By David G. Stevenson and David C.

Grabowski
doi: 10.1377/hlthaff.2009.0527

Sizing Up The Market For

HEALTH AFFAIRS 29,
NO. 1 (2010): 35–43
©2010 Project HOPE—
The People-to-People Health

Assisted Living Foundation, Inc.

David G. Stevenson
ABSTRACT Assisted living has emerged as an important housing and long- (stevenson@med.harvard.edu)
term care option for older Americans. To date, development of this sector is an assistant professor of
health policy at Harvard
has occurred largely without government financing or regulation. In this Medical School in Boston,
study we used primary data that we collected on county-level assisted Massachusetts.

living supply to gain a fuller understanding of this sector nationally. David C. Grabowski is an
Reflecting their reliance on private resources, assisted living facilities are associate professor of health
care policy at Harvard Medical
located disproportionately in areas with higher educational attainment, School.
income, and housing wealth. As this sector evolves, policymakers will
have to contend with issues related to access to services, public financing,
quality of care, and regulatory oversight.

P
ublic financing of the long-term
care market in the United States
has historically gone to the nursing
home sector. Since the advent of
Medicare and Medicaid, federal
and state policies and a range of political and
practical factors have contributed to an “institu-
tional bias” in long-term care service delivery,
favoring nursing home care over community-
based alternatives.1 Over the past two decades,
however, a wider range of home and community-
based services have become available to older
Americans who need assistance with activities
of daily living. Assisted living in particular has
rapidly emerged as a housing and long-term care
option for older Americans. As of 1999, one-third
of facilities that called themselves “assisted liv-
ing” had been in business less than five years,
and 60 percent had been in business less than ten
years.2
A commonly cited definition of assisted living is
put forward by the Assisted-Living Quality
Coalition, a group of providers and consumer
groups. The coalition defines assisted living as
“a congregate residential setting that provides
or coordinates personal services, 24-hour super-
vision and assistance (scheduled and unsched-
uled), activities, and health related services.”3
General agreement exists about the broader
goals of assisted living care, including accom-
modating residents’ changing needs and pref-
erences; maximizing residents’ dignity, auto-
nomy, and independence; and encouraging
family and community involvement. Yet there
is a great deal of heterogeneity in the range of
services offered and the populations served
across facilities and markets. Indeed, many facil-
ities fall short of the ideal.4 Importantly, the mar-
ket for assisted living has evolved over the past
decade as facilities have come to serve a more
disabled resident population with an increas-
ingly complex array of services, potentially im-
plying that assisted living could be a more viable
nursing home alternative than it initially was.5,6
Growth in assisted living has been driven in
large part by consumer preference. People who
need assistance in performing everyday activ-
ities such as bathing, eating, or dressing prefer
to receive supportive services in the least institu-
tional and most homelike setting possible. A
general population survey found that people
would prefer to be cared for in an assisted living
facility over a nursing home if they needed
twenty-hour care, by a margin of six to one.7 In
addition, for some people with less intensive
care needs, it may be possible to purchase as-
sisted living care at lower prices relative to nur-
sing home care. Although the cost of assisted

JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 35
 living can vary considerably depending on the
amenities and services provided, industry sur-
veys by Genworth Financial put the average an-
nual cost of assisted living care at $34,000 in
2009, compared to $74,000 per year for a semi-
private room in a nursing home.8
An important point from a public policy per-
spective is that the development of the assisted
living industry has occurred largely without
the influence of government financing or regu-
lation. As such, there is no single regulatory
or licensure category for assisted living facil-
ities, which makes it difficult to estimate the
industry’s actual size. With this caveat, one re-
cent study estimated that there were approxi-
mately 38,000 assisted living facilities and
975,000 units nationwide in 2007 (a “unit”
may contain more than one bed, as in the case
of married couples).9 In contrast, the nursing
home industry had approximately 16,100 facil-
ities and 1.7 million beds nationwide in 2004.10
Previous efforts to collect assisted living sup-
ply data have largely been at the state level.9,11
These studies have identified much variation
in assisted living supply across states; however,
examining potential within-state variation or
correlations between assisted living supply and
market-level characteristics has not been pos-
sible. In this study we used county-level assisted
living supply data that we collected from indivi-
dual states. Specifically, we merged a 2007 cross-
section of assisted living data with other market-
level data on nursing homes and population
sociodemographic traits, to gain a fuller under-
standing of the distribution of assisted living
facilities nationally.
Study Data And Methods
ASSISTED LIVING DATA There are no national data
on assisted living facilities; however, there are
separate data sources across states, such as state
licensure registries. The authors collected de-
tailed state-by-state supply data that included
facility name, location, and capacity (units). Our
data include a national cross-section for 2007.
Reflecting its imprecise definition, assisted liv-
ing across states includes a wide range of licen-
sure categories for congregate residential facil-
ities beyond just “assisted living” (for example,
residential care facilities, community living ar-
rangements, and personal care homes). Simi-
larly, state definitions for “units” can vary. Some
states include only one bed per unit, and others
include more than one.
To ensure comparability with previous find-
ings and as a check for the comprehensiveness
of our data collection, we used previous National
Academy for State Health Policy compilations of
36 H E ALTH A FFA IRS J AN UARY 2 0 10 2 9 :1
state-level assisted living supply data as a guide
to data collection and as a basis for compari-
son.9,11 We provide more detailed information
about our data collection procedures and licen-
sure categories included, by state, in an online
appendix.12 For the analyses below, we limited
our supply data to facilities with twenty-five or
more units, in an attempt to focus on facilities
purposely built to be assisted living and to ex-
clude small group homes (for example, adult
foster care facilities).
NURSING HOME DATA We used nursing home data
from the Online Survey, Certification, and Re-
porting (OSCAR) system for all Medicaid- and
Medicare-certified facilities (96 percent of all
facilities nationwide). Collected and maintained
by the Centers for Medicaid and Medicaid
Services (CMS), OSCAR data indicate whether
nursing homes are in compliance with federal
regulatory requirements and include facility-
reported information about facility, resident,
and staffing characteristics. Following an initial
survey, states are required to survey facilities no
less than every fifteen months, and the average is
about twelve months.
Using data from 2007 and earlier, we included
the most recent survey observation for 15,792
nursing homes in our analyses. For these facil-
ities, we also merged information from the Nur-
sing Home Compare database (available online
from http://www.medicare.gov/NHCompare/)
—in particular, the 5-Star quality rating for each
facility, which is a composite measure based on
staffing levels, inspection results, and clinical
outcomes.
COUNTY - LEVEL DATA We obtained data on var-
ious county characteristics from the 2007 Bu-
reau of Health Professions Area Resource File
(ARF). This file contains data on a range of pop-
ulation characteristics at the county level, in-
cluding socioeconomic data, as well as availabil-
ity of medical professionals and services.13
ANALYSES All analyses used a 2007 national
cross-section of data. Using the assisted living
supply data we collected, we first described the
supply of assisted living facilities and units at the
state level, including the penetration of assisted
living units per 1,000 people age sixty-five and
older. For the county-level analyses, we merged
assisted living, nursing home, and ARF variables
into a single county-level observation. Across
these analyses, assisted living penetration (that
is, the number of units per 1,000 elderly people)
is the primary variable of interest.
Our choice of the county as the “market” for
assisted living was partly pragmatic, because the
ARF data are reported at the county level.Yet this
distinction is also consistent with the previous
literature on the nursing home market.14,15 In
