Millions of US senior citizens need some sort of long-term care. The decision to move a loved one into a nursing home or assisted living facility is often difficult—and made more stressful because of the expense.
Matthew Harris, an assistant professor of economics at the University of Tennessee, Knoxville, has partnered with A Place for Mom, North America’s largest senior referral service, to produce an assisted living price index and to further academic research on how individuals can make choices about residential long-term care.
“While long-term care is an intensely studied topic in health economics, choices about assisted living and independent living have not been studied as carefully as nursing home or in-home care, primarily because of data availability,” Harris said.
Using a sample of the company’s total referrals for families, Harris and his partners analyzed data to chart how the costs of the three primary senior living categories–assisted living, independent living, and memory care—compare in the four primary regions of the nation as defined by the US Census Bureau. They looked at monthly fees at more than 10,000 senior living communities.
The result is the National Senior Living Price Index, which looks at the changes in these costs between 2011 and 2014.
They found that average monthly costs range from a low of $2,362 for independent assisted living in the Midwest to a high of $4,345 for memory care facilities in the South.
“While the regional price differences look large, those differences are less pronounced when regional differences in housing costs are factored in,” he said.
Also, he said, families must look at all of the services that are included in the fees.
“Essentially, assisted living and independent living are bundled goods involving a rental housing unit, some medical care, meals, amenities, and assistance with activities of daily living,” he said.
Harris said the current interest in senior living is heightened because of the “silver boom”—the growing number of people from the Baby Boomer generation who now require some level of assisted care, either for medical reasons or day-to-day activities.
“From an economic standpoint, prices result from equilibrium between supply and demand. Part of our current research agenda entails understanding the determinants of both sides of the market, meaning that part of the research is understanding exactly what individuals and families really value in long-term care, be it safety and security, amenities, or the quality of their medical care,” he said.
Amy Blakely (865-974-5034, email@example.com)