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Preference for ‘aging in place’ slows nursing home construction

Boise at Home member Hilda Packard works in her garden. Nursing home construction has slowed dramatically, in part because of a preference for assisted living facilities and programs that allow seniors to live in a more home-like, less restrictive environment. Photo by Gary E. Richardson of Boise at Home.

Boise at Home member Hilda Packard works in her garden. Nursing home construction has slowed dramatically, in part because of a preference for assisted living facilities and programs that allow seniors to live in a more home-like, less restrictive environment.
Photo by Gary E. Richardson of Boise at Home.

While hospital construction is proceeding apace, that’s less true for nursing homes, primarily because of a preference toward assisted living facilities that enable senior citizens to age in place.

“There’s very, very few new nursing homes being built,” due to the proliferation of assisted living facilities, said Brent Brocksome, who has owned and operated nursing homes in Idaho since the 1980s and who was also elected as a state legislator from Boise, as well as serving as the chair of Governor C.L. “Butch” Otter’s Select Committee on Health Care in 2007. “No one is going to go build a new building. There hasn’t been development of skilled nursing facilities in the state for a long time.”

“Aging in place” is a concept by which people live in a more homelike setting in the least restrictive environment possible. For example, while they may get help managing SQFT Oct 21 story blurbtheir medication, as well as in getting meals and help bathing, they generally don’t need skilled, around-the-clock nursing services. Such facilities may offer a variety of choices for living as the person ages. “You buy in and pay for an apartment, and as you age and need other services, they have assisted living to skilled and other services,” Brocksome said. “It’s a nice arrangement for the provider and residents because they don’t have to go look for another place to live.”

Diane Ronayne, secretary of Boise at Home, said that choosing to stay at home is less expensive than moving to a facility. Boise at Home is a recently created nonprofit program that aims to help seniors stay in their homes.

Ronayne said homemaker or health aide services delivered in the home cost around $45,000 in Boise last year. A single-occupancy bedroom in an assisted living facility cost $43,200. And a semi-private room in a nursing facility with more services for health is $89,000 annually for a semi-private room or close to $100,000 for a private room, she said.

“That’s why people are looking at staying at home; it makes a lot more sense,” she said. “Even if they need to bring in a home health service, they’re $15 to $26 an hour at the most.”

People who do require skilled, around-the-clock nursing services often need it for only a short-term basis while they recover from surgery or some other condition, so such facilities are now considered “rehabilitation,” Brocksome said. “They offer more intensive therapy and staffing, and more equipment than a standalone nursing home would have.”

Another complication in constructing new facilities is that Idaho offers few sources to support the construction of nursing homes or assisted living facilities. “The state has a couple of nursing homes in the state such as the VA nursing homes, but all new construction is privately funded,” said Tom Shanahan, public information manager for the Idaho Dept. of Health and Welfare. “We do reviews of new construction plans, and then licensing when they are completed, but are not involved in their funding decisions.”

In Idaho, there are five basic methods by which nursing homes and assisted living facilities are funded, Brocksome said.

  1. Private personal funds, with or without bank participation. For example, under what’s called a “1031 exchange” by the Internal Revenue Service, two investors can exchange two different properties, with the advantage that they don’t have to pay capital gains on the proceeds, Brocksome said.
  2. Bank financing, as with a conventional mortgage.
  3. The United States Department of Housing and Urban Development (HUD) offers what’s called “Section 232” loans to help finance nursing homes, assisted living facilities, and board and care facilities. “Facilities are all private. No state funding,” said Robert Vande Merwe, executive director of the Idaho Health Care Association. “Some get very low interest rates from HUD loans. I believe that’s the only government help there is for development.”
  4. Private investors for people who have some liquid assets and need a place to park their money, Brocksome said. “They might give the investor 5 to 6 percent, which is better than you can get at a bank.”
  5. A real estate investment trust, or REIT, is an increasingly common way to investment in all sorts of properties, not just long-term care facilities, though some do specialize in just healthcare facilities, Brocksome said. “REITs go around the country looking for people with lots of facilities” that can be packaged into a $15 to $20 million bundle, which are then leased to an operator to run, he said.

Most of the long-term care facilities over the past five years with which Brocksome is familiar have been funded as REITs or with investors, he said.

 

Boiseans are getting older

By 2030, one out of every five Americans will be at least 65 years old. By contrast in 1950 fewer than one in 12 Americans was 65 years old or older.

COMPASS, the Community Planning Association of Southwest Idaho, collects and analyzes data for the metropolitan planning area of Ada and Canyon counties. It found that the number of households with children will decline from 45 percent to 27 percent, while households without children will rise from 55 percent to 73 percent. Single-person households have more than doubled in number from 1970 (14 percent) to 2000 (31 percent), and will reach 34 percent in 2030.

Likewise, in the city of Boise, residents ages 65 and older make up the fastest-growing age group. About 23 percent of Boiseans were age 55 or older in 2010, and this number is expected to rise to 27 percent by 2017.

Source: Boise at Home

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