What's Happening with Senior Housing?
UPDATED: Nov. 1, 2018
A story in the Wall Street Journal posted the day we posted our blog says that while investors and builders are betting on a need for senior housing, Boomers are not ready to buy. "The market has added 84,727 units since the end of 2012, up from 59,136 units during the six years before ... but recent demographic data suggests people tend to move into senior-living facilities after they reach 82 years old—the oldest boomer won’t turn 80 until 2026—many of these facilities have arrived ahead of their time."
The article goes on to suggest the Boomers enjoy their independence and some don't want to pay for senior housing (independent living and assisted-living facilities) which can cost from $3,000 - $8,000 a month. The article says occupancy levels for those facilities at the lowest since 2006.
A New York Time story says nursing homes around the country are closing.
A retirement housing expert say Boomers expect better housing choices
The times they are a-changing!
NURSING HOME POPULATION IS DOWN
A recent quarterly survey by the National Investment Center for Seniors and Housing shows one in five nursing homes beds are open, according to the NYT story. Demand is so low that some nursing homes have closed their doors – about 200 to 300 each year. The 31 largest metropolitan markets have 13,586 fewer nursing home beds compared to 2005.
Delaware had 42 nursing homes in 1995, 46 in 2014 and 45 in 2015. The number of beds was 4,739 in 1995 and was 4,791 in 2015.
There are several reasons for this change, according to the story:
Certain regulatory requirements which are expected to control costs, are affecting nursing home admissions.
- For example, if a hospital patient is kept under observation status rather than being admitted, Medicare will not cover follow-up care in a nursing home. As the use of observation status increases, the number of seniors who are released to nursing homes falls.
- Similarly, certain surgeries are now done on an outpatient basis and those patients do not qualify for nursing home care during recovery.
- Some Medicare Advantage plans cover shorter nursing home stays or direct patients to skilled care at home as follow up.
- Alternative types of care – liked assisted living or in-home care programs – are now covered by Medicare, so fewer people are admitted to nursing homes.
These changes create a good news/bad news situation for consumers. The good news is that they have more choices and some – in order to be competitive – some nursing homes are adding services like pharmacies or converting double rooms to private rooms. However, in many states the best nursing homes are now full and have wait lists. Additionally, as the number of patients declines, nursing homes will have to cut staff which may result in poor care.
As a consumer, if your loved one is in a nursing home, watch for signs of stress at the facility and be prepared to move. Among the signals: longer waits for assistance, fewer staff in general.
BOOMERS WANT BETTER
Many of the pressures nursing homes face are the result of consumer demand for more choices. Coverage for in-home care came out of a desire to age-in-place expressed for more seniors.
Boomers are also demanding more choices in their retirement communities because they are not retiring … they are reinventing themselves with second careers and a desire to be engaged. They want to experience new things.
So, retirement communities which are intergenerational and can cater to senior health needs with a doctor on call, for example, will appeal to the 65+ crowd according to experts.