By JIM RENDON
1. We're a short-term solution.
Since 1981, when assisted-living homes first made their debut as a sort of midpoint between home and a nursing home, they've only grown in popularity. Meanwhile, as the number of facilities and residents served has ballooned, so has the diversity of needs. Some homes cater to those who have trouble cooking or doing their own laundry; others, to those with dementia, loss of mobility and even more serious issues. But government regulations that could help protect families with a loved one in an assisted-living facility who is suffering from a chronic or degenerative illness are still few and far between.
Existing rules vary immensely from state to state, and even within a given state. In Florida, for instance, there are four different types of licenses for varying levels of care. There is no national standard for training: While some states require upwards of 25 hours of training for staffers, others have no minimum, only requiring that certain topics be covered. Furthermore, cautions Eric Carlson, directing attorney with the National Senior Citizens Law Center, though most facilities are required to keep at least one person on site overnight, in some cases that person may not be required to be awake.
Still, many people choose assisted-living facilities over nursing homes precisely because they offer residents more freedom in a less institutional and far less expensive setting. Indeed, residents who value their independence are often loath to give it up: People with severe health problems who in the past would have been moved to nursing homes are now staying longer in much less expensive assisted-living facilities, says Brian Lee, executive director of Families for Better Care and former director of Florida's long-term-care ombudsman program. And since the staff isn't required to be trained to handle these health issues, he says, "assisted-living facilities can be more dangerous than nursing homes."
2. If we don't like you, you're out.
Knowing the limits of the care a facility can provide -- and the thresholds of behavior or health that will lead to eviction -- is as simple as looking at its contract, says Dave Kyllo, executive director of the National Center for Assisted Living. But who decides when those thresholds have been met? Not residents or their physicians. Management. People may be asked to leave because they are disagreeable, their health needs have become unpleasant, or they are transitioning to a less lucrative payment source (read: Medicaid), says Carlson. In those cases, it's easy for a facility to claim that they can no longer care for an individual, whether or not that is actually true.
Unlike nursing homes, assisted-living facilities don't have an industrywide process for appealing such decisions. California is one of a handful of states that require facilities hoping to evict someone to go to court (most states are silent on the process for eviction). But residents do have protections, even in states that do not have laws that pertain directly to evictions from assisted-living facilities, says Rajiv Nagaich, an elder-law attorney in Washington state. Local landlord-tenant laws and the Americans With Disabilities Act can be used to fight an unwanted eviction.
3. Ailing residents are cash cows.
Three-quarters of facilities charge residents extra for a variety of services -- from bringing meals and delivering packages to making the bed and administering pills. "There is no limit on what you can charge for," says Jody Spiegel, director of the Nursing Home & Assisted Living Advocacy Project.
One Los Angeles assisted-living facility began charging a resident, Carmen Lashley, extra fees when her health began to decline in 2011: $500 a month for administering her medication, dressing her, bathing her, wheeling her to meals -- on top of rent, and she was on a fixed income, says her daughter Maxine St. Prix. In January, Lashley was rushed to the hospital with a breathing problem; a physician recommended she move to a nursing home, so St. Prix notified the assisted-living facility. Still, the facility tried to collect one last month's rent and the extra $500 in fees, even though the contract indicated that in the event of a medical emergency, she did not have to give 30 days' notice. "A collections agency even called my daughter," says St. Prix.
Such charges are usually detailed in the contract. But families facing an important and often emotional decision don't always read the agreements carefully. That's why some insiders recommend consulting an eldercare lawyer before signing on the dotted line. Facilities aren't trying to deceive prospective residents though, says Greg Crist, a spokesman for the American Health Care Association: If someone asks about a charge, it will be explained, and residents should expect increases in charges as labor, food and fuel costs rise.
4. Our rates aren't set in stone.
The housing crisis and the recession have had a significant impact on the assisted-living business. According to the National Investment Center for the Seniors Housing & Care Industry, occupancy rates are at 88.7 percent for 2012, down from their peak of 90.6 percent in 2006. Often, seniors move into assisted-living facilities after selling their homes, but with housing prices down -- especially in retirement hot spots like Florida, California and Arizona -- fewer seniors have the money to move. And in some of the softer markets, overbuilding too has taken a toll on the industry: The Chicago area's vacancy rate is down to 83.7 percent, with 453 units under construction; St. Louis, with 84.7 percent vacancy, saw inventory grow by 8.2 percent last year, according to the National Investment Center.
