Improving health-related quality of life for people living with disabilities and chronic conditions is the goal of a new center that will train scientists to address access and quality inequities in rehabilitation and long-term services and supports.

The American Health Care Association/National Center for Assisted Living is part of the effort. 

The Learning Health systems training to improve Disability and chronic condition care (LeaHD) center at Brown University is being launched with a five-year, $5 million grant from the Department of Health and Human Services’ Agency for Healthcare Research and Quality as well as the Patient-Centered Outcomes Research Institute, an independent, nonprofit research organization based in Washington, DC. 

With chronic conditions affecting more than half of US adults, Linda Resnik, PT, PhD, FAPTA, principal investigators said, efforts to address inequities have never been more important.

“A learning health systems approach offers potential solutions by embedding knowledge and best practices into care delivery, thereby supporting improvement, innovation and equity,” Resnik said in a release.

The goal of learning health systems is for patients to receive higher-quality, safer and more efficient care, and for healthcare delivery organizations to become better places to work. The model engages institutional and clinical practice partners in the generation, adoption and application of evidence-based research. 

The effort is a collaboration with the Brown University School of Public Health, the University of Pittsburgh and Boston University, along with nine health system and health organization partners, including AHCA/NCAL. Together the collaborative will identify and develop questions focused on rehabilitation and LTSS for persons with disabilities and chronic conditions.

Research priorities for AHCA/NCAL include evidence-based clinical and functional care approaches for long COVID, efficiency in functional change outcomes and workforce issues affecting care and service delivery in assisted living communities and nursing homes. 

“We’re a proud partner of the LeaHD Center and pleased to hear about this multi-year grant to further improve training and research for rehabilitation and long-term care services,” an AHCA/NCAL spokeswoman told McKnight’s Senior Living. “We look forward to working with the center in future research projects related to disability and chronic condition care to best assist in achieving our mutual mission.”

The LeaHD center is expected to prepare clinician and research scientists for independent research careers in patient-centered outcomes research, or PCOR, and clinical effectiveness research, or CER. 

CER compares the effectiveness of two or more interventions or healthcare approaches. PCOR compares two or more medical treatments, services or health practices and addresses questions and outcomes important to patients and other healthcare stakeholders. 

Senior living operators will continue to face inflationary pressures and capital market challenges in 2024, but some effects may lessen before the year is out, according to industry experts. Expect the workforce-related issues that have dogged providers for years to persist, however, they said.

“The elevated interest rates driven by the Federal Reserve efforts to bring down inflationary pressures had a profound impact on the sector in 2023,” National Investment Center for Seniors Housing & Care President and CEO Ray Braun told McKnight’s Senior Living.

Noting the “significant demographic wave on the horizon,” he said that the past year also saw record absorption of new senior housing inventory as it hit the market. “At the same time, we experienced a marked decline in new construction as well as transaction activity in 2023,” Braun said. “The lending environment and overall cost of capital has been prohibitive and has been a definite headwind.”

Capital still will be constrained early this year, he said, “but we are also hopeful that as the year progresses, we will start to see some improvement on this front.”

National Center for Assisted Living Executive Director LaShuan Bethea singled out inflation as the top issue faced by the industry over the past year.

“Inflation has caused soaring labor costs, in addition to other expenses, and made it difficult for assisted living providers to compete for caregivers,” she told McKnight’s Senior Living. “As a result, assisted living communities have been forced to use more contract nurses and staffing agencies, many of which are charging two or three times more than they charged prior to the pandemic.”

As 2024 dawns, Bethea said, the financial challenges will continue.

“Inflation makes all other expenses in assisted living more expensive, from food to cleaning supplies,” she said. “Additionally, the entire industry is still facing the ongoing ripple effects of skyrocketing costs from the pandemic.”

Assisted living providers, Bethea said, managed their COVID-19 response with little support from the government. According to some estimates, assisted living communities collectively received approximately $1 billion in relief funds, compared with the $12.5 billion received by nursing homes, despite the fact that assisted living providers serve about the same number of older adults and incurred more than $30 billion in pandemic losses and expenses.

“Federal and state policymakers provided little support to these communities in terms of personal protective equipment, testing and staff support,” she said. “Those COVID-related expenses continue today.”

Senior living providers, American Seniors Housing Association President and CEO David Schless said, continue to be confronted by “inflationary pressures across several key expense categories and a significant and rapid increase in interest rates.”

