published Sunday, May 10th, 2009

Chattanooga: Assisted living costs rise with demand

by Emily Bregel
Audio clip

Beth Ludden

The cost of assisted living care grew about four times faster in Chattanooga over the past five years than in three other large Tennessee cities, according to a recent study.

In Chattanooga, where the median annual cost for this type of care is $29,760, assisted living rates have risen 13 percent annually over the past five years, compared to 4 percent in Memphis, 3 percent in Knoxville and 2 percent in Nashville, according to the study released in April by Genworth Financial.

Genworth is a global company that offers long-term care insurance, wealth management and other services.

The annual median cost of care in a private room in an assisted living facility is $28,890 in Nashville and $33,450 in Memphis.

In the same five years, the medical annual cost of nursing home care in Chattanooga barely has budged, the study stated.

But that doesn’t mean that assisted living care in Chattanooga is more expensive than other major cities in Tennessee; in fact, the increase brings Chattanooga’s cost of assisted living closer in line with other major cities, said industry analysts and assisted living administrators. The increase likely signals rising demand for assisted living care, and improved options in the Scenic City, they said.

“Pricing-wise, we’re very competitive,” said Sally Brewer, case coordinator with Verble Estate Preservation and Advisors, a legal and financial planning firm in Chattanooga. “We must have been really cheap and, finally, with the influx of all the seniors coming into the area, we’re finally catching up with everybody.”

Genworth surveyed providers to determine what drives price increases, and labor costs topped the list, said Beth Ludden, senior vice president for product development at Genworth Financial.

“It could be that there is a relatively high demand (in Chattanooga) for assisted living and that would require more labor” and higher salaries to recruit and retain staff, Ms. Ludden said.

Occupancy rates at assisted living facilities are averaging about 80 percent in Chattanooga, meaning there’s room for growth short-term, but if the over-65 population continues to rise here, more beds will be needed, Ms. Brewer said.

Rising Demand

Since Medicare reduced the amount of time it will compensate hospitals for inpatient care, nursing homes have ended up with patients who are sicker and who, in years past, would have still been hospitalized, Ms. Ludden said.

“That just has pushed out the patients (who need) the more personal care services or dementia care into assisted-living facilities and into their homes as well,” she said.

An Alzheimer’s Association representative agreed that rising costs in assisted living are due at least in part to rising demand for elder care, tied to the rising incidence of Alzheimer’s and dementia.

“It a chronic, progressive disease and they do not immediately go into a nursing home, but because of the safety issues and the care-needs issues, assisted living is a very natural progression in the course of the disease,” said Amy French, program coordinator with the Alzheimer’s Association’s Mid-South Chapter.

Changing Demographics

Until about eight years ago, local residents had very few options for assisted living. A number of smaller providers opened up here but few residents were aware of the services, and many opted for better-known providers out of town, said Page Ensor, president of the Tennessee Assisted Living Federation.

“It was overbuilt for a while” in Chattanooga, which could have contributed to below-market value pricing, she said. In the years since, local demand has caught up with supply, she said.

In recent years, the Choose Chattanooga program, in addition to the governor’s Retire Tennessee initiative, has tried to draw older residents to the region, said Dinah Bailes, executive director of Morning Pointe of Chattanooga assisted living facility.

“They are actively recruiting retirees to Chattanooga,” she said. “I would say, in the last five years, that Chattanooga’s retirement market has matured and that there are more sophisticated choices for the retiree out there.”

At Morning Pointe of Chattanooga, occupancy is at 95 percent, Ms. Bailes said. Three years ago, Morning Pointe opened a second location in Collegedale and soon will open a facility in Hixson due to rising demand, she said.

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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insideeldercare said...

I am a huge fan of assisted living and credit it with saving my mom's life. After she had a stroke in 2005, I found there weren't many options that sought to dispel the myths and stereotypes of elder care. I wrote the book "By Families, For Families Guide to Assisted Living" to help families effective transition a loved one to assisted living and do so in a way that made it a foundation for a new lifetime of memories.

Assisted Living is a framework and they do a great job at taking care of your loved one. The more the family participates in the process, the better the community can provide for the loved one.

Ryan Malone Founder, Inside Elder Care>

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