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How to Become an Assisted Living Entrepreneur
Why an assisted living facility is a timely business
Assisted living facilities, a healthy, safe and independent lifestyle for its residents, provide a combination of housing, personalized support services, transportation, meals, housekeeping, 24-hour supervision and health care designed to meet the needs of people who need help with activities of daily living. In the current economic crisis, healthcare businesses have emerged as one of the top reliable business opportunities worldwide. Consequently, owning an assisted living facility is a good practical business opportunity as well as an opportunity to help others in need. This article will discuss why it is a timely and cost-effective venture, the population it serves, funding sources for residents, owners, and types of assisted living.
A timely and financially beneficial business
Currently, more than one million Americans live in approximately 20,000 assisted living facilities. The Assisted Living Industry today, for the most part, serves the highest affluent 10% of the nation’s elderly population. This sector expanded rapidly from 1990 to 1997. The sector was then overbuilt in 2002 and again in 2005. In 2007 the sector began to expand again and in 2008 the sector was expanded by individual entrepreneurs with smaller facilities located in the area 15-50 units. Niche facilities continue to thrive and expand. Another need that makes an assisted living facility a timely and beneficial venture is the aging Baby Boomer population. The average Baby Boomer is 65 today. According to the United States Census Bureau report,We the People: Aging in United States – Census 2000 special report prepared by
Yvonne J. Gist and Lisa I. Hetzel, “In 2000, the population aged 65 and over comprised 35.0 million people. Of this group, 18.5 million people, or 53 percent, were aged 65 to 74; 12.3 million, or 35 percent, were ages 75 to 84, and 4.2 million, or 12 percent, were age 85 or older.Women outnumbered men in this group: 20.6 million women compared to 14, 4 million men. The 65 to 74 and 85 and over age groups had nearly 2 million more women each than men, and the 75 to 84 age group had nearly 3 million more.”
Additionally, according to the United States Census Bureau, the total population of people age 65 and older in 2007 made up 12.6% of the total US population. With Florida, West Virginia and Pennsylvania making up the top three states where these residents reside. Baby Boomers, who will not fully impact the assisted living market until 2010, are beginning to enter the assisted living market. The senior citizen market has expanded beyond any previous experience in American or world history due to the Baby Boomer phenomena. These individuals, an unprecedented multiple of whom will now become seniors, and due to the efforts of the modern medical community and our population in general living healthier lifestyles, a senior market is developing that we have not prepared for or anticipated. Therefore, it is a beneficial business opportunity to own an assisted living facility due to the statistics of a growing elderly population, advances in medical technology that have led to people living longer, and federal and state governments looking to reduce costs by using assisted living facilities. assisted living and adult day care centers as a continuum of care for the elderly.
The Population an Assisted Living Facility Serves
The typical assisted living resident may be young or old, affluent or low-income, frail or disabled. A typical resident is a woman in her eighties who is either widowed or single. Residents may suffer from Alzheimer’s disease or other memory disorders. Residents may also need help with incontinence or mobility. Assisted living homes are not for people who need ongoing professional nursing care. As we look ahead to prepare for Baby Boomers, some industry experts agree it’s hard to predict what this new age group will look like, while others advise providers to prepare for an onslaught of demands for convenience, luxury and location. . This current group will have significant spending discretion. They have more money to spend on travel, cars, gadgets and toys than anyone else. Also, the long-term care industry will have residents who have served as presidents, CEOs, CFOs and vice presidents of large companies, extensive computer knowledge, financial independence, which will lead to higher acuity of care. Service development, innovative facility design, product design, personalized social and memory care activities and highly functional care facilities will be things to consider regardless of the size of your facility.
These facilities will provide services that include meals, housekeeping, transportation, health promotion and exercise programs, personal laundry services, social and recreational activities, on-site lounge, memory care, or dementia services. In addition, these facilities may provide access to health and medical services such as emergency call systems, bathing, dressing, medication management, and necessary assistance with eating, walking, and toileting. Some of these services are usually not paid for by health insurance or the Medicare or Medicaid programs. Not all facility residents require significant care or assistance. Many are there because they want a simpler lifestyle without the stress of maintaining a home and seek the company of other people their own age. They may also need a little help, such as taking medication or they want a safe environment or they may need some supervision
COST AND FUNDING
Resident funding: Costs will vary depending on the level of care and services provided. Assisted living care may be paid for by a long-term care insurance policy, but most people pay the cost themselves, which is referred to as the term, private pay. There is still more conjecture than known fact about where the money to pay for assisted living comes from. A recent study conducted by the National Center for Investment in the Housing and Senior Care Industries reports that more than one-third of residents receive some outside assistance, in the form of Supplemental Security Income (8.9%), Medicaid coverage (7, 2%), payments from private insurance (3.2%), government assistance (2.8%), Veterans Administration Supplements (.5%), or payments from Social Security, Medicare, POW benefits, workers’ compensation, government assistance, pensions and army. Meanwhile, federal, county and state aid programs are shifting more Medicaid funds from home health and skilled nursing to assisted living. Further, the research shows that residents who receive financial assistance have longer stays than residents who pay privately, and that residents who receive government assistance stay the longest, an average of 4.13 years.
Business financing: There are a variety of funds available for people starting an assisted living facility.
1. HUD (Housing and Urban Development)
2. USDA (United States Department of Agriculture) for facilities in rural areas.
3. SBA (United States Small Business Administration)
4. OWBO (The Office of Women’s Business Ownership)
5. Non-Profit Organizations such as The Robert Wood Johnson Foundation
6. Community Block Grants
7. Private Investors
Facilities vary in size and nomenclature
While assisted living is the most common term used in the country by both industry and government regulatory agencies, assisted living settings may be known by different names, including but not limited to residential care, personal care, adult care, residential schools, congregate adult living, community-based retirement facilities, retirement homes and residential care. The difference in licensing is usually based on the size of the facility or the services they offer.
The residence or housing and care is usually a converted house or a small facility with six to ten beds where the carer is a home owner or lone owner with little or no support staff. These facilities are usually not allowed to provide much care beyond bathing, dressing, providing meals, or helping residents get around. Some of these homes, however, may contract with home health services, home visiting physicians, or nurse practitioners to provide care to their residents.
Newer facilities are more like apartment buildings with private rooms or suites with locked doors. Instead of a nurse’s desk, there is a help desk. And instead of a hospital-like living room and a sterile cafeteria, assisted living has gathering spaces with couches, fireplaces, gardens, patios, and more. Central dining rooms are more like banquet rooms and often offer entertainment during or after meals. Meaningful activities and conversations with neighbors in a pleasant environment keep residents active and excited.
More and more assisted living facilities are specializing in the care of Alzheimer’s patients or people with memory care problems. An Alzheimer’s patient usually doesn’t need a lot of medical attention, but often requires supervision, confinement, fairly quiet surroundings, gardens with paths, and locked entry doors to prevent residents from wandering off.
In conclusion, the assisted living business continues to grow and expand services to a growing population, which in turn lends itself to a vertical market with positive potential and growth for a business venture.
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