“Ultimately, the top challenge in 2023 was related to the capital markets and liquidity challenges,” he told McKnight’s Senior Living, adding that he expected those issues to continue this year.

“While inflationary pressures appear to be moderating somewhat, the interest rate environment and overall capital market environment for all real estate-based assets will likely remain challenging,” Schless said. “And we know there are many owners facing debt maturities in the upcoming year, which may prove to be extremely challenging with an ongoing liquidity crisis.”

NIC believes that the industry will reach an inflection point this year and that a “reset” will occur, Braun said.

“There will be some distressed inventory and underwater loans that the market is going to have to work through,” Braun said. “We think this reset is going to force a narrowing of the bid-ask spread and some reconciliation around equity contributions to stabilize outstanding debt.”

A ‘patchwork’ system

From a broader perspective, LeadingAge President and CEO Katie Smith Sloan told McKnight’s Senior Living, operators are challenged by “the shortcomings of our current patchwork system of delivering and financing long-term care.”

The association for nonprofit providers across the continuum of aging services is “doing all we can to raise up and urge policymakers and other stakeholders” to address the issue, she said.

“America is experiencing a massive demographic shift with implications for every aspect of society,” Sloan said. “Accessing quality long-term care is very often challenging, for many reasons. There is little political will to address these issues systemically, but policymakers are quick to criticize. Too often, aging services and providers are the scapegoat.”

Policymakers and members of the public must be educated about the industry as a whole as well as the differences between provider types, Sloan said.

“Ensuring that the public understands how long-term care is delivered and paid for — in a patchwork, inefficient system — and that the public appreciates the support that is needed, is critical,” she said. “And then advocating for long overdue change. We’re committed to doing everything we can to achieve that goal.”

Issues related to access and affordability also are on NIC’s radar screen, said Braun, who called them “an ongoing challenge for the sector.”

“NIC has been committed to defining and finding solutions for the middle-market consumer segment, and this work is more important than ever,” he said. “We need to be creative in finding solutions and models that are scalable and will bring forth greater access and options for the wave of baby boomers ahead.”

NIC funded a 2019 study by NORC at the University of Chicago that found that 54% of the 14.4 million middle-income older adults in 2029 in the United States will lack the financial resources to pay for senior housing and care, and a combination of public and private efforts will be needed to address the looming crisis.

More recently, Braun noted, NIC provided funding for the Housing for America’s Older Adults 2023 report, prepared by the Joint Center for Housing Studies of Harvard University. According to findings shared in that report, only 13% of adults aged 75 or more years who are living alone across 97 US metro areas can afford to move into an assisted living community without starting to cash in their assets.

NIC also has partnered with CVS Health to support a soon-to-be released report from the Milken Institute, “Innovative Financing and Care Models to Scale Affordable Housing Solutions for Middle Income Older Adults,” Braun added.

Intertwined with staffing issues

Access and affordability issues are intertwined with senior living’s perennial challenges related to staffing, Braun indicated.

“​​Staffing-related expenses continue to pressure margins, and there is sensitivity to how much of this expense can be passed along to the consumer,” he said, noting that in the first quarter of 2023, the percentage of assisted living rent increases surpassed the percentage of wage escalation.

“We went several years where wage increases consistently exceeded rent increases,” Braun said. “This is an ongoing challenge for operators, who need to ‘read the tea leaves’ and determine how far they can go in rent increases to cover some of these expenses without pricing themselves out of the market.”

Sloan cited labor issues — specifically, recruiting and retaining workers — as the top challenge that has faced senior living owners and operators over the past year. And those issues affect access, she said.

“These challenges are particularly acute in senior living communities that provide skilled nursing and home healthcare,” such as continuing care retirement / life plan communities or assisted living communities where home- and community-based services are provided, she said. “Insufficient reimbursement rates, coupled with a highly competitive labor market, make for a very tough operating environment. Members are having to make hard choices — which service lines to continue, what to reduce — in order to maintain operations. That prospect of limiting older adults and families’ access to much-needed care is really antithetical to our members’ mission. Yet without staff, there is no care.”

NCAL’s Bethea noted that assisted living providers and those they could serve are feeling the pain as well.

