Major Business Challenges of Senior Care Assisted Living Organizations

The Major Business Challenges of Senior Care/ Assisted Living Organizations

As a result of demographic pressure,the care challengesfor seniors in the next 25 years in particular will be enormous. Apart from the huge numbers of people over 65 and living many more years, in the US, the number of Alzheimer’s patients as a proportion of this total is set to triple to over 15 million by 2050. And while the typical Alzheimerpatient is disabled for 9 to 20 years today, this will increase to 40- to 50 years as medical advances continue and life expectancy continues to grow. This means that the so-called “boomer” generation will be spending many more years responsible or caring for at least one aging parent and sometimes two. All this is good news for the senior care industry in theory (lots of growth) but this does not mean that there aren’t many challenges to deal with first including the following main ones:

The Right Real Estate
It may seem that a senior living facility (or multiple sites) can be run in almost any building that is large enough to cope with multiple residents. However, where you have a choice, the location of the assisted loving facility can make a huge difference to both levels of occupancy and profitably. And where there is no choice, the right internal design can make a significant difference to profitability also. Assisted living owners and leaders must therefore pay close attention to this and make the best possible choices to design facilities in the right way and keep them up to date.

Designing a service that can be sustainably profitable
Any assisted living businessis dealing with a population where over 80%, on average,require assistance with medications, over 60% with bathing, over 40% with dressing and over 25% with eating. Add to that the 50% who have some form of dementia and you have the potential to spend a lot of resources and money on staff to provide the necessary support. In addition, the risk of trips, falls, medication issues and contagious infections may significantly impact on revenues and whether a profit is made at all. Assisted living organizations therefore need to carefully think about their risks to the bottom line and make wise decisions about mitigation.

Choosing which services to provide
Assisted living is one of those terms that is a “catch-all” and can be everything from a little assistance for those seniors who are quite able to look after themselves (and may simply not be able to drive or see as well as they once did, for example) to those who need much support, especially medically (and everything between these two extremes). The challenges for elder care homes is to determine where they want to be on this continuum (and serving a limited part of it or many points along it) and then render the services necessary in an efficient and cost effective way for all of them. Get this wrong and profitability quickly disappears.

Getting the best possible staff and training them appropriately
Any experienced assisted living leader knows that getting good staff at all levels is a difficult challenge to overcome. For doctors and nurses the elder care sector is not necessarily the most rewarding of healthcare experiences (financially and in other ways) and for nursing assistants, aides and other staff the pay is often poor and the hours can be long and unsocial, in many cases. But given the volume of seniors coming into these facilities, good staff must be attracted and well trained to give the kind of services that are not only useful today but especially as technology continues to play its part, are useful for the fast changing future too.

Being efficient, effective and professional
Assisted-living facilities are not regulated by the federal government, and regulated by state government on only a limited basis. This often means that the level of services provided varies greatly from one organization to the next. The challenge then for those assisted living centers that want to be seen as best practice is to not only run the whole operation efficiently, effectively and professionally but to convey this professionalism to the residents and their relatives (often the sons and daughters that may be bearing some or all of the cost).

As the population of seniors overtakes the population of children in the US in 2020, the challenges related to how to best look after seniors, including how to best maintain their health, will be much debated. The residents, family members and industry leaders will need to think about not only the huge growth in volume of people needing assisted living, and for longer, but will also need to think carefully about how the services they offer can be designed to be optimal. RX4 has experienced all of these assisted living business challenges in many different healthcare environments and can provide considerable insight and options where the knowledge does not exist internally.

Dr Jon Warner

Dr. Jon Warner
CEO-RX4 Group-Taking Care of the Business of Healthcare

Jon is the CEO of RX4 Group based in Los Angeles, California. He can be reached at

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