The struggle to lower healthcare costs, especially Medicare and Medicaid, affects us all – from Congress to long-term providers to the very seniors we serve.
As an affordable housing provider for low-income seniors, we know first-hand that many senior residents could live more independently if only they had the right support. When I joined National Church Residences 20 years ago, our overarching goal was to combine practicality and caring with a successful housing approach – and that’s been the goal since our founding in 1961.
Our experience, especially when we began offering health care services, demonstrated that housing with support services wouldn’t cost more at all. In fact, it would cost less.
Today, we know that affordable housing with services is a viable, successful platform to deliver healthcare more cost-effectively — and with better results. How? We were so certain of our care model (especially at a time when families were asking for alternatives to a nursing home bed), that we tested it by developing attractive, safe and affordable housing paired with support services.
The proof came when the Kresge Foundation provided National Church Residences and the Ohio State of Office of Health Transformation with a $150,000 cost-study grant to study cost savings at our affordable assisted living communities (created with HUD grants).
The result: not just cost savings. Substantial cost savings.
The study, conducted by Health Management Associates, found that our model provided a 49% savings over the cost of a nursing home bed — all while saving the state $73.08 per person per day vs. living in a nursing facility. For perspective, a nursing home bed cost (including other medical costs incurred outside the bundled rate) averaged $149.44 per person per day. The average cost for individuals in an assisted living apartment, including other medical costs incurred outside the waiver rate, was $76.37 per person per day.
Additionally, the report concluded that the affordable, assisted-living environment allows seniors to live in communities more independently. This is incredibly exciting news for all of us providing the continuum of housing services and long-term care. It’s a road map for substantially reducing Medicaid costs while also improving health outcomes.
Here’s the reality. About 20% of those in skilled nursing facilities could actually live in affordable senior housing, but they don’t. Why? Almost all of Ohio’s assisted living facilities are private-pay and don’t accept Medicaid-eligible residents.
The truth is, if Medicaid committed even a small percentage of the dollar difference to community-based housing with services, more seniors could move to a much more cost-effective model – with improved results.
Now that we can demonstrate the initial Medicaid savings, we all must work in collaboration with others to seek creative financing options to expand such lower cost, high-quality solutions.
Michelle Norris is the senior vice president of business development & public policy at National Church Residences. National Church Residences is committed to excellence that transforms the lives of the people it serves.