With a rapidly aging population that will need access to affordable care and services, the assisted living model is the one that makes sense from a quality of life and fiscal perspective, according to Argentum.
The senior living trade association unveiled “The Value of Assisted Living for America” white paper, completed in partnership with Pinnacle Quality Insight, to make its case for the sector and provide the data to back it up.
“This report makes clear that assisted living provides more of what matters when it comes to helping seniors stay as healthy, happy and independent as possible,” Argentum President and CEO James Balda said. “Each day, 10,000 Americans turn 65, and 70% will likely need some form of long-term care in their lifetime. Put simply, they will need a caregiver, and home- and community-based assisted living provides the most cost-effective, patient-centered approach to meet the news of our rapidly aging population.”
Residents, families ‘love the solution we’re providing’
According to a survey by the association, 90% of today’s approximately 2 million assisted living residents living in more than 30,000 communities across the country report “good or great satisfaction” with their communities.
Additionally, 96% of survey respondents reported that their communities provided sufficient healthcare and access to care, almost 75% said that assisted living improved their quality of life, and 70% indicated that their health outlook improved as a result of the care they received.
“The story we’re telling is that our residents and our family members love the solution we’re providing,” Pinnacle Quality Insight CEO Chris Magleby said during Argentum’s Public Policy Institute in Washington, DC, held earlier this week.
Compared with average customer satisfaction ratings, senior living is outperforming every other industry on the American Consumer Satisfaction Index, a national indicator of the quality of economic output for goods and services as experienced by consumers of that output. Assisted living, Magleby said, is outperforming the US average customer satisfaction rating by nine points.
Residents weren’t the only ones expressing satisfaction with their assisted living communities.
Family caregivers who cut back on work hours due to caregiving responsibilities were able to jump back into the workforce after moving a loved one to assisted living — a $40 billion stimulus into the economy, according to Magleby.
“What that means is that’s having an impact on the overall health of the community on population health, but it also means those people are freed up to enter back into the workforce,” Magleby said. “The story they’re telling is that our residents and their families love the solution we’re providing.”
Assisted living provides a cost-effective model
Argentum’s white paper also tracked the financial impact of assisted living.
Assisted living emerged as the most cost-effective model of professional caregiving, costing significantly less than skilled nursing facilities or around-the-clock home health aides. As of 2021, the cost of a private room in assisted living was less than half that of a nursing home and one-fifth the cost of home health aides.
As of 2021, the annual cost of a private room in assisted living averaged $54,000, compared with $108,408 in a nursing home and $235,872 for a home health aide providing 24/7 care. A 2021 Genworth Cost of Care survey calculated average monthly costs for long-term care at $4,500 for assisted living, $9,034 in a nursing home and $19,656 for a home health setting.
Assisted living also reduced Medicare and Medicaid costs, as well as veterans’ care costs, according to the report.
Care coordination and community activities that reduce social isolation indirectly save Medicare billions of dollars annually in reduced hospitalizations, Argentum said.
A 2017 study by the Agency for Healthcare Research and Quality found the average cost of a Medicare fee-for-service hospitalization was $14,700 — a cost estimated to be $26,460 today. Care coordination programs for even half of assisted living residents would create a $13.2 billion savings to Medicare, according to the report.
Without assisted living as an option, as many as 61% of older adult residents would be forced into costlier skilled nursing facilities at a cost of $43.4 billion, crippling state and federal Medicaid budgets, according to Argentum. And providing access to assisted living for veterans would save the Department of Veterans Affairs office $69,101 per placement per year.
The report also outlined how assisted living reduced lost work productivity.
The Family Caregiver Alliance reported that 70% of working adults who were family caregivers experienced work-related difficulties, including cutting back hours, taking a leave of absence or receiving a disciplinary warning about performance or absenteeism. The survey estimated that 61% of caregivers who work outside the home experienced at least one employment change due to caregiving responsibilities.
Blue Cross and Blue Shield estimated that family caregiving led to the loss of 656,000 jobs, with an additional 791,000 caregivers experiencing absences from work. The estimated direct annual economic effect of those job losses and absences was $43.9 billion, with an indirect cost of $221 billion in lost productivity. Family caregivers also reportedly lose an estimated $3 trillion in wages, pensions, retirement funds and benefits due to caregiving responsibilities.
“By easing the burden on informal caregivers, assisted living can increase productivity and the economic output of families,” the report reads.
Assisted living needs help
To continue providing the savings documented in the report, Argentum said, policymakers need to pay attention to the workforce shortages in the long-term care industry, which will “eclipse” those in all other healthcare sectors.
By 2040, long-term care settings will have 20 million job openings — 3 million of those alone in senior living, according to Argentum’s “Workforce Projections for Long Term Care Sectors” report.
The federal infrastructure already is in place, according to the association. Retooling current federal workforce development programs to better meet the needs of the long-term care industry could have a significant effect on labor shortages.
“The second living workforce shortage is at crisis levels now, but if policymakers fail to act, it could soon become a catastrophe,” the report concluded. “The expected workforce crisis in long-term care necessitates bolder action than we’ve seen up to now. Expanding seniors’ access to assisted living communities and developing the workforce to meet future demands will ease fiscal pressure on vital public health programs and improve the quality of life for our rapidly aging population.”