“While the assisted living workforce has recovered in many areas, workforce shortages still remain a top challenge, especially in rural areas,” she said. “ Rural areas do not have as many people in general, let alone the qualified caregivers needed to support the communities’ seniors. As a result, assisted living providers are having to compete with other healthcare sectors for new hires or make the tough decision to limit admissions.”

Limiting move-ins, Bethea said, “leaves vulnerable residents displaced from their long-standing communities, as well as reduces their options for quality care. …Families are left scrambling to find new care options and often must travel farther to visit their loved one.”

NCAL, she added, is working with its state affiliates and individual providers to try to find solutions to address workforce challenges so that older adults’ access to assisted living is protected.

Mandate effects outside of nursing homes

Both Sloan and Bethea cited the federal government’s proposed minimum staffing mandate for nursing homes as a potential challenge for other types of providers along the long-term care continuum.

“There’s a bit of irony here. I’ve spent my career in this sector and finally — a true first in a long time — the federal government is focused on aging services and older adults’ access to quality care,” Sloan said. “But the Biden administration is not making the right choices.”

At LeadingAge’s annual meeting in November, Sloan said that even though the staffing mandate proposed by the Centers for Medicare & Medicaid Services directly would apply only to nursing homes, senior living and other providers would be affected because they are “fishing from the same pool” of workers and “there are just not enough people to hire.”

In December, she told McKnight’s Senior Living that “decisions are being made that will have far-reaching impact and potentially negative unintended consequences.”

Bethea predicted that the proposed mandate will be senior living’s top challenge this year.

“With the impending Biden administration’s staffing mandate for nursing homes, assisted living communities are at risk of losing staff,” she said. “No matter where an assisted living community sits on this continuum, a federal minimum staffing mandate threatens to take away the essential staff on which these communities depend to provide high-quality care for millions of residents.”

And because labor shortages can lead operators to curtail admissions, Bethea said, another top challenge for the industry will be to rebuild the capacity to accept new residents.

“As [the] workforce slowly recovers, assisted living providers must do everything they can to effectively communicate that they are willing and able to accept new residents,” she said. 

ASHA continues to pursue a variety of legislative solutions to workforce challenges, including immigration reform, Schless said. “Of course, the politics of immigration reform are extremely challenging,” he added, noting that, with 2024 being an election year, “getting any significant legislation enacted is unlikely,” although “ASHA will continue to look for any opportunities that may add new foreign workers to the workforce.”

Although the situation has improved from the previous two to three years, Braun said, labor issues continue to be a “pressure point” for operators.

“We have seen year-over-year wage increases come down from record highs, and a number of operators are reporting reduced agency dependency, but the challenges have not gone away,” he said.

Operators, Braun said, “need to be better about reducing turnover and ultimately improving the experience of our workforce, which in the end will pay dividends.”

Workforce issues also are a primary concern for affordable senior housing providers, Sloan said.

“Congressionally appropriated funds are critical to both meet rising demand for homes and support the programs for service coordinators, whose work helps residents to age in place,” she said. “Research — and the experience of our nonprofit members who provide federally assisted homes to seniors with low-incomes — show that residents are better able to age in community with improved health and overall well-being thanks to service coordinators’ work, yet for the past  decade, these programs hadn’t received support, until only recently.”

In December, the US Department of Housing and Urban Development released $40 million in new funding for service coordination programs in affordable senior housing. LeadingAge said it was the first service coordinator funding opportunity in 10 years.

A 2015 study by LeadingAge and the Lewin Group found that the availability of an on-site service coordinator, such as a social worker, at federally subsidized seniors housing reduced hospital admissions among residents by 18%. More recent studies found that service coordinators improved affordable senior housing resident resilience during the COVID-19 pandemic.

But “even with recent support, there are still significant unmet needs,” Sloan said.

Looking to the future

Looking toward the future, Braun said that the industry is “going to have to refine the owner-operator relationship in some cases.”

“We remain a fragmented space with many different owners and operators, and those relationships can be complicated depending on experience in the sector and generally a limited set of industry standards for measuring and defining quality,” he continued. “NIC is working with some others on this very topic. We think it will be critical to advance the sector in this regard as we prepare for the wave of new development that will come once the capital starts to free up.”

Look for the topics to be covered in educational sessions, forums and networking opportunities at the 2024 NIC Spring Conference, Braun said.

Meanwhile, Sloan said that LeadingAge members “are laser-focused on reimagining themselves for the future.”

