Senior Housing and Assisted Living

By Doug Fullaway, President & COO, Vigilan

In a previous article, we explored the staffing in assisted living based on ratios versus staffing based on acuity. Ratios are the most commonly used, but it is also clear there is a tendency to overstaff and in all cases, ratios ignore the actual changes in acuity for an individual resident. Staffing based on acuity is preferred, but not widely used as it seems to be too difficult to implement. Let’s look at one method that can be used to develop an easy-to-use acuity staffing tool.

The first step is to build a spreadsheet with a column for each service you are offering and a row for each resident. For bathing you could look at your own assessment document and you might add the following columns: Independent, Provide Reminders Only, Partial Assistance, Full Assistance.

Enter a row just above all of the resident’s names that says, “Standard Time.” In that row enter a standard time. But where do you get that time? Start with an estimate. You know a great deal already and these times can be revised as you learn over time. And be consistent in the way you set the times. For example, hours per week or hours per month is a reasonably simple way to think about the services. Full bathing assistance might be 30 minutes per bath and delivered twice each week so one hour per week could be a good place to start with a standard time for bathing.

Now fill in the cells for each service that a resident receives services. Your spreadsheet is filled out and ready for some simple analysis.

Add totals at the end of each row and each column. You will see the acuity as measured in hours for each resident. Does this comparison across the residents seem reasonable? Does it seem correct that Martha takes twice the time as most other residents? Is John really only taking three hours a week for all of the services you provide? If not, perhaps you need to start adjusting the time for that resident. If the standard time for full bathing assistance is one hour per week and you know John is just difficult and requires more time, then perhaps the cell for his bathing needs to say 1.5 hours.

Now look at the totals for each column. You will likely see the amount of time for medication management for each resident is about six hours per month and is the largest single time for any service. If this is not the case, then perhaps you are doing some work that does not show up on the assessment. For example, does the nurse provide a monthly review of the medications? And does it take about 20 minutes for each resident? Time to add a column to reflect the time the nurse is actually putting into the work for that review.

Build a summary for each job skill of the total time for the period. Caregivers deliver the care for many of the columns.

You will probably end up with something that looks like this.

As residents move in, add a row. As they move out, remove a row. As you update an assessment for a resident, update the cells for that resident. You can gather the caregivers who take care of Mary Albright and have a discussion to see that all services being delivered are documented. You can also ask how long it takes to do the job for each service for Mary.

You can also make the standard times more accurate by actually measuring how long it’s taking for that service for about 30 observations and then take an average time. Adjust the time upward by 20% to allow for lunch breaks, taking time to talk with residents, filling out reports, etc.

You should see several benefits from your use of an acuity-based staffing approach. You will better understand where your staff time really goes. You will adjust your staffing based on changes in census AND based on the change in care you are delivering to each resident. (Ratios just don’t do this!) And our analysis shows you will have enough staff, but not too much, which should save you money.

About the Author:

Doug Fullaway is president and COO of Vigilan, a provider of software for senior living management, and has over 30 years of management experience. In 2002, Doug entered the senior market by joining the executive staff of Vigilan and is the proud owner of several senior communities.  Prior to Vigilan, Doug held positions in distribution, manufacturing, customer support, sales, and general management in the U.S., Europe and Asia.  Doug earned his undergraduate degree in industrial engineering from Oregon State University, served as an infantry officer in the US Marine Corps and graduated from the Harvard Business School.  In his spare time he loves to snow ski, fly a Cessna and go fly-fishing. He can be reached at dougf@vigilan.com.

Can you afford to get older?  According to a new Harris Poll, most people are not confident that we as a country are prepared to handle the costs generated by an aging population as Baby Boomers grow older.  The findings of the survey suggest that many people are aware of the challenges yet are willing to consider possibilities on addressing solutions such as encouraging people to work longer and to increase the age of eligibility for Social Security and Medicare.  Unsurprisingly, raising taxes or cutting benefits are much less acceptable. However, raising taxes is less unpopular than cutting benefits.

