<a href="https://alfforsale.com/the-blog-title-1/" rel="bookmark">Preparing for “The Move”</a>

There is no doubt that the senior housing market is encountering some changes. Despite these changes experts agree that market fundamentals remain strong. Population demographics including an age wave that is set to boom in the coming two decades, present an undeniable opportunity for growth.

Recently, the senior housing and care market is looking at historically low occupancy. The last two years were undoubtedly a time of challenge for senior housing owners and operators. Two main factors to this include, a decline in occupancy nationwide, and an ongoing staffing crisis for providers.

The upside to this is that investors, now have the ability to acquire these buildings, skilled nursing facilities, assisted living facilities and independent living facilities, at a relatively low price per bed.

During the three years leading up to the great recession the senior housing market was unprecedentedly strong. This was followed by a three-year lull including 2010, which produced the lowest value per unit despite it representing the year the market began to turn around. The market more than made up for this lag in 2011 when the average price per unit surged by 44{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}.

It took another three years where the average price stayed in a tight range before the next surge in pricing occurred jumping another 27{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}. The abundance of new developments that  broke ground in 2014 and 2015 opened their doors in or around 2017 driving a competitive scramble for more than just residents. Not only did this put pressure on unit pricing, it also effected the already scarce labor, resulting in higher labor costs and increased turnover.

Sources:
(2018). SENIORS HOUSING AND HEALTH CARE MERGERS & ACQUISITIONS IN THE 21ST CENTURY (4th ed.). Norwalk, CT: Eleanor B. Meredith.

<a href="https://alfforsale.com/the-blog-title-2/" rel="bookmark">Seniors Need Help</a>

Our senior population often relies on a caregiver to complete their daily tasks. There are two types of caregivers an informal caregiver and a formal caregiver. An informal caregiver is an unpaid individual involved in assisting others with activities of daily living or medical tasks. A formal caregiver is a paid care provider providing care in one’s home or in a care setting such as a daycare, residential facility, or long term care facility.

Approximately 43.5 million caregivers have provided unpaid care to an adult or child in the last 12 months, and about 34.2 million Americans have provided unpaid care to an adult age 50 or older in the last 12 months National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.] 15.7 million of those adult family caregivers care for someone who has Alzheimer’s disease or other dementia. The value of services provided by informal caregivers has steadily increased over the last decade, with an estimated economic value of $470 billion in 2013, up from $450 billion in 2009 and $375 billion in 2007.

Percentage of older people who needed help with personal care from other persons in the U.S. from 1997 to 2017

Caregiving tasks

  •  On average, caregivers spend:
    • 13 days each month on tasks such as shopping, food preparation, housekeeping, laundry, transportation, and giving medication;
    • 6 days per month on feeding, dressing, grooming, walking, bathing, and assistance toileting;
    • 13 hours per month researching care services or information on disease, coordinating physician visits or managing financial matters. [Gallup-Healthways. (2011). Gallup-Healthways Well-Being Index.]
  • Of family caregivers who provide complex chronic care:
    • 46{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} perform medical and nursing tasks;
    • More than 96{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} provide help with activities of daily living (ADLs) such as personal hygiene, dressing and undressing, getting in and out of bed, or instrumental activities of daily living (IADLs) such as taking prescribed medications, shopping for groceries, transportation, or using technology, or both. [AARP and United Health Hospital Fund. (2012). Home Alone: Family Caregivers Providing Complex Chronic Care.]
  • On average, caregivers perform 1.7 of 6 ADLs, most commonly getting in and out of beds and chairs (43{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}). [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • On average, caregivers perform 4.2 of 7 IADLs, most commonly transportation (78{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}), grocery or other shopping (76{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}), and housework (72{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}). [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  •  57{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of caregivers report that they do not have a choice about performing clinical tasks, and that this lack of choice is self-imposed.
    • 43{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} feel that these tasks are their personal responsibility because no one else can do it or because insurance will not pay for a professional caregiver.
    • 12{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} report that they are pressured to perform these tasks by the care receiver.
    • 8{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} report that they are pressured to perform these tasks by another family member. [AARP and United Health Hospital Fund. (2012). Home Alone: Family Caregivers Providing Complex Chronic Care.]
  • Caregivers report holding significant decision-making authority regarding the following:
    • Monitoring of the care recipient’s condition and adjusting care (66{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24});
    • Communicating with healthcare professionals on behalf of the care recipient (63{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24});
    • Acting as an advocate for the care recipient with care providers, community services, or government agencies (50{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}). [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]

Time Spent Caregiving

  • 4 in 10 (40{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}) caregivers are in high-burden situations, 18{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} medium burden, and 41{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} low burden based on the Level of Care Index (1997). Burden of care increases with hours of care provided. 92{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of providers providing 21 or more hours per week are high burden versus 16{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of lower hour providers. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Primary family caregivers of people with dementia report spending an average of 9 hours per day providing help to their relatives. [Fisher, G. G., Franks, M. M., Plassman, B. L., Brown, S. L., Potter, G. G., Llewellyn, D., et al. (2011). Caring for Individuals with Dementia and Cognitive Impairment, not Dementia: Findings from the Aging, Demographics, and Memory Study.]