“We know that the majority of Americans want to age in community, in their homes. That’s an opportunity for providers across the spectrum,” she said. “The big question for our members is determining the path that is consistent with their mission and sets them up to be successful well into the future. It’s really about making the smart and strategic choices and executing on them while at the same time navigating workforce shortages and other pressing issues.”

To educate potential residents and their families about senior living options, Schless said, ASHA will be re-launching a “completely overhauled” version of its consumer website, Where You Live Matters, this year.

Bethea said that quality will remain a top focus for NCAL and its members in 2024.

“Assisted living continues to deliver high-quality care in a safe, homelike setting that offers the ability to meet residents’ needs,” she added. “The only thing the current labor shortage has impacted is access to care, not quality. The caregivers in our assisted living communities are dedicated individuals who are committed to continuous quality improvement.”

Assisted living operators that provide home- and community-based services to residents who are Medicaid beneficiaries could be affected as states continue to come into compliance with the provisions of the HCBS settings final rule, suggests the results of a KFF survey of state Medicaid HCBS programs.

One expert said that even providers that don’t provide HCBS would benefit from becoming familiar with its provisions.

The HCBS settings final rule in part is meant to protect beneficiaries’ autonomy in making choices and controlling decisions that affect their lives. Senior living industry advocates, however, had warned that the regulation could lead assisted living communities to stop accepting Medicaid as a payment source, causing some residents to need to move to nursing homes or other settings.

In 2023, 47 states provided HCBS through a combination of 1915(c) waivers — used by assisted living operators to provide such services — and 1115 waivers. Currently, 18% of assisted living residents rely on Medicaid to pay for daily services, and 61% of all assisted living communities are Medicaid-certified, according to the National Center for Assisted Living.

In their analysis, the KFF researchers included challenges for states and anticipated effects on those served, and they referenced a white paper released by LeadingAge that was issued this summer and recommended a two-year enforcement moratorium on the rule.

Alice Burns, associate director of the KFF Program on Medicaid and the Uninsured, told McKnight’s Senior Living that the assisted living communities that would be helped the most by the KFF report are those located in states that have not finished implementing the Medicaid HCBS settings final rule.

But even settings that aren’t affected by the final rule might want to become familiar with its provisions, as they could be a preview of what might be coming with an update to Section 504 of the Rehabilitation Act, which Burns calls a “what to watch” rule.

That update could have implications for assisted living providers, she said, because it addresses discrimination and would apply to any provider that takes federal money. So even providers that aren’t paid through a Medicaid waiver could be affected if they provide home health or personal care services. 

The comment period on Section 504 is now closed, but Burns said that the Section 504 rule is so broad that it could affect most assisted living communities. 

“It’s one of those things that if facilities are already in compliance with the HCBS settings rule, the 504 rule probably is not going to add a whole lot more challenges,” Burns said. “But for those who don’t take money from a waiver, or they’re in a state that is not yet in compliance, this rehabilitation rule could be a bigger deal.”

Profile of LTSS users

Another KFF report Burns said would be of interest to both assisted living communities and nursing homes looked at the age distribution of people using long-term services and supports. According to KFF, 6 million people receive Medicaid LTSS.

People aged fewer than 65 years tend not to live in assisted living and are served in their homes or in the greater community. But for adults aged more than 65 years — the assisted living target population — healthcare care plays a much bigger role in long-term care needs fulfillment, Burns said. 

The researchers found that 56% of Medicaid LTSS users are aged fewer than 65 years and are using HCBS, whereas most older adults who use LTSS services are in institutional settings such as nursing homes. Most (62%) of Medicaid enrollees who use LTSS also are enrolled in the Medicare program or are dually eligible for both Medicare and Medicaid. The data, the authors concluded, suggest a consistent unmet need for services, contributing to the risk of unnecessary institutionalization for people with disabilities.

“It points to the fact that one of the barriers to moving more older people into HCBS is that it’s harder to have Medicaid coverage when you’re in assisted living,” Burns said. “You talk about demographics and this interesting age pattern emerges.”

Heightened state regulation, dementia care support, the rise of active adult communities and the increased provision of home- and community-based services to Medicaid beneficiaries are among the top trends that will shape the senior living industry in the coming year, according to a panel of industry experts.