Surveying 2,576 adults online, Harris Interactive found the public is split on whether we will be able to afford the cost of many more old people (33%). According to Harris, 38% said will not be able to do so or 29% are not sure. More younger people (47% of Echo Boomers) and 51% of Gen Xers (aged 34-45) than older people think we will not be able to afford it.

Other results from the survey found:

• A 47% plurality of adults – but less than a majority – thinks that it is a good thing that life expectancy is increasing and that there are likely to be many more old people. Older people are much more likely than younger people to believe this; 58% of people over 65 think this but only 35% of “Echo Boomers” aged 18-33. While only 20% of adults think this is a bad thing, fully 34% are not sure.
• When confronted with a list of five possible ways of addressing the future cost of Social Security and Medicare, a third (35%) of adults say they don’t favor any of them. Possibly they do not believe the underlying premise that there is a problem. By far the most people (47%) believe we should “encourage people over 65 to work.” The next most acceptable option would be to increase the age of eligibility for Social Security and Medicare (30%). Only 21% think we should raise taxes while very few people (9%) think we should reduce Medicare or Social Security benefits.
• When told that “most economists think it is inevitable that we will have to do one or more of these things, whether we like it or not” and asked to pick two, the same pattern emerges. Fully 61% favor encouraging more older people to work, and 46% favor increase the age of eligibility. Almost a third (31%) choose increased taxes while very few favor cutting benefits for Social Security (10%) or Medicare (12%).
• A large 68% to 16% majority (with 15% unsure) believes “we as a society are not adequately prepared to spend more years caring for our aging parents than for our children.”
• A 50% to 26% plurality of those aged 18-64 believe that “our health care system, as it is now,” will not be able to handle the large number of older people who are likely to have chronic medical conditions such as heart disease, diabetes and arthritis.
• When told that “many economists think that, to pay for Social Security and Medicare . . . many more people should retire later and continue working after 65,” a large 64% to 25% majority of those under 65 agrees with this.

“These findings are interesting and important,” said Dr. Robert Butler, the president of the International Longevity Institute. “It is good to see public support for people working later in their lives. This would not only reduce the economic problems addressed in the survey; research shows that people with purpose and who have something to get up for in the morning live longer and better lives. There is also evidence that increased longevity creates new wealth.”

Most People Believe that We Are Not Prepared for Increase in Longevity and Number of Old People

The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign(TM) group of skilled nursing, rehabilitative care services, home health, hospice care and assisted living companies, recently reported record results for the first quarter of 2010.  The Ensign Group separately announced the acquisition of two Texas skilled nursing facilities and the operating assets of Horizon Home Health and Hospice, a home health and hospice agency based in Meridian, Idaho.

Financial Highlights Include:

• Adjusted earnings were a record $0.45 per diluted share, up 15.4% over the first quarter of 2009;
• Total revenue was a record $154.2 million, up 18.3% on a consolidated basis;

• Same-store skilled mix increased by 363 basis points to 54.0%;
• The company’s same-store skilled revenue increased by 12.4%, notwithstanding the negative impact of Medicare’s 1.1% net market basket decrease, which took effect on October 1, 2009;
• Consolidated EBITDAR climbed 19.4% to $25.2 million, with consolidated EBITDAR margins of 16.4%; and
• Net income rose 18.0% to $9.3 million for the quarter.

The Ensign Group also announced the acquisition of four long-term care facilities and a home health and hospice business in three separate transactions between January 1, 2010 and May 1, 2010. The real estate and operations were purchased with cash, and include:

• In Idaho, Emmett Care & Rehabilitation Center, a 72-bed skilled nursing facility in Emmett, and Parke View Rehabilitation & Care Center, an 86-bed skilled nursing facility in Burley, on January 1, 2010;
• In Texas, Heritage Gardens Healthcare Center, a 140-bed skilled nursing facility in Carrollton, Texas, and Silver Springs Healthcare Center, a 144-bed skilled nursing facility in Houston, Texas, on May 1, 2010.
• And in Idaho, Horizon Home Health and Hospice, a home health and hospice agency based in Meridian, Idaho, also on May 1, 2010.

