Small Assisted Living Businesses Under Siege
Two years ago Georgia passed a bill creating a new licensure level for the assisted living business–the Assisted Living Community (ALC). This new level is intended for larger facilities with more than 25 beds, who are required to meet fairly stringent fire and building codes.
In total, Georgia has about 2,200 licensed personal care homes (PCH) of sizes ranging from 2 beds to more than 200 beds. There are only about 10 ALC’s to date in Georgia.
What is the difference between an ALC and a PCH?
Great question. The new law required that “meaningful distinctions” be defined. However, many of us in the industry are still challenging the State on their success in that endeavor.
Other than size and fire/building codes, what really are the meaningful distinctions?
Ease of Aging in Place is the main difference. This has always been an important principle in assisted living. No one wants to move Mom more than necessary. ALC’s are permitted to retain non-ambulatory residents without special permission from the state. PCH’s are also permitted; however must obtain a State-granted waiver for each resident who can no longer self-propel a wheelchair to safety. Clearly the State is making it easier for ALC’s to age in place than PCH’s, and this is generally going to drive customers away from PCH’s.
What does the market want?
Small home owners say 80% of their customers move to the PCH from the bigger places, citing inadequacy of care as the number one reason. This may be because staffing ratios in the smaller homes are generally much lower (better) and because the owner-operator concept drives greater accountability for resident care outcomes. The new law and regulations are clearly not in line with what the market is asking for.
Why make laws and regulations that squeeze the smaller homes out of business?
Small care home business owners know we have many enemies. The State regulators find it costly to regulate, survey, and monitor small homes and would prefer to focus their monitoring efforts on larger, more visible facilities. The large facilities resent that we are keeping prices down. The nursing homes want our most fragile residents as their own customers.
Small care homes are under siege.
In another 1-2 years we are predicting a 70% drop in the number of licensees under 8 beds, currently about 1500 licensees, meaning less choice for the consumer and more businesses going under.
Here’s what you can do.
Speak up, write your congressman, and let the Department of Community Health know that you support these small businesses, and that you want your loved ones to have a choice in the size and type of assisted living or personal care home they may someday need.
Don’t let big business get away with using the legislature to gain a competetive edge!