Written Statement of
Robert Lohr
on behalf of the National Center for Assisted Living
for the Hearing before the
U.S. Senate Special Committee on Aging
Assisted
Living in the 21st Century:
Examining its Role in the Continuum of Care
Submitted April 26,
2001
for the Hearing Record
Chairman Craig and members of the
Committee, on behalf of the National Center for Assisted Living,
I would like to submit the following statement for insertion
in the hearing record. My name is Robert Lohr and I am Founder
and President of Peridot Enterprises, Inc., a Pittsburgh, PA
company that operates several assisted living facilities in
Florida. I am also the Chairman & CEO of a small public
company that specializes in assisted living in Florida.
I have worked in the long term
care profession for more than 20 years, starting my career in
nursing homes and later diversifying into assisted living. During
that time, I have developed, constructed or managed more than
35 assisted living facilities, including retrofitting vacated
schools, convents, historic hotels and large homes into assisted
living communities.
The National Center for Assisted
Living (NCAL) is the assisted living voice of the American Health
Care Association. NCAL represents 2200 proprietary and non-proprietary
assisted living and residential care facilities nationwide.
NCAL is committed to fostering growth in assisted living and
ensuring that people have access to quality assisted living
services by supporting responsible public policies, providing
professional education and development services, and by being
an information and research resource for the public, state and
federal policymakers and the media.
Assisted Living: An Innovative
Approach
Based on a Scandinavian model for
senior living, assisted living first emerged in America during
the mid-1980s. Unlike other medical models found in most health
care settings, assisted living is based on a social model of
care, which translates into a holistic approach toward serving
residents. Independence, autonomy and choice are words that
define assisted living, and are the concepts that have made
assisted living so popular with the public. People living in
assisted living residences receive help with their daily lives
so they can retain their sense of individuality and belonging
in their communities.
Numerous changes have taken
place in the assisted living profession since the last Senate
Special Committee on Aging hearing two years ago, and much research
has been completed since that time about the preferences of
assisted living consumers and their adult children. We have
seen states rapidly escalate their regulation of assisted living
and revise existing regulations to address changes that have
occurred in the assisted living profession.
Findings from a 2000 study
conducted by the National Academy of State Health Policy illustrate
the importance states are placing on assisted living regulatory
oversight. One-half of the states were actively working to revise
their regulations last year, and 17 states have revised their
regulations since June 1998. This level of activity demonstrates
that states are taking a serious and responsible role in overseeing
assisted living residences. It is a dynamic and ongoing process
that should be allowed to continue.
There is also recognition that
assisted living should be regulated differently than nursing
facilities. In its 2000 report titled Improving Quality of Long-Term
Care, the Institute of Medicine stated there was general consensus
among Committee members assembled to develop the report that,
"at this time, regulatory mechanisms for residential care
do not need to mirror the extensive federal regulatory system
that is in place for nursing homes."
A few states have incorporated
exciting new approaches toward assuring quality in assisted
living. For instance, in Washington and California, the states
utilize state-employed consultants that assisted living providers
and managers can call to help troubleshoot problems, answer
questions about state requirements and share best practices.
This type of assistance is invaluable to the provider community
and more importantly, improves the quality and consistency of
care and services delivered to assisted living residents. It’s
important to note these types of consultant programs are a supplement
to – not a substitute for – the state’s existing traditional
enforcement system. NCAL fully supports these types of voluntary
consultant programs and believes policymakers should encourage
their development in other states. Further, it is important
to note that these are the types of programs that are envisioned
by the Assisted Living Quality Coalition.
One area of concern with state
oversight that has been expressed by a few of NCAL’s state affiliates
is the underfunding of state assisted living oversight efforts.
The net effect of this underfunding is an inadequate supply
of surveyors to conduct facility inspections on schedule. Indeed,
our affiliate in Kansas, the Kansas Center for Assisted Living
(KCAL), has asked the state to increase its resources and hire
more surveyors. It is KCAL’s belief that underfunding these
programs does a disservice to assisted living residents and
the assisted living profession because a handful of facilities
have had problems that have not been addressed.