Eager to lure potential residents, some places have begun enlisting marketing firms to help seniors sell their homes. Others have begun offering bridge financing to help people move into a facility while they wait for their house to sell, says Suzanne Modigliani, a Brookline, Mass., geriatric care manager. Furthermore, some communities are more competitive now than they were prior to the recession, and more are offering incentives such as discounts off the community fee or off the first few months' rent. "Don't assume that the listed rates are the rates they charge everyone," says Nagaich. Depending on how many open spots a facility has, he says, potential residents may be able to negotiate the base rent down, or include a clause that bars raising prices for several years or even eliminates some of those pesky charges altogether.
5. Did we say we would lock the doors?
From a business perspective, Alzheimer's and dementia sufferers are a huge market: More than 40 percent of assisted-living residents have the diagnoses. Many facilities advertise specially trained staff, customized activities and locked floors for those who wander. But critics say it can be hard to differentiate a sales pitch from a real service, and government regulations of dementia care tend to be minimal. "The law has not kept up," Spiegel says.
Susan Dukow placed her mother in multiple assisted-living facilities in Los Angeles that promised specialized Alzheimer's care. But her mother got repeated urinary tract infections, she says, because facility staffers did not clean her properly. Furthermore, she says, at one facility, patients could get out of the locked ward, and scheduled activities rarely occurred as advertised. "They sold you on these incredible activities going on, and it was a joke," she says. (The facility replies that while the doors do open if pressure is applied for more than 15 seconds, staff is notified automatically, and that not every activity was appropriate for every resident.)
Beth Kallmyer, vice president of constituent services with the Alzheimer's Association, advises potential residents concerned about such issues to ask specific questions about the type of care and activities available and to look for competitive staff-to-patient ratios.
6. Advertised amenities are a red herring.
Everyone wants to believe that they will age well -- that dementia, broken hips, and other debilitating elements of aging will not happen to them, says Carlson. To cater to that image of an idyllic, healthy, comfortable retirement, many homes spend money creating a beautiful atmosphere -- expensive carpet in the common areas, trees in the courtyard, flowers in the dining room.
While that has value, says Los Angeles geriatric-care manager Bunni Dybnis, it can keep people from making a clear-eyed assessment of the level of care offered. Compared with providing top-level care and a high staff-to-resident ratio, carpeting and paint are cheap. "Don't be fooled by the decor. There is so much denial and such an appeal to that psychology," says Charlene Harrington, a professor emeritus at the University of California, San Francisco. Harrington advises potential residents and their families to talk to staff and other residents, eat a few meals to assess the quality of the food and take time to get a feel for the community.
7. We're not running a charity here.
A whopping 82 percent of assisted-living residences are for-profit -- owned by publicly traded companies, individuals or private-equity -- compared with 68 percent of nursing homes. Though nursing homes get the majority of their income from very low-paying Medicaid recipients (for assisted-living homes, the proportion is 19 percent), profit margins have been increasing in recent years for those that are privately held, according to research firm Sageworks. In 2006, profit margins were just 3.5 percent. But by 2011, they had nearly doubled to 6.4 percent -- slightly less than average for all privately held companies, but far above the 1.5 percent average for publicly traded nursing homes -- and they're rising again this year.
Libby Bierman, an analyst with Sageworks who conducted the research, says that much of that profitability is due to decreases in staff. Payroll fell from more than 45 percent of sales in 2004 to 38 percent of sales this year. And often those payroll cuts can quickly translate into deficiencies in care, says Lee, the former director of Florida's ombudsman program. In a study conducted by Harrington, the top 10 for-profit chains had 41 percent more serious deficiencies -- such as failure to prevent bedsores, weight loss, falls and infections -- than government facilities. Deep cutbacks in staff only add to the problem, says Harrington: "When they have really sick people, it is a disaster."
Crist, of the American Health Care Association, says the number of government five-star rated nursing homes is up and the number of one-star facilities is down, and that profits are not always wrung from staff cuts but can come from ancillary businesses. "Residents by and large still get care, regardless of the ownership structure," he says.