addition to denoting counties without assisted
living, we divided counties into quartiles of as-
sisted living penetration, from quartile 1 (low
penetration) to quartile 4 (high penetration).16
Using our geocoded county-level data, we first
present a national picture of assisted living pen-
etration. We next present cross-tabulations of
various county and nursing home traits, by as-
sisted living penetration. Each of these analyses
compared these traits across assisted living pen-
etration quartiles, testing for significant differ-
ences from counties in the highest-penetration
quartile. County traits of interest include educa-
tional attainment, median household income
and other economic indicators, and racial/
ethnic composition; our hypothesis was that as-
sisted living facilities would tend to locate in
relatively urban/suburban areas with higher
socioeconomic status. Nursing home traits of
interest included total residents and beds per
100 people age sixty-five and older, mean occu-
pancy rate, percentage of for-profit and chain
facilities in the county, mean activities of daily
living score and acuity index of residents, payer
mix of residents across facilities, and mean facil-
ity rating on the CMS 5-Star system—the quality-
rating system used on the agency’s Nursing
Home Compare Web site. Inclusion of nursing
home traits was driven by the desire to gain a
greater understanding of nursing home markets
in areas with relatively high and low assisted
living penetration.
Finally, we used the same approach to examine
selected variables available only at the state level
by state assisted living penetration. These vari-
ables include private long-term care insurance
penetration (active policies per person ages 45–
65) and Medicaid spending for all long-term care
and for home and community-based services.
Our hypothesis was that assisted living facilities
would tend to be located in areas with a higher
penetration of long-term care insurance and
greater home and community-based service
capacity.
Results
Exhibit 1 shows the supply of assisted living fa-
cilities across states, including facilities, units,
average facility size, and penetration of units per
1,000 elderly people. Nationally, there were
11,276 assisted living facilities with 839,746 units
nationwide (74 units per facility) in 2007. The
penetration of these facilities varied greatly
across states: Connecticut, Hawaii, and West
Virginia had fewer than 10 facilities per 1,000
elderly, and Minnesota, Oregon, and Virginia
had more than 40. As noted above, our analysis
included only facilities with twenty-five or more
units. This restriction substantially lowers the
total number of facilities nationwide (from
39,562) and more modestly lowers the number
of units (from 1,072,536). Our estimates of the
industry’s size including all facilities are consis-
tent with the previously published studies men-
tioned above.
Exhibit 2 depicts assisted living market pene-
tration by county in terms of the number of units
per 1,000 people age sixty-five and older.
Exhibit 3 shows the correlation between as-
sisted living penetration and a range of
county-level sociodemographic traits. Counties
with higher assisted living penetration tend to
have greater educational attainment, median
household income, and median home values
and a lower proportion of minorities. There were
few significant differences between the two high-
est quartiles, but differences across almost all
traits were significant between the highest and
lowest quartiles of penetration. Counties with no
assisted living facilities, disproportionately lo-
cated in rural areas, are especially distinct from
counties in the highest quartile of penetra-
tion. In the counties with no facilities, rates of
college educational attainment are much lower
(13.8 percent versus 19.9 percent), median
household incomes are much lower ($35,379
versus $43,034), median home values are much
lower ($69,560 versus $98,541), and rates of
minorities in the population are much higher
(17.1 percent versus 12.8 percent), compared
with counties in the highest quartile.
There were fewer significant differences in as-
sisted living penetration across counties on a
range of nursing home market characteristics
(Exhibit 4). The most visible differences center
on the payer mix of local nursing homes. Relative
to nursing homes in markets with lower assisted
living penetration, facilities in areas with higher
assisted living penetration have fewer residents
relying on Medicaid and more residents relying
on other (private) payer sources. For instance,
the mean percentages of Medicaid and “other
payer” in high-penetration areas were 60.6 per-
cent and 27.6 percent, respectively, compared to
69.3 percent and 22.0 percent, respectively, in
areas with no assisted living facilities.
Exhibit 5 highlights the correlation between
assisted living penetration and selected state-
level traits, for which county-level data are not
available. Penetration for long-term care insur-
ance among people ages 45–65 was greater in
states with higher assisted living penetration
(10.0 percent and 5.5 percent across the highest
and lowest quartiles, respectively). States with
higher assisted living penetration also spend a
greater portion of their Medicaid long-term care
dollar on home and community-based services
JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 37
 EXHIBIT 1

