Extra fees driving assisted living profits: NY Times (long-term, relative, respect)
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A good article from The NY Times - highlights the add on fees in assisted care that drive the costs up considerably for the residents, making assisted living the most lucrative part of long-term care business. It’s a very detailed article - with some of the fees charged ($93 for medications not on the facility’s formulary, $12 for BP check, $50 per injection - more for insulin, $315 for daily help with inhaler, etc.). Also discussion of fairly high profitability (24% for one of the firms), etc.
Being The NY Times, it might not be accessible to everyone but seems like a worthwhile article for those considering such facilities.
If you run a nursing home, and no insurance company is willing to insure it against potential litigation, how much of your earnings do you need to earmark for your potential legal costs, and how much does that raise the cost of nursing home for each senior residing there?
I can't read the article due to paywall, but every AL is different. It's incumbent upon the person researching the facilities to find out all potential add-on costs at the places they are currently looking at to determine the best choice. In my town, we looked for a place for MIL when her dementia advanced to the point she could no longer handle her own meds and couldn't be left home alone safely.
We found that one place was all-inclusive of these types of fees with no add-on charges at all. Another place had a menu of services available at itemized monthly fees for such things as medication management, assistance with bathing, etc. A third place had groupings, or packages of assistance with associated monthly costs, and a fourth place had an individually itemized cost per instance of assistance (like a charge for every BP check, each injection, etc). Oddly enough, the most reasonably priced place was the one most inclusive of all assistance, basically everyone paid the same regardless of individual needs. When selecting a place, one needs to remember that condition of the resident should be expected to decline over time, and the potential rise in costs associated with that decline need to be factored in when choosing a placement.
Good to point out that when looking for a home to be sure and ask about extra fees. It would be easy to miss this when you start looking at different homes.
A good article from The NY Times - highlights the add on fees in assisted care that drive the costs up considerably for the residents, making assisted living the most lucrative part of long-term care business. It’s a very detailed article - with some of the fees charged ($93 for medications not on the facility’s formulary, $12 for BP check, $50 per injection - more for insulin, $315 for daily help with inhaler, etc.). Also discussion of fairly high profitability (24% for one of the firms), etc.
Being The NY Times, it might not be accessible to everyone but seems like a worthwhile article for those considering such facilities.
This is not surprising. Assisted living facilities are designed only to assist with things like putting on clothes, going to the bathroom, etc. Medicines, BP checks, injections, insulin, etc,, are not included in assisted living fees. Unfortunately many seniors think they’re going to get more in an assisted living facility than they’re actually going to get. I really can’t see a huge advantage to these types of facilities than staying in one’s home and hiring help as needed.
Medication management is often included in AL fees, but it's important to verify that if you're looking at a facility. In our case, medication management was one of the main reasons for placing MIL in AL. She had early-stage dementia and didn't need help with anything other than med management, rides to stores and appointments, and supervision. The place we selected provided med management through the enforced use of a pharmacy that provided the meds in daily pill pack organizers for each patient. MIL's prescribed pills were provided to the resident nurse in a format where each day's pills were packaged in push through pill pack with the meds parceled out as morning, mid-day, evening, and bedtime. It's a great system and anyone can get their pills packaged this way if you're willing to pay the extra cost. It was just easy for the nurse to go to each resident's room and hand them their medication and wait while they took it. No more mix-ups, or over or under dosing.
The choice of "all inclusive" assisted living vs "a la carte" assisted living seems to be a reasonable market segmentation so that customers can gravitate to the one they prefer. That's the market in action, and I don't see a problem with that.
The real issue, of course, is some seniors haven't saved appropriately for assisted living, and some didn't save at all, just assuming someone else (relative? church? government?) would provide for them.
The author of the article decries the scenario where seniors have saved their whole lives and - gasp! - must spend there savings in their senior years in assisted living. I don't see that as being something worthy of pearl-clutching. That is a reasonable way to spend your money when you are elderly.
And there is the moral hazard, far too often, where seniors purposefully deplete their assets, staying within the letter of the regulations, in an attempt to have someone else pick up the tab for their elderly existence and final years.
The choice of "all inclusive" assisted living vs "a la carte" assisted living seems to be a reasonable market segmentation so that customers can gravitate to the one they prefer. That's the market in action, and I don't see a problem with that.
The real issue, of course, is some seniors haven't saved appropriately for assisted living, and some didn't save at all, just assuming someone else (relative? church? government?) would provide for them.
The author of the article decries the scenario where seniors have saved their whole lives and - gasp! - must spend there savings in their senior years in assisted living. I don't see that as being something worthy of pearl-clutching. That is a reasonable way to spend your money when you are elderly.
And there is the moral hazard, far too often, where seniors purposefully deplete their assets, staying within the letter of the regulations, in an attempt to have someone else pick up the tab for their elderly existence and final years.
Cost of assisted living for a fully or fairly functioning senior is appropriate with respect to services; it is just nursing homes (ie, total assistance with basic functions) that are grossly overpriced. In a different thread, I added up expenses of rent, food, and 4 hours per day of assistance with basic functions - it adds up to less than $5k per month. If the value of nursing home services adds up to $5k per month, why is the cost over $10k per month?
Cost of assisted living for a fully or fairly functioning senior is appropriate with respect to services; it is just nursing homes (ie, total assistance with basic functions) that are grossly overpriced. In a different thread, I added up expenses of rent, food, and 4 hours per day of assistance with basic functions - it adds up to less than $5k per month. If the value of nursing home services adds up to $5k per month, why is the cost over $10k per month?
The vast majority of nursing homes are ‘for profit’. As a ‘for profit’ enterprise, they’re going to charge what the market will bear.
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