An analysis of the demand for an assisted living facility in the Wagoner, Oklahoma, medical service area

              An Analysis of the Demand
for an Assisted Living Facility in the
Wagoner, Oklahoma, Medical Service Area
Oklahoma Cooperative Extension Service
Rural Development
Oklahoma State University
Oklahoma Office of Rural Health
Rural Health Policy & Research Center
Oklahoma State University
March 2010
AE-10002
An Analysis of the Demand for an Assisted Living Facility
in the Wagoner, Oklahoma, Medical Service Area
Lara Brooks- Assistant State Extension Specialist, OSU, Stillwater
405-744-4857; FAX 405-744-9835
lara.brooks@okstate.edu
Brian Whitacre - Extension Economist, OSU, Stillwater
405-744-9825
Jack Frye - District Rural Development Specialist, OSU, Ada
580-332-4100
Alan Parnell - Wagoner County Extension Director, OSU, Coweta
918-486-4589
Val Schott - Director, Oklahoma Office of Rural Health, Oklahoma City
405-852-3100
Oklahoma Cooperative Extension Service
Rural Development
Oklahoma State University
Oklahoma Office of Rural Health
Rural Health Policy & Research Center
Oklahoma State University
March 2010
1
An Analysis of the Demand for an Assisted Living Facility
in the Wagoner, Oklahoma, Medical Service Area
This report will examine the need for an assisted living facility in the Wagoner County,
Oklahoma medical service area. This report briefly describes the process decision makers can
utilize to help determine the demand for an assisted living facility. Specifically, the study will:
1. Determine the service area and population; and
2. Estimate the number of potential participants in the service area.
No recommendations will be made. The information included in this report is designed to assist
local decision-makers in assessing the need and potential for an assisted living facility.
Introduction
The population of the United States continues to age. Those ages 65 and over are making
up a larger percentage of the total population. In 2000, the age group of 65 and over accounted
for 12.4 percent of the total U.S population and 13.2 percent of the state of Oklahoma’s
population. This percentage had increased to 12.6 percent and 13.3 percent respectively,
according to 2008 estimates by the U.S. Census Bureau. This increasing trend is extremely
evident in rural Oklahoma. Rural areas also tend to have higher percentages of populations aged
65 and over. The U.S. Census Bureau estimates for 2008 indicate that those aged 65 and over
account for 9.8 percent of the total population in Wagoner County. This is a slight decrease from
2000 when Wagoner County reported that the 65 and over population accounted for 10.2 percent
of the total population. These numbers are expected to continue to increase as the “Baby
Boomers” reach closer to retirement.
2
With a growing aging population many questions are raised about long-term care options.
In particular, there are many concerns about long-term care options in rural areas. Traditionally,
there have been fewer options for the rural elderly population needing assistance with activities
of daily living (ADLs) such as bathing and dressing. Nursing home care or living with a family
member, when available, were the only options. In more recent years, assisted living facilities
have begun to spread out into rural areas. There are significant differences between assisted
living and nursing home care. The U.S. Department of Health and Human Services describes an
assisted living facility as an alternative housing option for older adults who may need assistance
with dressing, bathing, eating, and toileting, but do not require the intensive medical and nursing
care provided in nursing homes. Therefore, those who need assistance with a few ADLs have
the option of an assisted living facility instead of nursing home care. Services provided in
assisted living facilities may include:
• Three meals a day served in a common dining area;
• Housekeeping services;
• Transportation;
• Assistance with eating, bathing, dressing, toileting, and walking;
• Access to health and medical services
• 24-hour security and staff availability
• Emergency call systems for each resident’s unit;
• Health promotion and exercise programs;
• Medication management;
• Personal laundry services; and
• Social and recreational activities
The percentage of residents needing help with ADLs varies per activity. The National
Center for Assisted Living estimated that 64 percent of residents needed help bathing, 39
3
percent needed assistance dressing, 26 percent needed help toileting, 19 percent needed help
transferring, and 12 percent of residents needed assistance eating. They also concluded that 87
percent of the current residents need assistance with meal preparation, and 81 percent needed
help managing their medications (National Center for Assisted Living, 2009).
Another major difference in assisted living care versus nursing home care is the cost.
Since intensive medical and nursing care is not required for assisted living facilities, there is
often a substantial difference in cost. A survey in 2009 completed by MetLife Mature Market
Institute found that the national average overall cost for a one-bedroom assisted living facility
room was $3,131 per month. This is compared to the national overall average cost of a one
bedroom private room in a nursing facility is $6,661 per month. The average monthly rate per
patient for a private one bedroom assisted living facility room was $2,503 in Oklahoma. This
compares to the average of $3,923.75 per month for nursing home care in Oklahoma.
Much of the funding for one’s stay in an assisted living center largely comes from
personal funds. According to the National Center for Assisted Living, 66.7 percent of the total
funds for assisted living are from personal funds. Medicaid accounted for 9.1 percent of funding
for residents of an assisted living facility. These statistics are represented in Figure 1, along
with other funding sources for assisted living. This heavy reliance on personal funds implies that
lower-income individuals may have a hard time paying for assisted living services.