Assisted Living Facility Supply, By State, 2007

Average facility Penetration per
State Total facilities Total units size (units) 1,000 elderly
Alabama 116 6,502 56 11
Alaska 11 750 68 20
Arizona 168 14,759 88 19
Arkansas 92 5,022 55 13
California 1,034 120,406 116 31
Colorado 164 10,852 66 23
Connecticut 39 1,752 45 4
Delaware 27 1,841 68 16
Florida 780 61,301 79 20
Georgia 254 15,554 61 17
Hawaii 7 249 36 2
Idaho 69 4,295 62 26
Illinois 255 15,651 61 10
Indiana 305 24,530 80 31
Iowa 192 12,451 65 29
Kansas 191 9,346 49 26
Kentucky 163 9,198 56 17
Louisiana 72 4,781 66 9
Maine 118 5,503 47 29
Maryland 147 10,980 75 19
Massachusetts 163 11,364 70 13
Michigan 182 14,650 80 12
Minnesota 687 65,069 95 104
Mississippi 72 3,653 51 10
Missouri 314 16,740 53 23
Montana 43 2,653 62 21
Nebraska 156 8,569 55 37
Nevada 50 3,730 75 14
New Hampshire 55 3,256 59 20
New Jersey 197 17,710 90 16
New Mexico 61 3,914 64 17
New York 402 37,145 92 15
North Carolina 490 34,425 70 32
North Dakota 50 2,522 50 27
Ohio 483 37,888 78 25
Oklahoma 152 8,708 57 18
Oregon 323 20,535 64 43
Pennsylvania 903 62,531 69 33
Rhode Island 49 3,623 74 24
South Carolina 211 13,485 64 24
South Dakota 47 2,090 44 19
Tennessee 228 13,489 59 18
Texas 507 36,061 71 16
Utah 61 4,135 68 19
Vermont 34 1,501 44 19
Virginia 370 29,103 79 46
Washington 397 25,053 63 34
West Virginia 36 2,052 57 7
Wisconsin 330 17,155 52 24
Wyoming 19 1,214 64 19
U.S. total 11,276 839,746 74.5 22.9

SOURCE Assisted living supply obtained through primary data collection by the authors. NOTES Reporting methods for these data can
vary somewhat by state. Some states count only one facility per physical location, while others count one facility per license. In
addition, state definitions for “units” can vary, with some states including only one bed per unit and others including more than
one. Population data obtained from the 2007 Area Resource File. Penetration per 1,000 elderly obtained by dividing assisted
living units by number of people age sixty-five and older.

38 H E ALTH A FFA IRS J AN UARY 2 0 10 2 9 :1

 EXHIBIT 2

Assisted Living Penetration In The United States, By County, 2007

Penetration (units per 1,000 elderly)

No facilities with more than 25 units
1.10–13.20
13.20–21.23
21.23–32.55
32.55 and above

SOURCE Primary data collected by authors.

JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 39
 EXHIBIT 3

County Traits, By Assisted Living Facility Penetration, 2007

Assisted living
penetration
quartile
Market 2: household No ALF (0) 1 (low) 2 3 4 (high)
Median age (years) 38.04** 36.95 36.87 36.97 36.71
Percent of population age 65+ 15.38%** 14.19% 14.24% 14.37% 14.51%
Percent of population age 85+ 2.01% 1.71%** 1.78%** 1.88%** 2.02%
Less than 9 years’ education 10.70%** 8.77%** 8.37%** 7.49% 7.50%
High school diploma 74.71%** 76.84%** 78.13%** 80.35% 81.13%
College education or higher 13.84%** 16.22%** 17.45%** 19.09% 19.91%
Median household income $35,379** $39,996** $41,044** $41,991 $43,034
Unemployment rate 5.74%** 5.60%** 5.42%** 5.15%** 4.89%
Poverty rate 17.33%** 15.34%** 14.52%** 13.39% 12.88%
Home ownership rate 76.07%** 73.57%** 73.21%** 71.86% 71.90%
Median home value $69,560** $90,697** $91,025** $95,954 $98,541
Percent population white 82.92%** 83.62%** 84.65%** 86.52% 87.18%
Percent population black 9.44%** 10.14%** 9.27%** 7.02% 6.17%
Percent population Hispanic 7.24%** 6.46%** 5.67% 5.36% 4.67%
Urbanicity index (1=urban, 9=rural) 6.53** 4.12** 4.18** 4.13** 4.52

