The Missing Link: Adding Assisted Living to Your Existing Services by Susan B. Brecht Assisted living communities represent the fastest growing segment of the senior housing industry Assisted living, as defined by the Assisted Living Federation of America (ALFA) "offers personalized assistance, supportive services and health care in a professionally managed group living environment. Residents receive individualized assistance that is available 24 hours a day, and is designed to meet their scheduled and unscheduled needs. The setting is home-like and residential. For those who cannot lie along, this combination of housing, health care services and assistance with activities of daily living (ADLs) expands their ability to live dignified, meaningful lives." As interest in the assisted living industry matures, a wide variety of organizations are entering the field. Unlike senior housing development in the 1970's and 1980's, assisted living growth is being fueled by the emergence of a growing number of publicly held companies that were formed expressly for the purpose of developing, owning and operating assisted living communities. At the same time, many health care providers including hospitals, nursing homes and home health care organizations are evaluating market entry. Like any other diversification strategy being considered by a health care organization, a thorough, and well organized planning process should precede physical development. Rather than being reactive, a health care provider should be examining assisted living within the context of its overall approach to broadening the continuum of care it offers to seniors. As managed care growth increasing embraces the senior market, assisted living is considered to be an important component in the provision of appropriate care in the least costly and institutionalized format. Health care providers who are engaged in strategic and long range planning can follow the guidelines presented in the following outline for evaluating the opportunity for entering the assisted living industry. I. Is Assisted Living Right for Your Organization?: Internal Assessment A. What is your mission and how does assisted living further it? 1. What is the organization's purpose 2. What business is/should the organization be in? 3. What is the nature of the organization? 4. What is the philosophy of the organization? 5. Does assisted living fit within the mission and how? B. What are your organization's strengths and weaknesses? 1. Reputation within the community 2. Perception of target market served 3. Market position/market share 4. Organizational structure 5. Human resources 6. Financial resources 7. Quality of care C. Who is your target market? 1. Geography 2. Age 3. Income 4. Care needs D. Will you expand existing facilities or seek a new site? 1. Existing land availability 2. Appropriateness of expansion on existing land 3. Availability of alternative sites 4. Relationship of location to positioning E. What resources will be required (financial, organizational, staffing)? 1. Availability and sources of equity 2. Availability and sources of debt 3. Specific skills required for development, marketing, operations 4. Using existing staff vs hiring staff, consultants 5. Timing II. Is Assisted Living Needed in the Market?: External Assessment A. Where is the best location for developing assisted living (on campus vs. new site) and what criteria should be used to evaluate this issue? 1. Availability and appropriateness of existing land on site/campus 2. Availability and appropriateness of alternative location(s) 3. Criteria for evaluation: a. Sufficient buildable land b. Compatibility of surrounding land uses/existing land uses c. Access to services/amenities d. Highway accessibility e. Access to adult children f. Image/perception of location B. How familiar is the market with assisted living and what factors influence decisions to move? 1. Availability of similar types of communities 2. Familiarity of referral sources 3. Availability/cost of home care 4. Family support systems 5. Willingness to spend 6. Perception of other care alternatives 7. Economic status and patterns relating to that C. What geographic area will be served and how, if at all, will it differ from your existing service area? 1. Differences between service areas for assisted living versus independent living, nursing, hospitals. 2. Influence of sponsor/owner 3. How location is perceived 4. Real and psychological boundaries 5. Relationship to surrounding and proximate communities (economics, access) 6. Availability of product in surrounding/proximate communities 7. Location of target market populations (elderly, adult children) D. What are the State regulations governing assisted living? 1. Have recent regulations been passed? 2. Is there more than one regulatory category? 3. What is the approval process; is a CON required? 4. What do the regulations say about design, services, staffing? E. What is the current competitive environment like? Who is providing assisted living and what models are in operation? 1. Sources of information for identifying competition 2. Criteria for establishing competitiveness 2. Information to be gathered 3. Survey methodology: telephone vs site visit 4. Models in operation: stand alone assisted living, personal care services in independent living, CCC's, assisted living/nursing 5. Plans for expansion 6. Plans for relicensing, if applicable F. What new competitive communities are being planned and when will they come on line? 1. Sources of information for identifying planned competition 2. Information to be gathered 3. Determining level of competitiveness G. What forms of indirect competition exist and how strong is it? 1. Independent living in congregate housing and CIRCS 2. Home health care 3. NARCS H. What are the demographic characteristics of the market area and what are the trends? 1. Using local rather than national statistics 2. Total population 3. Elderly population and households 4. Adult child households and income 5. Income 6. Household composition and tenure 7. Housing values and market conditions I. Is there sufficient market depth to support additional assisted living development? 1. Screening criteria for estimating market depth a. Age b. Income c. Frailty d. Household types 2. Factoring in competition J. Are there niches in the market that are not being served and is your organization prepared to serve them? 1. Economic target market niches 2. Memory impaired 3. Religious/fraternal 4. Frailty level K. What characteristics will make your project most successful? 1. Quality and philosophy of care 2. Relationship of price to value 3. Location 4. Design 5. Marketing 6. Positioning and competition L. What are the major success and risk factors, and how long will the project take to reach full occupancy? 1. Size of project 2. Competitive environment 3. Price creep 4. Absorption