Medicare Cuts a Catalyst for Development of Alzheimer’s Care

By Michelle Seitzer / Posted on 25 January 2012

Over the past decade, the increasing popularity and presence of assisted living homes, active adult communities, and other senior living alternatives have impacted nursing home industry growth. Though there has still been a demand for skilled care, SeniorHousingNews.com reports that the recent 11.1% cuts in Medicare payments to nursing homes means that investors are turning to assisted living as “the next big thing,” and particularly communities that provides Alzheimer’s care.

The fact that Alzheimer’s is reaching epidemic proportions (the current total, 5.1 million, is expected to increase to 13.5 million by 2050) is a major contributor to the boom, as demand for specialized care continues to grow.

This may be good news for developers and senior living providers who are seeking fresh opportunities in the industry, but the demand for capital to fund these projects — paired with the already high costs of specialized Alzheimer’s care in assisted living, costs that many American families will not be able to sustain forever — points to a difficult road ahead for all involved.

Given the prevalence of dementia and the overwhelming fiscal and emotional costs of caring for someone with it, families will need Alzheimer’s care facilities at some point, even if it is just to access respite care. Therein lies an opportunity for providers; the challenge will be making it affordable.


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