It should have been a great year for the bottom line.
After all, rates charged by assisted living operators rose by a robust 4.65% in 2021, according to Genworth’s annual Cost of Care Survey. Nationally, the annual median charge for a private, one-bedroom unit was $54,000 per year ($4,500 per month or $148 per day), the study found.
In normal times, a rate increase would have been pretty wonderful news, at least from an operator’s standpoint. But these are hardly normal times. An ongoing pandemic has been throttling this sector for about two years now. As if that’s not bad enough, there’s a new foe making its presence known: inflation. That’s senior living’s latest challenge.
And after years of laying low, inflation is back with a vengeance. The consumer price index rose by a positively frightening 7% last year, if Labor Department figures are to be believed.
So even with the 4.65% rate hike, assisted living operators couldn’t keep pace. For that, they can thank rising labor costs, along with paying more for just about anything else that had to be purchased.
And from the looks of things, the reality of the industry’s latest challenge is about to get worse. For that, we can thank Russia, which is in the midst of invading Ukraine.
By some estimates, gasoline alone might soon top $5 per gallon at the pump. Add that to the ongoing poop storm, and it’s no wonder some economists see double-digit inflation as a real possibility for 2022.
So consider yourself warned about your latest challenge: What you pay for just about everything will be shooting up quickly this year. But maybe not as fast as your blood pressure.
John O’Connor is editorial director of McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care.