4
Figure 1. Funding Sources for Residents of Assisted Living Centers
Source: National Center for Assisted Living, Survey 2001
The total number of assisted living facilities in Oklahoma for 2009 reached 121 with 80
located in metropolitan areas, and 41 located in nonmetropolitan areas (Oklahoma State
Department of Health, 2009). There are a total number of 7,312 assisted living facility
beds/rooms statewide. The facility size ranges from 5 beds/rooms up to 166 across the state.
The average number of beds/rooms for assisted living facilities in a nonmetropolitan area is 49,
which is lower than the metropolitan average of 67. This compares to the state average of 60
beds/rooms. Table 1 depicts these results.
Table 1
Number of Assisted Living Facility Beds/Rooms for Oklahoma, Metropolitan Areas, and
Nonmetropolitan Areas
Oklahoma State Department of Health, “Directory of Oklahoma Licensed Long Term Care Facilities,” 2009,
website: www.health.state.ok.us.
Personal Funds
Supplemental
Security Income
Medicaid
Family Assistance
Long Term Care
Insurance
Managed Care
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
66.7%
13.5% 9.1% 8.4%
1.8% 1.5%
Total Average High Low
State 7,312 60 166 5
Metropolitan 4,848 67 166 5
Nonmetropolitan 2,227 49 124 6
5
Medical Service Area
Estimating potential participation for an assisted living center requires defining the
service area for the facility, identifying the population of the service area and calculating the
different age groups within the service area. Figure 2 shows the proposed medical service area
with the surrounding assisted living and nursing facilities according to the latest Oklahoma
Medical Facilities Directory (April, 2009) obtained from the Oklahoma State Department of
Health website. The proposed service area for the Wagoner assisted living facility is derived by
considering the relative travel distances to the alternative facilities. The proposed medical
service area includes all of the zip codes shown in Table 2. Table 2 presents the 2000 census
estimates and 2000 estimates from ESRI (a different data source) for comparison purposes. Zip
code delineations are arbitrary and change frequently resulting in slight differences between the
two estimates. Zip Code data is not available from the U.S. Census for 2009. Therefore,
population from the 2009 ESRI estimates will be utilized in estimating number of participants.
The 2009 ESRI estimated population of the medical service area is 60,462. As is common in this
part of the state, all towns included in the analysis have experienced an increase in population
since the 2000 ESRI estimates. The largest zip code population in the medical service area is
Wagoner with an estimated population of 18,259 for 2009. The population for Coweta is second
with a total count of 14,132. Locust Grove and Inola follow with populations of 6,787 and
6,662, respectively.
6
SOURCE: Oklahoma State Department of Health
County City Facility Type Beds
Cherokee Tahlequah, OK Cherokee County Nursing Care Nursing Home 100
Cherokee Tahlequah, OK Go Ye Village Med-Center Nursing Home 42
Cherokee Tahlequah, OK Grace Living Center- Tahlequah East Nursing Home 125
Cherokee Tahlequah, OK Grave Living Center- Tahlequah Univ. Nursing Home 158
Cherokee Tahlequah, OK Heritage Place Assisted Living Assisted Living 55
Mayes Chouteau, OK Meadowbrook Nursing Center Nursing Home 65
Muskogee Fort Gibson, OK Fort Gibson Nursing Home Nursing Home 66
Muskogee Haskell, OK Haskell Care Center Nursing Home 58
Rogers Inola, OK Inola Health Care Center Nursing Home 65
Wagoner Coweta, OK Coweta Manor Nursing Home Nursing Home 100
Wagoner Wagoner, OK Wagoner Care Center Nursing Home 147
Figure 2. Wagoner Proposed Service Area for Assisted
Living Facility
Denotes Existing Assisted Living Facility Proposed Service Area
Denotes Existing Nursing Home Facility
7
Table 2
Population of Wagoner Service Area
Medical Service Area
Populations
Population by Zip
Code City
2000
Census 2000 ESRI 2009 ESRI
74467 Wagoner 13,780 15,653 18,259
74036 Inola 6,145 5,601 6,662
74337 Chouteau 4,841 4,513 4,626
74352 Locust Grove 6,763 6,682 6,787
74429 Coweta 10,445 11,046 14,132
74441 Hulbert 4,589 5,578 6,344
74454 Porter 2,906 3,079 3,652
Total 49,469 52,152 60,462
% Change from 2000 ESRI 15.6%
SOURCE: U.S. Census Bureau, 2000 Census Data, ESRI 2009 Community Sourcebook of Zip
Code Demographics, 23rd ed., ESRI Business Solutions.
Tables 3 and 4 divide the total service area population by age groups. Table 2 displays
all age groups from 0-19 years of age to 65+. The age group of 65 and over makes up about 12.5
percent of the total population for the service area with a population of 7,557 for 2009. The
largest age group is the 20-44 year range. This group makes up around 33 percent of the total
population.