SOURCES Assisted living supply data obtained through primary data collection by the authors. Population data obtained from the 2007
Area Resource File. NOTES Penetration defined as assisted living units per 1,000 people age sixty-five and older. ALF is assisted living
facility. Statistical significance denotes difference from quartile 4. **p < 0:05

(44.4 percent) than do states with lower pene-
tration (31.2 percent).
Discussion
Assisted living has become a widespread housing
and care option for seniors, with almost 840,000
units nationwide. In contrast to the nursing
home sector, where facilities are heavily regu-
lated and depend mostly on public dollars, the
assisted living sector has, to date, grown without
substantial government regulation or financing.
The distribution of assisted living facilities na-
tionally is consistent with what one would ex-

EXHIBIT 4

County-Level Nursing Home Traits, By Assisted Living Facility Penetration, 2007

Assisted living
penetration
quartile
No ALF (0) 1 (low) 2 3 4 (high)
NH residents per hundred age 65+ 4.60 4.36** 4.51** 4.64 4.97
NH occupancy rate 80.36%** 83.14% 81.97% 83.01% 82.73%
NH beds per hundred age 65+ 5.94 5.37** 5.69 5.70 6.18
Percent for-profit NH 49.19% 67.96%** 68.20%** 66.16%** 52.60%
Percent chain NH 49.22%** 53.95% 55.32% 55.64% 53.92%
Average ADL score 3.79** 3.92** 3.96 3.95 3.97
Average acuity index 9.85** 10.19** 10.20** 10.14 10.00
Percent Medicare payment 8.64%** 12.70%** 13.06%** 13.10%** 11.79%
Percent Medicaid payment 69.32%** 67.65%** 65.36%** 61.98%** 60.64%
Percent other payment 22.04%** 19.65%** 21.58%** 24.92%** 27.57%
5-Star rating from Nursing Home Compare 2.89 2.69 2.63** 2.62** 2.78

SOURCES Assisted living supply data obtained through primary data collection by the authors. Population data obtained from the 2007
Area Resource File. Nursing home data obtained from the Online Survey, Certification, and Reporting (OSCAR) data. Facility 5-Star
ratings obtained from Nursing Home Compare database. NOTES Penetration defined as assisted living units per 1,000 people age sixty-
five and older. Statistical significance denotes difference from quartile 4. ALF is assisted living facility. NH is nursing home. **p < 0:05

40 H E ALTH A FFA IRS J AN UARY 2 0 10 2 9 :1

 EXHIBIT 5

Selected State Traits, By Assisted Living Facility Penetration, 2007

Assisted living
penetration
quartile
1 (low) 2 3 4 (high)
LTC insurance penetration 5.48%** 5.58%** 6.94% 10.04%
Medicaid HCBS spending divided by total Medicaid 31.20%** 37.87% 42.59% 44.36%
LTC spending
Total Medicaid LTC spending divided by all Medicaid 32.04% 26.75%** 35.51% 38.38%
spending
Medicaid LTC spending divided by population age 65+ $2,707 $2,481 $3,115 $2,818