Health Dimensions Group, a management and consulting firm serving senior living and care providers, hosted a panel discussion Tuesday ahead of the release of a white paper on the top trends in aging services for 2024.

State regulation ‘ramping up’

In many states, assisted living has shifted from an apartment setting offering meals and minor assistance into a comprehensive care environment, according to HDG CEO Erin Shvetzoff Hennessey. With the increasing service and care needs of residents, however, comes an increase in state regulations for providers.

“Regulation is ramping up,” Hennessey said, adding that one-third of the states updated their assisted living requirements between 2020 and 2022, and some states are looking at assisted living the way they look at skilled nursing facilities.

“This puts a lot of pressure on providers to continue the lifestyle our assisted living residents desire — that dignity and freedom; we have to balance that with our regulatory requirements,” she said.

Among the strategies Hennessey recommended for addressing residents’ increased needs and resulting regulation in assisted living? Be proactive and conduct third-party mock surveys, implement new technology to monitor and respond to clinical needs, and identify the health-related requirements of residents and staffing levels required to meet them. 

With the increasing number of people living with Alzheimer’s disease and related dementias, she added, some assisted living operators might consider specializing in providing memory care and services.

She suggested that providers evaluate the financial feasibility of using the Guiding an Improved Dementia Experience (GUIDE) Model initiated by the Center for Medicare & Medicaid Services to improve quality of life for residents living with dementia, reduce strain in their unpaid caregivers and enable individuals to remain in their senior living communities or homes.  

The rise of active adult

On the other end of the spectrum is the active adult category, which was defined by the National Investment Center for Seniors Housing & Care in 2022. The definition, Hennessey said, triggered a turning point for the rental property type, moving it from a trend to a sustainable product.

The active adult community type, she said, represents an opportunity for operators to extend stays in the continuum of care while meeting consumer demand for communities that support an active lifestyle. A surge of development of active adult communities, she said, has been created by those already immersed in the model, senior housing providers eager to offer housing options earlier in the continuum and housing owners not traditionally associated with senior living. Some operators are repurposing existing housing and independent living units into active adult communities, she said.

“Significant changes in the later average age of entry and subsequent shorter length of stay [on other parts of the continuum] is driving the move to active adult for senior living providers,” Hennessey said, adding that operators need to tailor active adult environments to younger, more active individuals looking for social and physical engagement in a maintenance-free setting with resort-style amenities.

“I think consumer demand, mixed with developer, owner and industry interest, will combine to see a lot of growth in this space in 2024,” she said.

Medicaid HCBS increasing

The movement from care in institutional settings to HCBS settings, including assisted living communities, has been a trend over the past 20 years that escalated with the COVID-19 pandemic, according to panelist John Capasso, HDG executive adviser of senior care.

Several factors have converged to lead to the increase in HCBS, including increased Medicaid funding, decreases in labor availability, changing consumer preferences and increased Medicare Advantage plan use. 

The American Rescue Plan Act of 2021 devoted $37 billion to states, which used the funding to transition care from institutions to the home. Many states also are implementing managed long-term services and supports, which aim to improve care coordination, enhance beneficiary choice and promote community integration through case management, personal care assistance and home health services. 

In response to the shifting funding to HCBS, Capasso said, long-term care providers must educate themselves on the national and state level changes to HCBS funding and conduct demand and feasibility studies to understand how that shift in funding will affect occupancy. He also suggested that providers partner with Medicaid managed care programs to provide services.

“Take stock of the services you can provide, and approach a Medicaid managed care organization to see if you can contract with them for those services,” Capasso said. 

HDG will release its white paper later this week.

He was one of the experts who during a webinar shared predictions of trends that will shape aging services providers in the coming year.

The decline in the number of long-term care deals is “most likely due to the Fed policy of having raised rates continuously since March of 2022 in an effort to curb inflation, though a slower recovery in occupancy, increased operating costs and challenging labor markets have added to seniors becoming a less desirable commodity,” Branin said.

Higher capitalization rates are partly to blame as well, he added.

“As capital becomes constrained, the potential to invest resources, whether they be financial or human, into turnarounds becomes limited,” Branin said.

It might be a good time to divest of assets that have been a drain on resources and have had a negative effect on a provider’s bottom line, according to Branin.

“Regional team alignment can provide growth opportunities as well as ensuring that you have the right person in the right seat,” he said.

