A shortage of nurses and the increasing care needs of residents helped drive up assisted living costs more than costs for nursing homes, adult day centers or home healthcare over the past year, according to Genworth Financial.
Between 2017 and 2018, the annual median cost of care at assisted living communities increased 6.67%, more than any other long-term care setting studied in the company’s 15th annual Cost of Care Survey, the results of which were released Tuesday. After assisted living, the annual median cost of care was highest for a semi-private room in a nursing home, at 4.11%.
Several factors, according to Genworth, are driving up the cost of care across all care options, including a shortage of skilled workers; higher minimum wages; changes in overtime rules; challenges in attracting and retaining qualified workers; a rising incidence in dementia, increasing the need for more specialized care and higher hourly wages for workers providing that care; and the need for more specialized care in general as older adults wait longer than they should to seek long-term care. Two factors, however, stand out for assisted living, Genworth said.
“In the interviews we conducted with providers to better understand the drivers of increased costs, the assisted living providers echoed the major drivers we heard across the board, but two of those drivers seemed to be more pronounced: the shortage of nurses and increased care needs,” Genworth spokeswoman Julie Westermann told McKnight’s Senior Living. “One ALF provider commented that due to the more specialized care being required and the trend toward more time being needed with each individual, assisted living facilities are starting to look and act more like nursing homes (whose higher prices are more reflective of these cost factors). There is also a component of square footage of the room and additional amenities that drive up the price of ALF.”
Based on the five-year compound average growth rate, the largest increase in cost of care, at more than 3%, occurred within the nursing home category. The increase for assisted living based on the five-year CAGR was 3%.
Across all settings, the annual median cost of care now ranges from $18,720 for adult day care services to $100,375 for a private room in a nursing home. The average rate at an assisted living community, according to Genworth, is $132 per day, $4,000 per month and $48,000 per year.
During the 15 years of the survey, the cost of care has increased 67% in assisted living communities and 54% in private nursing home rooms. Home care costs have increased significantly over the past two to three years after remaining flat for much of the time of the survey, Genworth said.
More than 49,000 providers nationwide were contacted to complete 15,000 surveys for assisted living facilities, nursing homes, adult day health facilities and home care providers.