Hours per Week

  • Family caregivers spend an average of 24.4 hours per week providing care. Nearly 1 in 4 caregivers spends 41 hours or more per week providing care. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Family caregivers who reside with those they provide care for spend 40.5 hours per week caring for this person.
    •  Those caring for a spouse/partner spend 44.6 hours per week performing
      caregiving tasks.
    • Those caring for a child under age 18 spend 29.7 hours per week performing caregiving tasks. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Older caregivers who are 75+ years old provide 34 hours in an average week on caregiving. Middle aged caregivers report spending 21.7 hours per week on caregiving tasks. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Family and other unpaid caregivers of people with Alzheimer’s disease and other dementias provide an estimated 21.9 hours of care per week. [Alzheimer’s Association. (2015). 2015 Alzheimer’s Disease Facts and Figures.]

Months and Years Providing Care

  • The average duration of a caregiver’s role is 4 years.
    • Only 30{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of caregivers provide care for less than a year.
    • 24{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of caregivers provide care for more than 5 years.
    • 15{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of caregivers provide care for 10 or more years. Higher-hour caregivers are twice as likely to have been in their caregiving role for 10 years or more. [National Alliance for Caregiving and AARP. (2015). Caregiving in the U.S.]
  • Regardless of employment status, unpaid caregivers report that positive activities in their respective daily lives are reduced by 27.2{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} as a result of their caregiving responsibilities. This effect is three times greater in their personal lives than in their professional lives. [Coughlin, J. (2010). Estimating the Impact of Caregiving and Employment on Well-Being: Outcomes & Insights in Health Management.]
  • Measured by duration of care, Alzheimer’s and dementia caregivers provide care on average 1-4 years more than caregivers caring for someone with an illness other than Alzheimer’s disease. They are also more likely to be providing care for five years or longer. [Alzheimer’s Association. (2015). 2015 Alzheimer’s Disease Facts and Figures.]

Family Caregiver Alliance National Center on Caregiving “ Caregiver Statistics: Demographics” https://www.caregiver.org/caregiver-statistics-demographics

<a href="https://alfforsale.com/the-blog-title-3/" rel="bookmark">Geriatric Health in the US – Stats and Facts</a>

Geriatric is another name used for our senior population, and in this case geriatrics refers to the health and care of our elderly.

Geriatrics focuses on providing the special health care needs of older adults and works to prevent and treat disease and disabilities among this population. The physician that specializes in the treatment of our elderly population is called a geriatrician. Geriatric care involves a wide spectrum of health care professionals including, but not limited to, nurses, social workers, physical therapists, nutritionists, and psychologists.

Our older generation is at greater risk of many diseases and disabilities. It is important for this population to avoid health risks that could increase their chances of these threats. However in 2017 roughly 9{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of adults 65 or older we’re still smoking cigarettes, and about 28{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of these older adults were obese in 2018 which is a 25{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} increase from 2013. (reference graph)

One of the most devastating diseases that are older population faces is inarguably Alzheimer’s disease. We estimate 13.8 million older adults will suffer from this disease by 2050.

As we age our healthcare needs increase, and the importance of health insurance and quality affordable healthcare treatments becomes clearer. According to research by 2025 it is forecasted that 7.5 million older adults will be enrolled in Medicaid, compared to the 6 million that are expected to be enrolled at the beginning of 2019. In 2017 Medicare beneficiaries aged
65 years and older were expected to pay an average of $3509 annually for inpatient hospital services. These costs rows significantly if the patient was diagnosed with Alzheimer’s disease or dementia.

* Information Published by John Elflein, Oct 2, 2018 : Geriatric health in the U.S. – Statistics & Facts

<a href="https://alfforsale.com/the-blog-title-4/" rel="bookmark">Changes in the Senior Housing Market</a>

There is no doubt that the senior housing market is encountering some changes. Despite these changes’ experts agree that market fundamentals remain strong. Population demographics including an age wave that is set to boom in the coming two decades, present an undeniable opportunity for growth.

Recently, the senior housing and care market is looking at historically low occupancy. The last two years were undoubtedly a time of challenge for senior housing owners and operators. Two main factors to this include, a decline in occupancy nationwide, and an ongoing staffing crisis for providers.

The upside to this is that investors, now have the ability to acquire these buildings, skilled nursing facilities, assisted living facilities and independent living facilities, at a relatively low price per bed.

During the three years leading up to the great recession the senior housing market was unprecedentedly strong. This was followed by a three-year lull including 2010, which produced the lowest value per unit despite it representing the year the market began to turn around. The market more than made up for this lag in 2011 when the average price per unit surged by 44{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}.

It took another three years where the average price stayed in a tight range before the next surge in pricing occurred jumping another 27{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24}. The abundance of new developments that broke ground in 2014 and 2015 opened their doors in or around 2017 driving a competitive scramble for more than just residents. Not only did this put pressure on unit pricing, it also effected the already scarce labor, resulting in higher labor costs and increased turnover.