Funds move away from nursing homes

Another trend affecting aging services providers is “the transformation of Medicaid funding for home- and community-based services,” HDG CEO and Principal Erin Shvetzoff Hennessey said. 

The shift of Medicaid funding from institutional settings such as nursing homes to HCBS settings such as the home and assisted living communities is not new, according to John Capasso, executive adviser of senior care at HDG. 

“I think it’s important to note that this has been a trend over the past 20 years or so … [and] has continued to escalate” since the pandemic, he said. Additionally, he said, there has been an increase in Medicaid funding directed toward HCBS.

“The convergence of factors resulting in increased home- and community-based services has … decreased the occupancies of nursing homes,” Capasso said. “There are a lot of factors that could contribute to declines in occupancy, but the transition to patients being cared for in their homes rather than in institutions is an important factor and related to this Medicaid funding that’s occurring.”

He also noted that many states used American Rescue Plan Act of 2021 funds to transition care from institutions such as nursing homes to HCBS settings.

Older adults, particularly the baby boomers — those born between 1946 and 1964 — prefer to age in place in their own homes until it is medically necessary to move to a care setting, Hennessey stated. They tend to wait until they have chronic health issues or difficulty with activities of daily living, she added.

“What we have seen from that is assisted living really shifting from a safe apartment with some meals and minor assistance to a really comprehensive care environment that’s taking care of the whole person,” Hennessey said.

Half of assisted living residents have three or more chronic conditions, and more than 40% have Alzheimer’s disease or dementia, she said.

‘We really recommend watching’ active adult

Hennessey noted that 2022 was a turning point for the relatively new active adult segment. That’s when the National Investment Center for Seniors Housing & Care developed a definition for the community type. And the trend is not going away, she said.

“This is an area that we really recommend watching in the year ahead. While we’re seeing increased acuity in other settings, this is really a place for younger seniors to age and enjoy life,” Hennessey said. “This is also a great option as you’re balancing out how to provide care with much less staffing. So this setting really lends itself to a younger, healthier group of seniors.”

Among other long-term care industry trends discussed by the panelists were the changing aging services employment landscape in light of CMS’ proposed minimum staffing rule for nursing homes, growth in Programs of All-Inclusive Care for the Elderly, skilled nursing facilities challenges and the evolution of hospitals’ post-acute strategies.

For more coverage of the webinar, see McKnight’s Senior Living and McKnight’s Long-Term Care News.

The majority of those funds are being used to help providers retain, recruit and train care workers as well as to provide bonuses and pay increases for such workers.

The provision for HCBS “has ended up being the most significant down payment on the efforts to our vision of quality home- and community-based care for all Americans,” White House American Rescue Coordinator Gene Sperling said Tuesday during a panel discussion.

Not everyone has the financial means to provide the best in HCBS for their loved ones, Health and Human Services Secretary Xavier Becerra noted.

“That’s what this American Rescue Plan initiative is all about. It is elevating those we care about most so they can spend their last years, or maybe it’s last decades, in comfort with those they love most at home or in a community-based setting,” he said. 

Regarding direct care workers, Becerra said, “We want you to make more money than the folks that are flipping burgers in that hamburger joint down the street. But we know that we have to do better, and that’s why it’s so important that we do the work together.”

At the state level, for example, according to the White House, Colorado is using ARP funds to substantially raise base wages for as many as 60,000 HCBS workers. The state not only raised wages for those workers; it also has provided grants to boost training.

And Maine’s government provided bonuses to more than 24,000 direct care workers in every county in the state, at $3,429 per worker.

North Carolina used 80% of its ARP funds to give raises to direct caregivers and to establish a Direct Care Jobs Innovation Fund to support initiatives that improve recruitment and retention among the direct care workforce.

The Centers for Medicare & Medicaid Services also released new guidance outlining how states can use worker registries for Medicaid-funded HCBS “to ensure beneficiaries have awareness of and access to qualified workers to deliver these critical services,” Vice President Kamala Harris said in a related press release.  

“The registry will help families locate that excellent caregiver without having to go through all the headaches and not know where to navigate,” Beccera said. “This registry will help so many people understand who is out there and qualify.”

Expanding access to home- and community-based services is the recommendation from a new report from the Schwartz Center for Economic Policy Analysis on unmet care needs among the nation’s older adults.

