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Trends impacting memory care facilities

February 8, 2023

Senior living facilities are important parts of communities, helping to provide care and support as the population in the United States ages. The services they provide can vary depending on their focus – and their challenges can also be unique to their specialization.

Memory care facilities, for example, are a type of residential care community designed and staffed to assist people with memory impairments, such as Alzheimer’s disease or other forms of dementia. These facilities typically offer a higher level of supervision and support than other types of senior living communities, as individuals with cognitive impairments have specific needs. Additionally, memory care facilities often have a more structured schedule and routine. They may also have specialized activities and therapies designed to engage residents and help them maintain cognitive function.1

Like senior living facilities, industry trends and market challenges can heavily affect memory care facilities. Navigating these trends can help operators mitigate potential challenges and keep their senior population safe and well cared for. This is especially important considering that the number of individuals with dementia is rising due to the aging Baby Boomer generation. In fact, more than 9 million Americans could have dementia by 2030 and nearly 12 million by 2040.2

Staffing shortages

Memory care facilities—as well as the senior living industry in general—have traditionally struggled to attract and retain qualified talent, particularly in competition with health care organizations like hospitals and clinics. Reasons for this include the emotionally and physically demanding nature of working in a memory care facility. Additionally, some memory care facilities may not offer competitive pay or benefits compared to other health care settings, which can make it difficult to attract and retain staff.

This issue has become increasingly pressing in recent years due to the growing need for long-term care. An estimated 27 million individuals will require long-term care by 2050,3 and the number of people aged 65 and older is projected to rise from 13% in 2010 to over 20% by 2030.4 This will require the hiring of over a million new workers by 2025.5 This is particularly concerning for memory care facilities, as the number of Alzheimer’s disease cases is predicted to rise to an estimated 14 million people by 2060.6

Staff shortages in memory care and other senior living communities can lead to neglect and abuse of residents, as employees may be overburdened and unable to attend to all necessary tasks. In some cases, facilities may be forced to hire inexperienced staff who may lack the training to adapt to changes in resident needs or handle emergencies.

Social inflation

For memory care facilities, the impact of social inflation largely relates to an uptick in senior living claims costs. While the types of claims commonly seen in memory and other senior living settings have remained largely unchanged over the years, the cost of each claim has been increasing.

Social inflation is driven by several factors, including litigation funding and changes in tort reform7:

  • Litigation funding—Litigation funding is a way for plaintiffs to finance a lawsuit by receiving resources from a third party. In return, the third party earns a portion of the settlement if the case is successful.
  • Tort reform—Tort reform refers to laws that are designed to reduce litigation. Specifically, tort reform is used to prevent frivolous lawsuits and preserve laws that prevent abusive practices against businesses. However, in recent years, some states have modified or challenged tort reforms as unconstitutional.

The following list highlights some of the most common claims in long-term care:

  • Falls
  • Improper care
  • Failure to monitor
  • Pressure injuries
  • Resident abuse
  • Delay in treatment

The cost and effort needed to defend even just one of these claims can be devastating for memory care facilities. Moreover, due to social inflation and an increase in the frequency and severity of claims, memory care facilities could be subject to higher premiums, further impacting their bottom line and ability to provide adequate care to their senior populations.

A claim—especially one that involves allegations of neglect or abuse—can also damage the reputation of a memory care facility, leading to negative publicity and challenges related to attracting and retaining residents.

Risk management strategies

Given the potential impact of staffing shortages, social inflation and similar exposures, it’s critical for memory care facilities to be prepared. There are several loss control strategies that memory care facilities can enact to mitigate their. Strategies may include:

  1. Training—Proper staff training can help prevent incidents that may lead to claims. This can include training on safety procedures, patient handling, and how to recognize and report potential abuse or neglect. To ensure staff is well-equipped to handle the constantly changing needs of memory care residents, it’s important to review and update training requirements for all employees periodically. Organizations may also benefit from requiring staff certification in memory care through reputable, national programs.
  2. Policies and procedures—Developing clear policies and procedures can help to minimize the likelihood of incidents or accidents. In memory care settings, residents with behavioral challenges or other specific needs are common, and organizations may want to build out policies for specific patient concerns. In many cases, these specific needs will require a multi-disciplinary approach and a full care team that includes nurses, social workers, therapists, pharmacists and licensed physicians. Policies and procedures need to account for these individuals and clearly outline responsibilities.
  3. Regular assessments—Memory care facilities should conduct regular assessments of their operations and equipment to identify potential risks and take steps to mitigate them. This can include conducting regular safety audits, reviewing policies and procedures, and identifying areas for improvement. As part of these regular assessments, memory care business owners should consult their insurance advisor to ensure they have the proper coverage in place.
  4. Resident evaluation—Along with managing risks with existing community members, it is important to consider the liabilities associated with any new residents. As such, thorough assessment procedures should take place before any new resident is accepted into the community. The person conducting the assessment should have the experience to determine whether the memory care facility can meet the resident’s needs and that care can be provided without putting either the new resident or existing community members in the way of hazards.
  5. Facility design—To help ensure resident safety, the facility’s physical environment should account for risks related to slips, trips, falls, wandering patients and other common hazards. It is also crucial to have a comprehensive emergency plan that covers all stages of an emergency and clearly defines the roles and responsibilities of all relevant parties.
  6. Accreditation—Obtaining quality-of-care accreditation is a crucial step in ensuring that residents receive the highest level of care and support. Quality-of-care accreditation is often awarded by organizations with established standards for treating individuals with dementia or other cognitive impairments. These standards cover a range of areas, including staff training, resident safety and the facility’s physical environment.

Overall, a comprehensive risk management strategy can help memory care facilities identify and address potential risks, protect against losses, and ensure the safety and well-being of their residents.