Sources:
(2018). SENIORS HOUSING AND HEALTH CARE MERGERS & ACQUISITIONS IN THE 21ST CENTURY (4th ed.). Norwalk, CT: Eleanor B. Meredith.

<a href="https://alfforsale.com/welcoming-the-baby-boomers/" rel="bookmark">Welcoming the Baby Boomer’s</a>

Baby Boomers, the generation born between 1946 and 1964, defined America in the years after World War II. Coining the phrase “live fast and die young”, baby boomers were rebellious, individual and determined to show the world they were different from their parents. They single-handedly created the idea of the modern teenager and it was their way or the highway. Although many baby boomers certainly lived fast, not that many died young. In fact, after all the partying was over, millions of baby boomers embraced healthy lifestyles that partly drove the boom in personal fitness and health clubs across the United States.

From now until 2030, 10,000 Baby Boomers each day will hit retirement age. Millions will begin to officially retire, collect social security checks and go on Medicare. Other Boomers will keep on working either out of financial necessity or out of some less tangible need like identity and self-worth.

There are many differences in Baby Boomers and the world around them, but one thing is clear, this large generation will tax the health care system like never before. While their sheer number will play an important role in that, they will also have different views on what type of care is acceptable to them and for their needs.

For example, many Baby Boomers want to live at home or remain in a residential setting. They do not want to be in nursing homes like their parents. And, this will require more locations for independent and assisted living to become available. This generation is also living longer and, with that, comes the need for improved health care. They also need more long-term support after retirement. Many in this generation are happy to seek out more advanced and cutting-edge medical technology. Overall, Baby Boomers will help to modernize the healthcare industry through their growing needs.

As Baby Boomers begin to reach into their older years, it is time for them to find out what senior living options are available. The good news is there are many options to fill just about any need.

  • Senior living communities allow those over the age of 55 to buy their home or condo within a private, amenity-filled community.
  • Assisted living communities allow seniors to access some of the help they need as they get older while still allowing them to live on their own.
  • Nursing homes are another solution, ideally suited to those who need more help and ongoing medical care.
<a href="https://alfforsale.com/change-in-health-care/" rel="bookmark">A Change in Health Care</a>

There is no question that the healthcare market is changing. It is quite possible, however, that we will see a real revolution in health care in the next decade because it will be necessary to avoid the financial catastrophe that awaits us if things do not change. Medicare and Medicaid budgets are not sustainable, and the out of pocket expenses required from managed care plans are not affordable for the average American. As a result, healthcare companies of all accounts are trying to figure out how to position themselves for the coming payment squeeze.

Medicare and Medicaid

The first of the boomers — the population born between 1946 and 1964 — turned 65 in 2011, and the last will turn 65 in 2029. By 2030, boomers over 65 will make up 20 percent of the U.S. population, numbering around 60 million people, according to a report from the U.S Census Bureau.  As the baby boomer generation approaches retirement, thus qualifying for Medicare, healthcare spending by federal, state and local governments is projected to increase. Assuming the government continues to subsidize Marketplace premiums for lower-income populations, this increased government healthcare spending will greatly affect the entire healthcare system in the U.S. Although Medicaid spending growth decelerated in 2016 due to reduced enrollment, spending is expected to accelerate at an average rate of 7.1 percent per year in 2018 and 2019 due to the aging baby boomer generation.

Managed Care

In the managed care sector, that showed itself in the attempt by four of the largest health insurers to merge into two companies in 2015.  The combined dollar value was $91.2 billion. They were both challenged in the courts and both were terminated. By 2017 and 2018, a new mega-merger trend emerged, with CVS announcing a proposed acquisition of Aetna for $77.0 billion after Aetna’s attempt to buy Humana for $37.0 billion was terminated. Then it was Cigna’s turn, announcing its intent to purchase Express Scripts for $67.0 billion, after its purchase by Anthem for $54.2 billion was terminated. These companies are trying to re-write the healthcare delivery market, and we suspect there will be more to come.

Hospitals

Some other important trends in the healthcare M&A market include the ongoing re-shuffling of hospital assets. After the initial bump up in admissions after the implementation of the Affordable Care Act, hospital admissions and lengths of stay are on the downturn as everyone is seeking to control costs and decrease hospital readmission rates. Value-based payment is replacing fee-for-service payment, and that has been challenging years of methodology. As a result, large not for-profit hospital systems have been merging to gain market share and also pricing strength, while the large for-profit chains that merged several years ago have been shedding hospitals to both pay down debt incurred in those acquisitions and bolster margins.

Long Term Care

Finally, the most active sector for the past several years has been long-term care which, from a number of transactions perspective, peaked in 2015 with about 22{ab00da231405656ab53e236adbc822260719de0342a41ff7a037e7d07eabcb24} of the total volume in the market. Demand has been high in this sector because it attracts real estate investors who believe they will be able to take advantage of what is referred to as the “silver tsunami,” also known as the baby boomer generation.

Sources:

(2018). SENIORS HOUSING AND HEALTH CARE MERGERS & ACQUISITIONS IN THE 21ST CENTURY (4th ed.). Norwalk, CT: Eleanor B. Meredith.