SOURCES Assisted living supply obtained through primary data collection by authors. Long-term care insurance penetration obtained
from: Stevenson DG, Frank RG, Hsu J. Private long-term care insurance and state tax incentives. Inquiry 2009;46(3): 305–21. Long-term
care spending obtained from Burwell B, Sredl K, Eiken S. Medicaid long-term care expenditure. Thomson/Medstat; 2008. Population
data obtained from the 2007 Area Resource File. NOTES Penetration defined as assisted living units per 1,000 people age sixty-five
and older. Statistical significance denotes difference from quartile 4. LTC is long-term care. HCBS is home and community-based
services. **p < 0:05

pect, given their reliance on private resources.
They are located disproportionately in areas with
higher educational attainment, income, and
housing wealth. This trend is especially striking
in the context of comparing counties with no
assisted living facilities to those in the highest
quartile of the distribution. For example, the
median home value in the highest-penetration
areas is more than 40 percent higher than
in counties with no assisted living facilities
($98,500 and $69,600, respectively).
After rising sharply in the late 1990s, the sup-
ply of assisted living facilities has moderated in
recent years.9 Moreover, occupancy rates and
access to capital for new construction have both
faced pressures in the context of the current fi-
nancial downturn. Although industrywide occu-
pancy rates are reportedly stable, some assisted
living facilities (such as newer facilities or com-
panies that embarked on ambitious expansion
plans) have struggled to fill beds, especially in
parts of the country where home values—a key
mechanism seniors use to finance care—have
been hardest hit.17,18 Some companies have
sought bankruptcy protection, while others have
looked for ways to contain costs and boost occu-
pancy rates.
The long-term implications of these changes
for the assisted living sector are unclear, but our
data suggest that the growth in assisted living
has dramatically changed the long-term care
landscape. To date, however, very few govern-
ment or academic studies have modeled this
change or considered the potential implications
for the long-term care sector as a whole. Policy-
makers and researchers will need to grapple with
issues related to access to services, public finan-
cing, quality of care, and regulatory oversight.
Each of these issues is considered in turn.
ACCESS TO SERVICES From the consumers’ per-
spective, the emergence of assisted living as a
supportive housing option is largely a positive
development. Given that private-paying consu-
mers “vote with their feet” (and their dollars) in
favor of assisted living, there is a strong prefer-
ence for this care model. It is worth noting, how-
ever, that the sector is still a nascent one and that
there is much variability across states and mar-
kets in capacity and services offered. In particu-
lar, low-income people, including minorities
and people living in rural areas, have substan-
tially less access to this care option. Our findings
also suggest that access to assisted living is great-
est in states where a greater proportion of Med-
icaid long-term care dollars is going to home and
community-based services, which suggests that
community-based service capacity matters. Giv-
en research suggesting disparities by race and
income in the nursing home sector,19 future
research should consider how the differential
presence of assisted living across markets con-
tributes to this phenomenon.
PUBLIC FINANCING To date, states have been
cautious in expanding Medicaid coverage for
services in assisted living facilities. Many states
have small programs under which Medicaid pays
for personal care and medical services in assisted
living, but few assisted living residents receive
these public supports. One recent estimate is
that approximately 115,000 Medicaid recipients
nationwide received services in assisted living
facilities in 2007.9 Unlike care delivered in hos-
pitals and nursing homes, Medicaid cannot pay
for beneficiaries’ room-and-board expenses in
assisted living, which potentially creates a
further barrier to access. Instead, these expenses

