What would happen if the federal government started to regulate the fees and services in California’s assisted living industry? It’s possible as Congress is “studying” the industry, gathering information from three of the largest assisted living providers in the United States to “evaluate resident safety, facility staffing and pricing.” One senator wants to call out the industry’s “exorbitant costs and insidious hidden fees.” Another senator believes there have been “serious health and safety problems in assisted living communities that have not been addressed yet.”
In response to these perceptions, Congress has created a website asking consumers to share their “bills and experiences” and to get public input into how and why the government should get involved. Will Congress study staffing challenges, rising operating costs, diminished reimbursements and recent assisted living bankruptcies, which hit a record high last year due to “cost inflation” or “reimbursements not in line with rising costs.”
Through CalAIM, ALWP and similar programs, California has been pushing assisted living facilities to act more like skilled nursing facilities and admit low-income and Medi-Cal residents, aging prisoners, the homeless and persons with mental disabilities, but with higher operating expenses and greater compliance oversight, can the industry afford it?
According to the 2020 Genworth Cost of Care Survey, the average cost of nursing home care was about $304 per day or well over $9,000 a month, but the average assisted living fee in California is $5,250 according to a recent Forbes study. If California and the U.S. continue to withhold adequate funding and reimbursement to nursing homes and then push assisted living facilities to accept nursing home-level residents, both ARF and RCFEs will be forced to admit post-surgical hip operations and abdominal surgeries. In addition, residents are likely to have various forms of cancers, traumatic brain injuries, strokes, wounds and AIDS.
The most recent statistics show a decline in California nursing homes from 1,230 in 2020 to 1,176 in 2023, attributed to overregulation, higher staffing requirements, and lower reimbursement rates. What about facility declines?