ASSISTED LIVING: Boom and Bust or Trend of Future?
An anticipated surge in the elderly population has spurred an assisted-living goldrush, but industry analysts are warning the market may be saturated while advocates for the elderly decry the state's lack of oversight. The Orange County Register reports that a new breed of companies has created more than 100,000 beds statewide in the last ten years and that number is expected to double by 2010, drawing criticism from Pat McGinnis, director of California Advocates for Nursing Home Reform. He said, "The problem is the industry has grown too fast, too quick. We have very vague criteria about who can run these homes. At the same time, the state has stretched the regulations to let people with pretty critical health conditions live in these facilities -- including hospice patients, Alzheimer's patients and so on. I worry about all of them."
On the High-End
Some of the facilities clearly target an affluent demographic, charging up to $4,250 a month for luxury furnishings and an ocean view in addition to meals and medical care. Sunrise Assisted Living Director Avi Elias said that baby boomers want quality care for their parents, and eventually themselves. But the high- end niche may be one of the few "pockets of opportunity" described by investment analyst J. Paul Buchanan. He said the industry is overbuilt, predicting "larger, well-managed homes will continue to flourish, but smaller operators ... may continue to fail or will be acquired by bigger operators" (Haas, 3/28).
Keep Close Watch
A Los Angeles Times editorial calls for increased oversight of assisted living facilities in light of recent collapses. The paper touts legislation introduced last year by then-state Sen. Herschel Rosenthal (D-Los Angeles) that would have created financial databases for the state to evaluate the financial health of facilities, and a pending bill by Assemblyman Kevin Shelley (D-San Francisco) "that would allow the state to collect fines from care facility owners who evict their residents without notice." The Times concludes, "[L]egislators approved a bill last year requiring nursing homes that declare bankruptcy to notify state officials. Good enough, but not much help to the feeble and often sick seniors who find themselves about to be tossed from their homes" (3/29).