JA N UA RY 2 0 1 0 2 9 :1 HE A LT H A FFA IR S 41
 typically are financed from a resident’s income,
including Social Security, Supplemental Secur-
ity Income, state supplements, private pensions,
federal housing subsidies, and—in some states—
family contributions.20
Although there are important noncost consid-
erations in expanding Medicaid-financed care in
assisted living (such as strong consumer prefer-
ence), any proposed expansion is accompanied
by important fiscal caveats. In particular, the
cost-effectiveness of assisted living relative to
nursing home care is unclear, especially if access
is offered more broadly through a state Medicaid
program. Assisted living has the potential to
serve as a cost-effective substitute for higher-
intensity nursing home care for some people.
Yet policymakers are concerned about the moral
hazard (or so-called woodwork effect) likely as-
sociated with offering people an array of long-
term care services, especially attractive options
such as assisted living. A key issue from a state
budgetary perspective is whether assisted living
coverage can be structured to increase substitu-
tion away from Medicaid-financed nursing home
care while minimizing substitution away from
unpaid care by family and friends. In the past,
it has proved particularly difficult to target ser-
vices only to people who otherwise would have
entered a nursing home.21
QUALITY OF CARE To date, there is limited and
uneven evidence about the quality of care offered
in assisted living facilities.22,23 For example, rel-
ative to the quality information that is publicly
reported on the federal government’s Nursing
Home Compare and Home Health Compare
Web sites, there are fewer government-provided
resources to guide consumer choice in assisted
living.24 The paucity of information in this area
results from a lack of uniform assessment data
on assisted living residents as well as from un-
certainty about the range of outcomes for which
facilities should be held accountable.25
Reflecting the orientation of assisted living
facilities toward consumer choice, an important
component in the development of this research
base should be comprehensive quality-of-life
measures—a dimension of study that has proved
challenging in the nursing home sector.26 Final-
ly, an aspect that is unclear is whether the nature
and quality of care would change in the context
of a potentially expanded role for public finan-
cing—a factor that will depend, in part, on the
government’s oversight approach.
REGULATION As noted, there is wide variability
across facilities in services offered and across
states in the degree of government involvement
as a payer and regulator of these services. Some
states clearly specify the types of services that
assisted living facilities can and cannot provide,
sometimes defining distinct licensure categories
accordingly. Other states give providers broader
flexibility to meet the needs of residents.27
The government’s role in assisted living facil-
ity care will inevitably evolve if Medicaid and
other public payers invest more in this sector.
Indeed, twelve states have enacted certificate-of-
need laws to hold down the supply of facilities,
with the idea that the existence of fewer units will
constrain public spending on these services.28
One tension that will likely magnify if public
payments to assisted living increase is the
trade-off between allowing providers flexibility
in structuring housing and service options for
consumers, on the one hand, and ensuring great-
er standardization of care and access to services,
on the other.
A vital component of establishing public policy
in the assisted living sector will be the collection
of longitudinal, market-level data to track the
growth of facilities and the evolution of people
served and services offered. The analyses pre-
sented here offer a snapshot of assisted living
facility supply nationally.
Importantly, these cross-sectional analyses do
not allow one to draw inferences about the im-
pact of growth in assisted living on a range of
Medicaid or nursing home market characteris-
tics over time or about the evolution in the case-
mix of assisted living residents or the services
they receive. Policymakers will need such data
going forward to protect consumers and to craft
sustainable policies that can meet the needs
of our aging population across long-term care
settings. ▪

This work was supported by funding Financing and Organization (HCFO) Foundation (Grant no. 61511).
from the Changes in Health Care Initiative of the Robert Wood Johnson

NOTES

1 Kane RA, Kane RL, Ladd RC. The
heart of long-term care. New York
(NY): Oxford University Press; 1998.
2 Hawes C, Rose M, Phillips CD. A
national study of assisted living for
the frail elderly: results of a national
survey of facilities. Washington
(DC): Office of the Assistant Secre-
tary for Planning and Evaluation,
U.S. Department of Health and Hu-
man Services; 1999.
3 Assisted Living Quality Coalition.
Assisted living quality initiative:
building a structure that promotes
quality. Washington (DC): Assisted
Living Quality Coalition; 1998.
4 Hawes C, Phillips CD, Rose M,
Holan S, Sherman M. A national
survey of assisted living facilities.
Gerontologist. 2003;43(6):875–82.
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lows: quartile 1 (lowest) = 0–13.2;
quartile 2 = 13.2–21.2; quartile
3 = 21.2–32.6; quartile 4 (high-
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14.0 units per 1,000 elderly (Q1);
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27 U.S. Government Accountability
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28 National Conference of State Legis-
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net]. Denver (CO): NCSL; 2009
[cited 2009 Jun 26]. Available from:
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