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Are Skilled Nursing Homes Becoming A Dying Breed?

I recall having a conversation 5 or more years ago with a colleague who was an Admissions director of a highend assisted living community.   It was around the time when I observed assisted living communities were going beyond providing “stand-by” assistance with activities of daily living (ADLs = bathing, dressing, toileting, transferring, walking and eating) and providing “hands on” care to residents in need.  Hands on care typically had been handled at the intermediate nursing care level, when a resident needed 24-hour supervision and “hands on” care with ADLs.  My colleague looked across the desk at me and said, “Andrea, the days of skilled nursing as you and I know it are dead.”  I remember that my immediate, gut reaction was, “You are crazy. Nursing homes will never disappear.”

A recent article published in Crain’s Chicago Business (August 21, 2017), titled “Out with nursing homes, in with home health care,” showcased the fact that Northwestern-owned Lake Forest Hospital, located in the affluent suburb of Lake Forest, Illinois, has plans to replace its hospital but will not include plans for building a new long-term care unit.  The reasons cited were that the “Northwestern Medicine may have found the one market where investment in longterm care has not paid off.” A spokesperson from Northwestern’s partner law firm said that “Only the sickest patients end up in nursing homes.  People 65 and up tend to find home health care and assisted living more comfortable.”

Given such trends, nursing homes may start to diminish in a community as wealthy as Lake Forest.  But nursing homes will probably always exist in one form or another.  I have to admit that among the many senior housing placements that I have completed in the past few years, the number of assisted living placements is way up, and the number of nursing home placements has decreased.   I recently reviewed some pricing for assisted living in a northwest suburb that featured help with ostomy or catheter care (a service the assisted living communities wouldn’t touch a few years ago because it was considered a skilled nursing service), hands on service with ADLs, a 2 person assist in transferring, medication assistance including help related to diabetes, chemo or radiation therapy or dialysis, and assistance with a feeding tube.  The price for this kind of care in a studio assisted living apartment is under $6,500 a month.  That pricing is well under the price of nursing home care, which on the lowest end can start at $7,000-$8,000 per month in the Chicago metro area.  So why wouldn’t someone opt for assisted living in the comfort of a private apartment vs. a semi-private room in a nursing home setting?

Many people in the Lake Forest area are able to afford the cost of in home care, which costs about $24 an hour in the Chicago metro area.  Less affluent people may find that they have overspent on private duty care, after it is too late.  Then, they cannot enter a decent senior living community after their money has been spent.

So where is the senior living model headed?  The direction of private home care is speculation for another day.  I think that, because assisted living communities are absorbing many of the services performed by nursing homes, nursing home care and assisted living services will all be offered under one, large private pay umbrella.  A smaller number of nursing homes will still be available for the poor and those who have outlived their savings.  And what about funding for the latter?  The Medicaid system is already a mess…so that remains to be seen.

So what does this shift mean for you?  First, while nursing home care might be eclipsed by the advent of more advanced care options within the context of assisted living communities, the variety services you or your spouse might need one day will remain available.  ADSLA prides itself on staying informed about trends in senior living options in order that we might best serve our clients — for their needs now and in the months and years to come.






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