Expansion of assisted living could hurt nursing homes' bottom line, data suggests

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Growth in assisted living occupancy rates could have a negative impact on nursing homes' revenue, new research suggests.

In looking at state and federal claims data collected between 1993 and 2007, Harvard University researchers found that a 10% increase in assisted living occupancy rates was associated with a 1.4% decline in private-pay nursing home occupancy.

The level of care needed among nursing home residents has grown overall, implying that healthier and wealthier residents are going to assisted living over SNFs, according to lead researcher David Grabowski, Ph.D.

“Assisted living may be a really attractive option for private paying individuals, but it has implications for Medicaid as well in that nursing homes can no longer depend on cross subsidies from private-paying residents since there's maybe fewer of these individuals in that marketplace,” he said.

The study will be published in an upcoming issue of Health Services Research.

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