Staffing, litigation and care complexity: The senior living industry’s reality

The baby boomer generation is aging rapidly, with significant implications for the senior living industry. With an estimated 73 million baby boomers,¹ this generation is contributing to a rapid increase in the number of older adults.

By 2030, all baby boomers will be 65 or older, and the population aged 65 and above is projected to grow to 82 million by 2050. This will account for 23% of the total U.S. population, up from 17% today.² With these demographic changes comes an increased demand for senior care.

This growing demand for senior living facilities brings challenges, including severe staffing shortages and the increasing complexity of resident needs. The senior living industry is also facing challenges from legal abuse and third-party litigation funding, which affects insurance costs and availability of coverages.

Tackling staffing shortages

The senior living industry is dealing with worsening staffing shortages, impacting the quality of care residents receive. Below are factors driving this issue:

• Shortage of qualified caregivers: Despite efforts to recruit and retain workers, 96% of U.S. nursing homes report staffing shortages,³ with nearly half citing them as severe. This lack of personnel means many facilities are struggling to meet the needs of the aging population.
• High turnover rates: High staff turnover exacerbates the problem, leading to inconsistent care. Burnout and overwork are common as existing staff take on more responsibilities, further increasing turnover and reducing overall care quality.
• Lack of clinical skills: Many facilities, including assisted and independent living, now handle residents with higher acuity needs. These needs require clinical skills that much of the current workforce lacks, raising concerns about inadequate care.

Facility operators can help manage these operational risks by adopting preventative actions:

• Partnerships with staffing agencies: Staffing agencies can provide temporary or permanent workers with the necessary skills to fill gaps, ensuring that care standards remain high even during periods of acute shortage.
• Promote in-house training: Facilities can invest in training programs to upskill existing staff, particularly in areas like dementia care and clinical services.
• Advocate for risk-mitigation policies: It’s possible to guide facilities in implementing strong documentation, retention policies and hiring practices that help manage risks and reduce the likelihood of costly claims tied to understaffing or care quality issues.

Reducing legal abuse and litigation pressures

Legal abuse is an increasing concern in the senior living industry, driving up the costs of insurance claims. Legal abuse refers to rising claim costs driven by increased litigation, larger jury awards and the growing use of third-party litigation funding.

Third-party litigation funding allows plaintiffs to receive financial backing from investors, who, in return, claim a portion of any settlement or verdict. This dynamic encourages more aggressive litigation strategies and increases the likelihood of costly settlements, as plaintiffs are less pressured to settle quickly.

While claims such as those associated with resident falls, improper care and failure to monitor remain the most common, the costs to defend and settle these claims have surged.

The effects of legal abuse are particularly felt in memory care facilities, where settlements and jury verdicts have increased. It not only raises defense costs but also drives up insurance premiums and increases the risk of reputational damage, making it harder for facilities to attract and retain residents and staff.

To mitigate these legal and compliance risks, senior living facilities can take several proactive steps:

• Strengthen documentation and retention policies: Thorough and accurate record-keeping is critical in defending against claims. Proper documentation of resident care, medication rounds and staff evaluations can be crucial in court if a lawsuit is filed. This is especially important in states with elder-abuse statutes. Regular checks and audits can ensure compliance with documentation standards​.
• Prioritize legal and compliance training for staff: In addition to ensuring that staff are adequately trained to handle residents with higher care needs, facilities should implement specific training on legal risks and compliance, such as adhering to elder-abuse laws, documenting falls and accidents, and managing transitions between care levels.
• Review resident placement processes: Facilities should regularly assess whether residents are in the appropriate care level. Delays in transitioning residents from assisted living to memory care, for example, can lead to claims that the facility failed to provide adequate care. Establishing clear protocols for evaluating and moving residents as their needs change can help lessen these risks.

Preventing elopement

Elopement occurs when a resident with cognitive impairments, such as dementia or Alzheimer’s, leaves a facility or a designated safe area without proper supervision or authorization.

This can lead to dangerous situations, as residents may become disoriented, injured or lost. Preventing elopement is crucial to protecting vulnerable individuals and mitigating the risks associated with such incidents, which can lead to severe legal and financial repercussions for senior living facilities.

Elopement poses serious risks to residents, including injury or death. Legal claims resulting from such incidents, especially when prolonged or tragic, often result in costly settlements.

These claims are not only financially draining but also damage the reputation of the facility, making it harder to retain or attract new residents and staff​.

To minimize the risk of elopement, facilities can adopt several measures:

• Comprehensive resident assessments: Regular evaluations to identify residents at high risk for elopement are critical. As residents’ conditions change, they may need to be moved to more secure areas, such as from assisted living to memory care units​.
• Technology integration: Using technology like GPS monitoring devices, door alarms and security cameras can significantly reduce the chances of elopement. Ensuring these systems are regularly maintained is essential, as malfunctioning alarms or worn-out batteries can lead to dangerous situations​.
• Environmental modifications: Visual camouflaging of exits by painting doors to match walls or using colors like black, which residents tend to avoid, can help prevent them from finding exit points. Keypads with frequently changed codes or key fob systems can further restrict unauthorized exits​.
• Staff training and awareness: Regular training on how to recognize signs of exit-seeking behavior is crucial. Staff should also conduct frequent checks on high-risk residents, especially during times when they are more likely to attempt elopement, such as after family visits​.
• Elopement drills and emergency plans: Facilities should conduct regular elopement drills to ensure staff know how to respond promptly and efficiently in case a resident does leave the premises. Quick response protocols, including notifying authorities and staff of a missing resident, are vital for resident safety​.

Managing relationships and expectations with families

Open and honest communication with families is key to setting realistic expectations in senior care. Brokers and agents can play a pivotal role by advising facilities to establish clear communication protocols with families, helping to manage expectations and avoid misunderstandings. Key points include:

• Proper resident placement: It’s essential to place residents in the appropriate care setting. Not all facilities are equipped to handle every medical or cognitive condition. For example, a resident needing memory care might not be suited for assisted living. Selecting the right level of care for residents can help reduce the risk of harm and legal risks. Clear communication about transitions to higher levels of care is crucial.
• Communicating care expectations: It’s essential to help families understand that a loved one’s health may decline, and setting realistic expectations upfront is critical. Discussions about falls, cognitive decline, and other challenges—particularly in conditions like Alzheimer’s—should be part of these conversations.
• Navigating end-of-life care: Misunderstandings often arise during hospice care when families are not informed about the natural dying process. Educating families about conditions like dehydration or skin breakdown helps set expectations and avoid legal issues.
• Ongoing communication and documentation: Regular communication and involving families in care decisions, especially after significant events, is vital. Obtaining signed risk agreements from families and documenting every interaction and care decision is essential for transparency and protecting the facility.

Implementing proactive strategies is the key

Challenges such as staffing shortages, social inflation and complex resident needs directly affect both care quality and the likelihood of costly claims, making comprehensive risk management more important than ever.

Nationwide Risk Management’s team has clinical experience in senior living communities, and the following resources that are available on the Senior Living library of mylosscontrolservices.com can help communities build and strengthen their safety procedures and practices.

• Setting expectations with families and residents
• Reducing the risk of elopement
• Fall mitigation guide for senior living

Senior living operators can also reach out to lcs@nationwide.com to speak with a consultant about a virtual consultation.

By guiding senior living homes in enhancing staff training, strengthening documentation practices, and implementing effective risk management strategies, their liability exposure can be reduced.