Using data from the 2020 Health and Retirement Study, the policy note released Tuesday reported that nearly 20% of adults 55 and older — some 20 million people — had difficulty with one or more activities of daily living (ADLs) or instrumental activities of daily living (IADLs). Roughly 8.3 million of those individuals do not receive the help they need. 

Only 23% of adults 55 and older who had difficulty with ADLs or IADLs receive care from a paid professional, including assisted living, home care or skilled nursing facility care. But the report noted that professional care is “prohibitively expensive” for many. The average cost of assisted living in 2016 ranged from about $3,600 to $6,800 monthly, depending on accommodations, while hourly rates of home-based care were roughly $20 per hour. 

The nation’s long-term care system, the report authors noted, puts these individuals at greater risk of injuries and harm.

“Seniors who do not get the care they need are more prone to accidents and have more negative health outcomes, such as more emergency department visits and increased risk of mortality,” the report read. “Research shows that unmet long-term care needs of older adults are associated with higher disability levels.”

Stuck in the middle

The report also found that access to care is not entirely based on wealth. Significant shares of people in all wealth quartiles don’t receive the care they need. Lower-income adults qualify for public assistance through Medicare, Medicaid or other insurance, while wealthier adults can afford professional care — including private pay assisted living, home care or skilled nursing facility care — through private funds. That leaves the middle class most unable to access care. 

Between 42% and 48% of people across all wealth quartiles do not receive any care despite having difficulties with ADLs or IADLs. The authors noted this lack of a wealth gradient was explained in part by different family structures and caregiving behavior across communities. 

Many lower- and middle-income families, for example, provide unpaid family care to older loved ones, while higher income households either pay for professional care, reduce their work hours or quit their jobs to care for older loved ones.

“The gaps in care across the wealth distribution underscore the necessity of universal care for all elderly people,” according to the authors. 

State variances complicate matters

The SCEPA report recommended expanding access to Community Medicaid to help older adults access the care they need while relieving the burden on unpaid family caregivers. Community Medicaid provides financial subsidies to Medicaid beneficiaries through two programs — home- and community-based services waivers, and Aged, Blind and Disabled Medicaid.

But the authors noted that access to these programs varies significantly across states. Even meeting eligibility requirements does not ensure access to Community Medicaid due to additional enrollment caps and years-long waiting lists in some states. Thirty-eight states have HCBS waiting lists, with a combined nearly 700,000 people waiting for services, according to a recent KFF analysis of state Medicaid HCBS programs. 

Expanding access and raising enrollment caps in all states, but especially in states with long waiting lists or low-income and asset-eligibility caps, can help remove the disproportionate burden from family caregivers to ensure access to care for everyone, the authors concluded.

Only 13% of adults aged 75 or more years who are living alone across 97 US metro areas can afford to move into an assisted living community without starting to cash in their assets, according to “Housing America’s Older Adults 2023,” a new report from the Harvard Joint Center for Housing Studies, released Thursday. The calculation considers costs for both long-term care services and supports and housing.

The report authors said that challenges associated with the cost of housing and LTSS will compound in the next decade as the population of adults aged more than 75 years increases exponentially. The cost of long-term care services averages more than $100 per day now, they said.

Citing data from the National Investment Center for Seniors Housing & Care, the JCHS paper stated that 762,000 assisted living units nationwide are home to approximately 623,000 older adults. The median annual cost of assisted living is $63,000, although regional variabilities can put costs anywhere between $43,000 and $98,000. NIC provided principal funding for the report.

Given that subsidies for housing and LTSS reach only a fraction of eligible households with very low incomes, some organizations have found ways to reduce assisted living costs, the authors said. The report pointed to some of those alternatives, including repurposing properties, using philanthropic resources, unbundling services to offer lower-cost options tailored to individuals needs, and partnering with third-party providers to offer transportation, wellness and other services.

Technology also is emerging in assisted living to provide access to healthcare through telehealth and medication reminders, as well as safety features such as those for falls detection and prevention.

During a virtual panel discussion on the report hosted by JCHS on Thursday, several housing and aging experts touched on the growing demand for alternative housing options that include healthcare to address the growing needs of an aging population.

Panelists pointed to the gap between assisted living and public support. The report analyzed households led by adults aged 75 or more years that were unlikely to receive public subsidies but also had insufficient incomes to afford assisted living. Those gap households, on average, could only afford 62% of assisted living costs.