NCAL firmly believes that regulation
of assisted living should remain on the state level. While there
are variations in how states regulate assisted living, the greater
freedom that states have to design their own systems makes for
more responsive and proactive oversight. We know too well the
many problems and conflicts in the federal and state regulation
of nursing homes. It would be a mistake to burden assisted living
with a system that doesn’t work. Indeed, it is consumers who
have been driving the popularity of and growth in assisted living,
not government programs, regulations or funding. This is an
important fact to recognize and the primary reason that assisted
living’s primary focus must always be the assisted living resident.
NCAL further believes that
policymakers should support research and testing of quality
measurement systems based on performance outcomes. These are
the measures most meaningful to consumers and most powerful
for incorporating continuous quality improvements into the assisted
living setting. One role that Congress could take in this matter
is fostering and supporting research in this area, along with
the funding of pilot programs in states. Quality measurement
and assurance is and should be an ongoing process.
Follow Up to the GAO Report
Two years ago, the General
Accounting Office (GAO) released to the Committee its report
on assisted living based on its evaluation of assisted living
in four states. GAO raised concerns about the failure of some
assisted living facilities to fully disclose certain information
identified as critical information to a consumer’s selection
of an assisted living community. NCAL took these findings seriously
and agreed that providers should freely disclose this type of
information. As a result, NCAL developed a special insert to
its consumer guide addressing the same elements identified by
GAO. The insert contains a series of questions that NCAL recommends
consumers ask before making a final decision to move into a
particular assisted living facility. NCAL requests that a copy
of this insert be included in the hearing record. NCAL’s consumer
guide, along with the insert, are distributed free of charge
to any consumers who request copies and are available on NCAL’s
award-winning web site www.ncal.org
which receives an average 67,000 "hits" each month.
NCAL also re-examined its guiding
principles for assisted living providers. In addition to adding
language reiterating our commitment to full disclosure and ethical
marketing practices, we disclose how the provider handles emergency
medical situations. Another area NCAL addressed was the use
of the phrase "aging in place" and how it’s used in
marketing efforts. While originally intended as a consumer-friendly
term to describe the practice of increasing services to meet
changing resident needs, we have learned that the phrase led
to confusion and misunderstanding. Therefore, NCAL now discourages
the use of the term for marketing purposes unless accompanied
by a list of all health-related reasons for which a resident
would be asked to move out of the facility, regardless of whether
those health-related occupancy restrictions are prescribed by
state regulation or part of a facility’s operational policies
and procedures. I would like to submit a copy of NCAL’s Guiding
Principles for the hearing record.
Finally, NCAL has published
a guide about appropriate marketing practices in the assisted
living and residential care setting. Titled The Power of Ethical
Marketing, this guide has been distributed to NCAL members and
is available free of charge to anyone who requests a copy. The
guide focuses on the importance of clear and consistent written
and verbal communication and stresses the role that all staff
members play in the ethical marketing of a facility. In addition,
the guide includes the American Marketing Association’s Code
of Ethics to help educate facility staff about the elements
of ethical sales and marketing programs. NCAL requests that
a copy of this guide be submitted for the hearing record.
Government Oversight in the
21st Century
As previously stated, it is
NCAL’s strong belief that assisted living regulation and oversight
should remain on the state level. Far greater focus needs to
be placed on quality measurement systems for assisted living
that focus on customer satisfaction and actual outcomes. Such
a system could be utilized by providers, consumers and government
to ensure that quality services and care are being maintained
and, even more importantly, improved on a continuing basis.
Developing a quality performance measurement system would better
serve the interests of the assisted living customer by providing
each resident with powerful input into the quality evaluation
process and the delivery of services.
Performance Indicators
Beyond customer and staff satisfaction,
any quality measurement system must also include measurement
of actual performance in three primary areas: clinical, quality
of life and functional outcomes.
To be able to measure performance,
certain data about each resident must be obtained, tracked and
updated. From this data, quality indicators can be identified
and utilized to track the outcomes of the care and services
being provided by a facility. The benefit to such an approach
from a facility operations standpoint is that problems can be
quickly identified and fixed.