A new low-tech elder monitoring service called FineThanx recently made its debut that utilizes only the existing phone system at home.  The system calls twice a day find out how an aging loved one is doing and reports the response or lack thereof in either case.  The automated phone service checks in with seniors once or twice a day.  If no one answers, or if a client needs assistance, the system immediately calls a "care circle" of people who can seek care for the client.  If the client is fine, the system sends reassuring e-mail messages to the client’s families, friends or health care professionals.  FineThanx charges $34.95 a month for the service and offers a seven-day free trial period.

Costs for long term care in the US continue to rise but a recent study shows the cost for in-home care is rising at a much slower pace.  According to Genworth’s 2010 Cost of Care Survey, the cost to receive care in the home has risen at an annual rate of just 1.7 percent over the past five years. That compares to annual increases of 6.7 percent for assisted living facilities, and 4.5 percent for a private room in a nursing home, over the same period.  Genworth states that 73% of its initial benefit claims are for home health care.

Some highlights include:

Nursing Home Costs Continue to Rise

In 2005 the median annual rate for a private nursing home room was $60,225, compared with the 2010 median annual rate of $75,190. This means that Americans can expect to pay approximately $14,965 more per year today for a nursing home than they had to pay in 2005.

Home Care Costs Holding Steady

In contrast, rates charged by home care providers for "non-skilled" services have not experienced significant growth over the past five years. The national hourly private pay median rate charged by a licensed home health agency for a home health aide was $17.50 in 2005, while the 2010 hourly rate has gradually risen to $19. Home care rates have remained in check partly due to increased competition among agencies, the availability of unskilled labor, and the absence of costs associated with maintaining stand-alone health care facilities.

The Least and Most Affordable States for In-Home Care

Genworth’s 2010 Cost of Care Survey revealed that Alaska, Minnesota and Rhode Island are the most expensive states for home care, at a median rate of $25 per hour for a home health aide provided by a state-licensed agency. The most affordable states are Alabama and West Virginia, at a median rate of $15 per hour.

"Long term care is not just about nursing homes anymore. Care options have expanded dramatically over the past several years to include a far greater choice of settings that reflect the ways in which individuals prefer to receive care," said Buck Stinson, President, U.S. Life Insurance Products at Genworth.

The U.S. Department of Health and Human Services Office on Disability recently announced the award of over $6 million under the American Recovery and Reinvestment Act of 2009, to establish a Center of Excellence in Research on Disability Services, Care Coordination and Integration.  The contract was awarded to Mathematica Policy Research for a two-year period and is aimed at building the infrastructure necessary to support and conduct research on the effectiveness and comparative effectiveness of systems of care for people with disabilities. 

"With the establishment of a Center of Excellence in Research on Disability Services, Care Coordination and Integration, we will make necessary data improvements to better understand health and support services for people with disabilities," said HHS Secretary Kathleen Sebelius. "The data collected will allow the Office on Disability and the Centers for Medicare and Medicaid Services to examine the effectiveness of different services and supports being provided, and in turn, improve care for people with disabilities."

Nationwide Health Properties, Inc. (NYSE: NHP) last week announced results of operations for the first quarter ended March 31, 2010. NHP saw revenues increase by 5% compared to Q1 2009 to $102 million.  The company showed a lower net income of $31 million in Q1 2010 versus $49 million in Q1 2009 that included a $21 million gain on sale.  NHP’s diluted funds from operations (FFO) for the first quarter was $64.9 million compared to $61.5 million in 2009.