8. We pay people to put you here.
With so much to know about these facilities, two types of consulting business have sprung up: One that you pay for, and one that is paid for by the facility you move into. The differences aren't insignificant.
Among free referral services are outfits like A Place for Mom, the country's largest referral service, now majority owned by private-equity firm Warburg Pincus, which has 250 agents that contract with more than 18,000 facilities across the country. If one of its agents places a senior in a facility, the facility will pay the company close to a month's rent. But placement services generally won't recommend a facility that won't pay that finder's fee -- even if it may be a better fit for the client. More troubling, as long as the facility will pay that fee, agents at A Place for Mom will only stop referring patients to a facility if it receives a stop-placement order -- the harshest regulatory penalty a state can impose short of revoking a license.
After a Seattle Times investigation into widespread problems with these free referral services, including many at A Place for Mom, Washington state enacted regulations designed to curb some of the worst practices. Now, such services are required to disclose their commissions and the last time they visited a facility, and they're not allowed to refer people to facilities that are in violation of the state's licensing laws. A Place for Mom CEO Sean Kell, a former executive with Expedia.com and Hotels.com, says the company worked with lawmakers on the reform bill, that the company is in full compliance with the law, and that some of its regulations are more comprehensive than those now required. He says the firm's agents are most knowledgeable about the facilities it contracts with, and notes that the company is always trying to add partners.
Placement services paid for by the consumer, on the other hand, can recommend any facility they see fit, as well as offer additional services. The National Association of Professional Geriatric Care Managers certifies people who assess a senior's health and lifestyle needs, develop care plans and help find financing options, such as veterans' benefits. But a basic assessment can be $500 or more, and managers charge $100 to $200 an hour. Modigliani, the Massachusetts-based care manager, argues that direct payment by the client ensures that she is working only in the client's best interest. Geriatric-care managers don't just place people in homes, she says, but continue to work for them after placement, and they are in and out of the facilities they recommend on a regular basis.
9. Ratings? What ratings?
Good luck finding out whether or not assisted-living facilities provide good care. Only a handful of states post records online. And state inspections can be rare. California, for one, inspects every five years and doesn't put results online. Kyllo, of the National Center for Assisted Living, says consumers should ask an assisted-living facility for its record of fines and violations, which should be on file and available to view in person.
Nursing home ratings are transparent by comparison. There are uniform national rules, and there's plenty of centralized information that consumers can look at. The federal website Medicare.gov allows consumers to look at ratings and deficiencies at every facility in the country. Unfortunately, says Lee, even that system has flaws. The records that consumers see are not the violations that inspectors saw; often, they're less severe ones -- that have been reduced through a standardized dispute-resolution process.
10. We take Medicaid, but we'd rather not.
When a resident at a nursing home or assisted-living facility runs out of money, the government will sometimes pay for his or her care, through Medicaid. But the facilities receive far less compensation per patient from Medicaid than from those paying privately. In fact, says the American Health Care Association, the homes usually lose money, or just break even, on Medicaid residents.
But since about 19 percent of assisted-living residents and 70 percent of nursing home residents pay with Medicaid, facilities do whatever they can to maximize their revenue. For instance, says the National Senior Citizens Law Center's Carlson, though nursing homes are barred from making private payments an outright requirement, they screen applicants, looking for those that have the money to pay for a few months of care out-of-pocket before they transition to Medicaid. With assisted-living facilities, this can be an outright requirement -- as in Ohio, where facility residents are actually required to pay their own way for six months.
And that's not the only way homes try to increase private payments: Some facilities, primarily nonprofit ones, do not take Medicaid at all (an important distinction because once a nursing home is Medicaid-certified, it cannot refuse someone just because they are on Medicaid; however, an organization can decide that its facility will not enroll in Medicaid at all). Complicating matters, a few states allow nursing homes to set aside only a certain number of beds for residents on Medicaid. The problem with this structure, Carlson says, is that self-paying residents sometimes discover that when their funds run out, the facility suddenly has no more Medicaid beds available. "Providers have carte blanche to turn down people -- it is a huge problem," he says. Adds Nagaich, the elder law attorney: If a facility won't give you a written agreement that you can stay on Medicaid, don't move in.