NCAL strongly believes that quality
measurement is an ongoing process, not an annual inspection.
More importantly, a facility can use this data as part of its
continuous quality improvement program. This data gives facilities
the ability to measure their performance over a period of time
and identify trends on a facility and individual basis. Facility
data can also be included in a network of data from facilities
across the country, which would permit facilities to see how
their performance compares to other facilities in their community,
state, or nationwide. Continuous monitoring of performance is
also a more dignified and reliable way for staff to evaluate
how well they are doing their jobs.
More research needs to be completed
in this area. We believe that Congress could help progress in
this area by supporting research in the development of performance
indicators and conducting pilot programs in various states.
NCAL would welcome the opportunity to work with Congress on
such an initiative.
Challenges Faced in the Assisted
Living Profession
Increasingly, private long-term
care insurance is helping older Americans pay for their assisted
living needs. This reduces reliance on public programs to pay
for long term care needs and helps seniors preserve the assets
and savings accounts they have worked their entire lives to
build. Congress is to be commended for opening long term care
insurance to the federal work force last year. NCAL also believes
Congress should act on S. 627, the Long-Term Care and Retirement
Security Act of 2001, offered by Senators Grassley and Graham.
This bill will provide individuals an "above-the-line" deduction
for the premium costs of their long term care insurance and
access to long-term care insurance through cafeteria plans where
they work.
The bill also provides a $3,000
tax credit to help individuals and family caregivers with long-term
care costs. Passage of such legislation will provide the incentives
necessary to encourage individuals to take personal responsibility
for their own long term care planning and provide individuals
and their family caregivers with the support they so rightfully
deserve.
As members of the Committee
are aware, our country is facing a nurse staffing crisis. This
crisis impacts assisted living providers. We also face a shortage
of frontline workers that is reaching crisis proportions in
assisted living and other long-term care settings. The Committee
is aware of the impact underfunding of important programs like
Medicaid have on a long term care facility’s ability to recruit
and retain qualified staff. It’s also important to remember
that while many assisted living residents don’t rely on these
programs, they do live on fixed incomes and cannot afford to
pay for dramatic increases in labor costs. The labor crisis
is an issue that Congress must address now, given the rapidly
growing number of elderly in this country. Public policy must
get ahead of the curve and stave off what could be a catastrophic
outcome.
To help address the nurse and
frontline staff shortages, we propose that Congress implement
income tax incentives for assisted living and other long term
care workers to help attract and retain qualified employees
in the long term care profession. Our country’s policies have
a long history of under-valuing and under serving older Americans
with long term care needs.
The implementation of income
tax incentives would be a proactive step Congress could take
that sends a clear signal about the importance government and
society places on ensuring our nation has a workforce in place
that’s equipped to care for the elderly, and the value government
places on the work done by the long term care professional.
NCAL also encourages Congress
to temporarily ease immigration rules that would allow essential
workers to enter the country and help stem the current staffing
crisis that we face. Virtually every assisted living residence
in this country is experiencing severe difficulty hiring and
recruiting workers. The simple fact is that these caregivers
do not exist in this country today. We believe Congress needs
to do a thorough reexamination of existing immigration laws
to respond to the problems that a full employment economy poses
on the health of long-term care communities.
Congress should reenact a program
such as the now repealed H-1-A program. Further, Congress should
enact a new visa category that allows essential workers to enter
the country to fill openings in shortage jobs that are not seasonal
or temporary. Currently, there is no visa category that addresses
these essential long-term care workers. This new visa program
should be targeted to critical shortage areas such as long-term
care.
Another area of concern is
the level of public understanding about long term care and the
host of other issues facing the elderly. Our society as a whole
is youth-oriented, and we do little to prepare people for living
to be age 85, 95 or 105. Yet, more and more people are living
to those ages. These elderly and their families are ill prepared
to manage the issues they face. This is a growing problem that
NCAL believes must be addressed. We believe Congress should
support public/private partnerships to help the elderly and
their families better cope with the challenges they face.
