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Tools For Assessing Continuing Care Retirement Communities

During a recent presentation to a group of independent seniors, a gentleman asked me if there were any rating systems available for Continuing Care Retirement Communities. Here are the some resources that I find helpful:

If you are looking into the financial strength of a Continuing Care Retirement Community (CCRC), the Fitch Ratings are helpful. Lest this recommendation sound too “money oriented” to some readers, here I note that it is only natural – and prudent – to want a senior living option where the community has both the resources and the stability to ensure a high quality of service to its clients, and for years to come. Fitch Ratings were founded over 100 years ago by the Fitch Publishing Company, a provider of financial statistics. The ratings are comprised of credit rating scales that give a snapshot of the organization’s potential to honor its financial obligations. This could include repayment of principal, interest, dividends or insurance claims.

Basically, Fitch Ratings are credit rating scales that indicate an organization’s potential for honoring its financial obligations to its investors. (In one sense, seniors “invest” when they select a CCRC). Grades ranging from ‘AAA’ to ‘BBB’ (described as investment grades) are assigned to those operations that fall into the low to moderate risk category. Grades of ‘BB’ to ‘D’ are assigned to operations with “speculative grade” or a greater level of credit risk. Some operations carry a grade of “NR,” which indicates they have not been rated by Fitch.

The second tool that I find helpful with assessing Continuing Care Retirement Communities is the CARF-CCAC accreditation. CARF stands for Commission on Accreditation of Rehabilitation Facilities. CCAC stands Continuing Care Accreditation Commission. CARF has been in business since 1966, and is an independent, not-for-profit accreditor of health and human services. They have surveyed thousands of organizations and set rigorous standards. They accredit operations including aging services, behavioral health, medical rehabilitation and much more in more than five countries.

I like to compare the attainment of the CARF designation as receiving the Good Housekeeping Seal of Approval for CCRCs. (Although the Commission does accredit other types of organizations, as I mentioned above). During the accreditation process, an organization voluntarily subjects itself to an onsite survey from CARF surveyors, which includes the application of standards of service and business practices. By submitting to the accreditation process, the organization is professing its commitment to achieving improvement and excellence in the business. The process of accreditation is extremely expensive. CARF also has a Financial Advisory Panel that provides two publications. The first addresses Financial Ratios and Trends of CARF-CCAC approved organizations. The second is The Consumer Guide to Understanding Financial Performance and Reporting in CCRCs.

I also explained to this gentleman at my presentation that the best tool to judge the fit between a CCRC and a potential resident is to take a trial stay for at least one month. One or two days is not enough time to make a decision. A senior will need to have an opportunity to meet other residents and truthfully decide if these are the folks with whom he or she wants to spend the rest of one’s life. A senior may be eating one to three meals at a community. During a trial stay, he or she will have opportunities to eat the everyday food, and not the fare provided at a special event. Last, the senior will also know whether the activities and atmosphere of the CCRC fit his/her personality.

For all your senior living needs, please contact Andrea Donovan Senior Living Advisors.