"We began 2010 with a strong balance sheet and an enviable liquidity position. Leveraging our excellent financial position with improvements in the capital markets and the economy, we acquired during the first quarter seven medical office buildings and made an $80 million loan secured by 26 medical office buildings located in seven states," commented Douglas M. Pasquale, NHP’s Chairman and Chief Executive Officer. "Subsequent to quarter end, we have completed an additional $58 million of investments bringing the year to date total to $438 million," Mr. Pasquale added.

NHP Q1 2010 Earnings Release

The government of Canada and Ontario recently announced the funding of approximately $4.8 million for 40 new affordable housing rental units for seniors and persons with disabilities.  These 40 affordable rental units are part of an 80-unit project with approximately $4.8 million in federal and provincial funding is complemented by $10.1 million in municipal financial incentives.  The Canada-Ontario Affordable Housing Program Agreement comprises a commitment of $301 million from each of the two senior levels of government. In total, the federal, provincial and municipal governments will invest at least $734 million in the program, which will provide affordable housing for up to 20,000 households in Ontario.

"Locally, this achievement gives a hand-up to individuals and families who need safe, affordable housing that meets their needs," said Minister Raitt. "Our government is investing in this project to get the local economy moving, creating immediate jobs and economic stimulus for the community."

Thinking about retiring in Mexico?   How about developing senior housing and living product south of the border?  The opportunities exist but major challenges remain to make retiring south of the US border a slam dunk.  A group of business executives known as AMAR held a conference in San Antonio this past weekend to promote development of senior living in Mexico.  The group consisted of consumers, marketing professionals, real estate developers and various finance professionals and had sessions for both business representatives and consumers.  The conference was primarily spoken in Spanish with translation to English as the majority of attendees were from Mexico.  Some of the key take aways from the conference were:

• All owners and operators consistently stated that costs are 50-60% less in Mexico than in the US or Canada for physical development & final costs.  This was a consistent subject when listening to different developers in all parts of Mexico. 
• Healthcare solutions exist at various price ranges throughout the country including coverage for catastrophic emergencies depending on Visa status
• Most developments are for independent living (i.e.  homes and fractional residences)
• Proximity to Airports and Border are critical.
• Safety.  Despite the press, retirement in Mexico remains safe.  Presenters stated that the conflict exists between the druglords and the federales / police, not the retirees.
• Some developers are repositioning their properties as retirement locations rather than second home destinations.  Sales pitch is still resort lifestyle with CCRC type of amenities.
• Connectivity.  Researchers state those who are retired in Mexico today are in communication telephonically and via the Internet on a regular basis not much different than in the US.
• Medicare in Mexico.  This is the most critical part to explosive growth for retirement in Mexico.  While there are initiatives to bring Medicare from the US to Mexico, participants stated that this is a big wish.  Access to healthcare providers is top priority in those looking at retiring and those who already have retired in Mexico.

Final thoughts:  Retiring Mexico is a good alternative if you are looking for a temperate retirement, are mobile, in reasonably good health and have a sense for adventure.  There are groups of Americans retiring and living in Mexico in growing numbers so finding a community with Gringos is not out of the picture.  For development, until there is some kind of relationship between the US and Mexico for medical coverage (think NAFTA for healthcare…), Mexican retirement is a niche that is a viable alternative for a small group of American retirees.

Look for a few follow up articles from the conference focusing more specifically on segments of retiring in Mexico.

For those of you who stayed in Saturday night, hopefully you caught the “senior special” on Saturday Night Live.  SNL had some of its highest ratings since the 2008 presidential elections with its 88 year old host, Betty White.  During her opening monologue, White talked about generational differences (not knowing what Facebook was). The clip below shows White being interviewed by Tina Fey regarding the US Census.  Kudos to Betty White who now is the unofficial spokesperson for being “cool” at 88 years old.  Rumor has it she was out partying with the cast until 3 in the morning.