We applaud the Committee for
focusing today on the need to ensure that rural communities
have access to assisted living services. NCAL could not agree
more. One program that was helping rural states such as Iowa
and Nebraska deliver assisted living to sparsely populated areas
was the Intergovernmental Transfer of funds from the Medicaid
program. Last year, Congress voted to phase out the ability
of states to use these funds. This decision will leave a gap
in rural America that needs to be filled. Many small communities
cannot support assisted living without the government’s help.
It is our hope that this Committee will explore alternatives
so that older citizens don’t have to leave their hometowns to
be able to access assisted living services when they need them.
The Committee should also be
aware of a very real threat that looms for assisted living and
all long term care providers: skyrocketing liability insurance
premiums and the difficulty assisted living providers are having
finding liability insurance policies. The availability and affordability
of liability insurance for assisted living facilities has reached
a crisis point that continues to grow worse each passing day.
In Florida, where I own and operate several assisted living
facilities, the state requires by statute that assisted living
facilities maintain liability insurance as a condition of licensure,
but this coverage is simply not available at an affordable rate,
if at all.
In the past year, 15 insurance
companies have left Florida due to the litigious environment.
The annual cost for a liability policy with $300/$600,000 limits
was about $500 per small assisted living facility in Florida.
Now the liability insurance rates are $500 to $1000 per licensed
bed. In many cases, there is no insurance available, except
from a company that will offer a $25,000 limit for a rate of
$526.60 per licensed bed.
An additional crisis is apparent
because there are no insurance companies willing to write coverage
for assisted living facilities that hold an extended congregate
care (ECC) or limited nursing service (LNS) license. These assisted
living facilities have to surrender their specialty licenses
in order to receive any insurance quote at all. An ECC or LNS
license is required for an assisted living facility to participate
in Florida’s Medicaid waiver program. Without the ECC or LNS
licensed assisted living facility, it is reasonably foreseeable
that 2,600 Floridians served by the waiver program will be moved
from assisted living facility to assisted living facility as
each facility’s insurance policy expires. Without participating
assisted living facilities, these elderly people ultimately
will end up in nursing homes even though they don’t require
that intensive level of care.
At a recent meeting of the
Florida Center for Assisted Living, personnel from 23 facilities
representing more than 1,500 beds were in attendance. Nine of
the 23 facilities had already surrendered their ECC or LNS licenses,
thus removing 447 assisted living beds from Florida’s Medicaid
waiver program. This is bad public policy. These 2,600 individuals
matter. They matter to us. They matter to their families. They
are poor and have no where else to go. I’m very concerned that
they don’t seem to matter to decision makers in Florida based
on these recent developments.
As a result of the tort liability
crisis being perpetuated in some states by personal injury lawyers,
it’s not uncommon to hear from providers in other states that
their annual liability insurance premiums are escalating with
annual premium increases of 200 to 800 percent. These increases
negatively impact the elderly and the taxpayer because they
are the ones who ultimately pay for the higher insurance premiums.
We understand that insurance is largely a state issue but we
believe this Committee needs to be aware of the crisis in Florida
and elsewhere, and should encourage states to address these
matters before the situation becomes any worse or is repeated
in your respective states.
Conclusion
Assisted living is an innovative
long-term care model that is increasingly popular with the public.
The profession is identifying better ways to serve the elderly,
and state governments are taking an active role in insuring
quality care and services in the assisted living setting.
The assisted living industry
is in its formative state, and is still maturing and growing.
Government policies should nurture this growth, not stunt it.
As we’re seeing in many states, and in many communities, the
assisted living setting is the future of long-term care. All
stakeholders have a collective interest in ensuring that, in
the final analysis, the watchwords associated with assisted
living are, "quality," "integrity," "choice,"
"flexibility," and "compassion."
NCAL welcomes the opportunity
to work with this Committee, with Congress, with the Bush Administration
and with other government officials in their efforts toward
ensuring health care in general, and assisted living settings
in particular, are the best that they can be for every citizen,
from every walk of life. Thank you.
