The cost of living – too long

New facilities meeting needs of aging population
Ask anyone over the age of 75 and they’ll tell you that growing old ain’t for sissies. Because, if living longer is the good news, the bad news begins with poor health, the loss of independence, your privacy, your residence and eventually, the right to drive.
Last year Wisconsin had 705,000 residents 65 years or older. If you’re 40 years now, in another 25 years you’ll be one of 1.2 million people in Wisconsin at that age or older. That 59% increase means that 24% of the population will be 65 or more, all competing for facilities to mitigate the aging process. To sustain the quality of life for older individuals, there’s a growing need for cost-effective, quality care in safe, residential environments, assisted-living without the high costs of nursing homes. Many Wisconsin businesses have risen to meet that challenge.
Assisted-living has been defined as care required for people no longer able to live safely on their own. The majority don’t need the high level care of a nursing home. For half the cost they can get assistance in a private-pay facility with medications, daily activities, transportation, meals and housekeeping.
Jim Murphy, executive director of WALA, Wisconsin Assisted Living Association, says there are currently 517 member-firms in his organization dedicated to serving senior housing needs. Those units cover community-based residential facilities (known and licensed as CBRFs), residential-care apartment complexes (known as RCACs) and secure Alzheimer care residences, most of which are private pay. Like the Cambridge House of Hartland, many of these assisted-living facilities employ community relationship specialists. They make an assessment of individual needs to determine the degree of health-care supervision required and place them according to those needs.
Christine Jedrzejewski, president of Charter Investment Services, is a certified financial planner who specializes in working with older clients. She sees the wealthy and the indigent.
“People neglect to do estate planning,” Jedrzejewski said. “For example, a husband will have power-of-attorney for his wife’s health-care decisions, but when he needs money to pay for her care, he learns he doesn’t have the financial power-of-attorney to sell equities in her name.”
One of WALA’s members, Dr. Gerald Kallas, president of Senior Residence Care of America, outlined the evolution of health-care history with this time line:
“Back in the 1900s, the major cause of death was TB, tuberculosis. People didn’t live long enough to have a heart attack. By 1960 the major causes of death were strokes and heart disease. With cardiovascular surgery and bypass procedures we eliminated a lot of those problems. Then, cancer became the major health threat. We’ve discovered effective treatments for cancer. People are living into their eighties and nineties. Now, the growing health threat is the mind, irreversible dementia or Alzheimer’s.”
Kallas has built or remodeled about 10 facilities for assisted-living since he started Senior Residence Care of America in 1997. Just last year it opened Cambridge House in Hartland and another facility in Horicon.
Four years ago Wisconsin had only 21 assisted-living facilities and 780 apartments licensed as RCACs, where people could obtain the services of laundry, housekeeping, a meal program with dietary assistance, and medical care options. Today, there are 117 with a capacity of more than 4,000. Likewise, the community-based residential facilities (CBRF) have grown to 1,328 with a capacity of more than 21,000.
“We know that the more active you can keep older people, the more active they’ll stay for a long time,” said Kallas, which is why his organization employs a full-time activities director.
A month in advance they publish a schedule of activities with shopping trips, visits to local attractions, and the popular Potawatomi bingo casino.
Currently, there are another 40 RCAC communities under construction. One of those is the Wyndham House of Pewaukee, being built by Senior Residence Care of America.
In addition to one-bedroom suites, where spouses can live together and care for each other, the Wyndham House has a 12-unit secured building for memory-impaired residents afflicted with Alzheimer’s. Across the street from the Wyndham is Cecelia Place, licensed as a CBRF, another one of Kallas’ complexes with 57 one- and two-bedroom apartments for the more independent senior, many of whom still drive. There’s underground parking, beauty salon, luxury bath suites with whirlpool tub, main dining room, lounge and private party room. Between the two complexes Kallas has about $8 million invested. Monthly rents in Cecelia Place range from $1,000 to $2,000, depending on the size. In the Wyndham, the assisted living complex, 800-square-foot apartments rent for $1,800 to $2,000 plus options. Care-givers are in the building 24-hours a day.
Some of the largest health-care organizations in Wisconsin are Wauwatosa-based Alterra Healthcare Corp., the Laureate Group, Encore Senior Living and Harmony Living Center. WALA’s entire membership is listed on the Internet at www.ewala.org.
Kathie Howlett, who consulted with group residences and nursing homes for 22 years, remodeled an existing building in Sturgeon Bay for a community-based residence called The Corner Stone of Sturgeon Bay. With financing from the Wisconsin Housing & Economic Development Association (WHEDA) she opened a 36-apartment assisted-living complex in 1999 called Corner Stone of Oak Creek. Licensed as an RCAC, Howlett said she takes a holistic approach to senior care.
“I dropped my mother’s long-term-care insurance because it wasn’t going to take care of her environmental needs,” Howlett said. “We need more preventative care. Some of these people are in shock because they never expected to live this long.” Her goals are to elevate the level of services and programs for residents with emphasis on their independence. Since only 25% of seniors can afford to pay the cost of assisted-living, Howlett sees the need for funds to subsidize those who can’t afford private-pay facilities. Such a pilot program is under way thanks to a grant from the Robert Wood Johnson Foundation, the Band-Aid people.
Marjorie Kozich, product development officer at WHEDA, worked with the Department of Health & Family Services to win the Johnson Foundation grant of $300,000. Similar grants were made to eight states.
Five Wisconsin counties – Milwaukee, La Crosse, Portage, Richland and Fond du Lac – will participate. The funds give the counties the option of placing seniors in private-pay facilities rather than the higher-cost nursing homes.
To illustrate the cost impact of assisted-living, Christine Jedrzejewski cited an example of a client 102 years old, who exhausted $125,000 of her savings in just two years. When her assets dropped to $2,000, she qualified for Title 19.
Forecasting the growing need for assisted-living residences in rural communities, Kallas said, “I think we’ve reached a plateau in this market for now, but it’s going to peak in another 10 years.” By then, 18% of the residents in Wisconsin will be 65 or older.
Aug. 17, 2001 Small Business Times, Milwaukee