“The combined cost of housing and daily care is beyond the means of most people, including middle-income individuals,” said Jennifer Molinsky, project director of the Harvard JCHS Housing an Aging Society Program.

Bob Kramer, NIC co-founder and current strategic adviser to the organization, said that the increasing population of middle-income older adults who don’t have the resources to afford housing and care options was unknown to many until the NIC-funded “Forgotten Middle” study was published in 2019 in partnership with NORC at the University of Chicago.

That study, published by Health Affairs, projected that 54% of the 14.4 million middle-income older adults in 2029 in the United States will lack the financial resources to pay for senior housing and care, and a combination of public and private efforts will be needed to address the looming crisis.

“The challenge is getting the long-term care services you need, together with safe and secure housing, is unaffordable to many — not just low-income individuals,” Kramer said, adding that the solution is to innovate and scale. “Options going forward cannot be pitted against each other. We need everything. We need more options for people to choose and afford where they want to live.”

Meghan Rose, LeadingAge California’s general counsel and chief government affairs officer, said that there is “no one solution to ending the housing crisis.” Older adults, she added, deserve options, whether that means aging in place or assisted living or another option. Among the options the panel mentioned were multigenerational housing and co-housing efforts that bring together various generations to act as a supportive community. 

Within senior living, Kramer said, some operators have moved to or are considering using a universal worker approach adopting technology and are encouraging residents to volunteer in various ways to help reduce the costs that communities need to charge. 

“The combination of housing and care is really expensive, and we need innovation and scale, and we need to collaborate on solutions,” he said. 

First published in 2014, the report has been updated several times. This year, JCHS committed to releasing a report every two years. The latest report, available online, also includes data and interactive maps.

As the state of New Hampshire embarks on a gap analysis of its home- and  community-based services system, one senior living organization leader is cautioning against a “Hunger Games” scenario that pits one setting over another.

The nonprofit Human Services Research Institute and the University of New Hampshire’s Center on Aging and Community Living are conducting an assessment and gap analysis of the state’s HCBS system, with a goal of providing recommendations for improvements that promote community integration, independence and a robust system of long-term services and supports for older adults and people living with disabilities. 

Through public forums, the organizations will look at the availability of HCBS services across the state, use rates for those services, HCBS provider capacity, nursing facility usage, and the experiences and preferences of those using HCBS services. 

Brendan Williams, president and CEO of the New Hampshire Health Care Association, said that the COVID-19 pandemic led to historic federal and state resources for Medicaid programs, including providing that care in assisted living communities through HCBS waivers. But assisted living’s role in the state’s “fragile long-term care system” must be recognized, he added.

“While the influx of funding for in-home care has been a positive, assisted living is a very rare Medicaid option, given low state payments,” Williams said. “If assisted living is to be a meaningful Medicaid option, as much attention must be paid to it as is being paid to in-home care.”

He added that although NHHCA supports HCBS, he’s wary of any “Hunger Games” scenario where any long-term care setting could be disadvantaged over another.

“We view the system as fragile and interdependent,” Williams said. 

New Hampshire passed a state budget in June that gave providers a 3% increase in Medicaid payments. It began in July, with additional raises coming in January. A portion of those increases were targeted at the Choices For Independence, or CFI, waiver program, which provides almost 3,800 individuals from the Granite State with help at home or in a small community setting, according to the New Hampshire Bulletin. 

Chris Kelliher, the administrator at the Villager Assisted Living Home in Goffstown, NH, said that assisted living operators are looking for an increase in CFI rates that comes closer to covering their costs. Those rates will be announced by the state in December and will go into effect in January.

The operator of the small assisted living community said all residents move into the community as paying with private funds, but once they run out of resources and turn to Medicaid or the CFI waiver, he accepts that payment, knowing he will lose approximately $500 every month per resident.

“It does put places in a precarious position,” he said, adding that he has an almost two-year waiting list. “It’s a big gamble that a lot of facilities take when they do CFI. A lot of facilities aren’t willing to gamble, because they’re gambling on their future.”

Assisted living operators, Kelliher said, aren’t asking for an “astronomical” rate increase, just something closer to the private-pay rates.

Using funding from the Centers for Medicare & Medicaid Services’ Money Follows the Person Demonstration Expansion award, the state plans to evaluate its long-term services and supports system, including the CFI waiver. A final report is expected in June.