it. According to Genworth Financial’s most recent Cost of Care Survey, monthly costs for assisted living are $3,628 a month on average, or $43,539 a year. Yet the median income in our nation was not terribly better than that in 2015: $56,516. Can you see why we might have a math problem on our hands?

Which leads us to problem number two: Simply put, too many assisted living communities are being built. Already, NIC and others are reporting that occupancy levels are trending south.

At this point, we are not nearing a catastrophe. But you don’t have to be an expert to realize that many operators are not listening to the market. And as long-term strategies go, that’s probably not a good one.

But hey, you didn’t hear it from me.

John O’Connor is editorial director of McKnight’s Senior Living. Email him at [email protected].