8
Table 3
Population by Age for Proposed Service Area
SOURCE: U.S. Census Bureau, 2000 Census Data, ESRI 2009 Community Sourcebook of Zip Code
Demographics, 23rd ed., ESRI Business Solutions.
Since potential participation will come from those 65 and above, Table 4 further
describes this population group. The largest percentages of residents 65 and over are aged 65-74
years of age (58 percent). Individuals in this age group may not currently be looking for assisted
living or nursing home care, but may find themselves in need of these services within the next
few years.
Table 4
Population 65 and Over for Proposed Service Area
Age Census 2000 ESRI 2000 % of
Total
ESRI 2009 % of
Total
65-74 3,591 3,786 58.0 4,380 58.0
75-84 2,018 2,127 32.6 2,461 32.6
85+ 587 619 9.5 716 9.5
Total 6,196 6,532 7,557
SOURCE: U.S. Census Bureau, 2000 Census Data, ESRI 2009 Community Sourcebook of Zip Code
Demographics, 23rd ed., ESRI Business Solutions.
Table 5 offers insight into some basic economic indicators for Wagoner County.
According to the Bureau of Economic Analysis for 2007, Wagoner County’s per capita income
Age Census 2000 ESRI 2000 % of
Total
ESRI 2009 % of
Total
0-19 15,023 15,838 30.4 18,353 30.4
20-44 16,236 17,117 32.8 19,859 32.8
45-64 12,014 12,666 24.3 14,693 24.3
65+ 6,196 6,532 12.5 7,557 12.5
Total 49,469 52,152 60,462
9
of $29,237 was lower than the state average of, $34,997. From the U. S. Census Bureau, the
percent of people in poverty in Wagoner County was 11.0 percent in 2008, as compared to 15.7
percent for the state and 13.2 percent nationally. Therefore, the percentage of total people in
poverty in Wagoner County was lower than the state and the nation. The percentage of people
under age 18 in poverty in 2008 followed similar trends, with Wagoner County being lower than
both the state and the nation. Another economic indicator for Wagoner County is the total dollar
amount of transfer payments. Transfer payments represent that portion of total personal income
whose source is state and federal funds. These typically include social security, Medicare, and
retirement / disability payments. Total transfer payments for Wagoner County equal
$324,693,000. Medical payments (such as Medicare or Medicaid) alone total $19,307,000 or
36.7 percent of total transfer payments. This percentage is less than the state percentage (42.4
percent) and the national percentage (44.8 percent). Transfer payments as a percentage of total
personal income is another economic indicator for Wagoner County. In 2007, transfer payments
accounted for a total of 16.5 percent of the total personal income. This percentage is lower than
the state (16.8 percent) but higher than the national percentage of 14.7.
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Table 5
Economic Indicators for Wagoner County,
the State of Oklahoma and the Nation
Indicator County State U.S.
Total Personal Income (2007) $1,962,831,000 $126,272,950,000 $11,634,322,000,000
Per Capita Income (2007) $29,237 $34,997 $38,615
Percentage of People in Poverty (2008) 11.0% 15.7% 13.2%
Percentage of Under 18 in Poverty
(2008) 15.3% 22.0% 18.2%
Transfer Dollars (2007) $324,693,000 $21,218,050,000 $1,712,794,000,000
Medical Benefits Included in
Transfer Dollars (2007) $119,307,000 $8,991,021,000 $767,270,000,000
Medical Benefits as a
Percentage 36.7% 42.4% 44.8%
of Transfer Dollars (2007)
Transfer Dollars as Percentage of 16.5% 16.8% 14.7%
Total Personal Income (2007)
SOURCES: 2009 Bureau of Economic Analysis; 2009 U.S. Census Bureau.
Estimating Participation
Tables 6 and 7 estimate possible participation for an assisted living facility in the
Wagoner Service Area. One factor for estimating the need for assisted living services is the age
of the population utilizing the majority of the services. According to the National Center for
Assisted Living, the average age of residents living in assisted living facilities was 86.9 years.
On average, only 24 percent of the residents are male, and the typical assisted living resident is
an 86 year-old woman who needs assistance with 2 ADLs. For the purpose of this study, the
11
service area population are 65 and over will be utilized. This age group will be divided into two
groups: those between 65-74 and those over 75 years of age.
Adams, Lucas, and Barnes (2008) found that 3.5 percent of individuals aged 65-74 years
have problems with ADLs. The age group of 75 and over had 9.0 percent facing limitations with
ADLs. The rates of 3.5 percent for 65-74 years of age and 9.0 percent for 75 years of age and
over will be used in determining participation.
Another criterion for estimating the need for assisted living is the ability to pay for the
services. Utilization is determined not only by what people want but by what they can afford.
As stated earlier, the average monthly cost for assisted living residents in Oklahoma is $2,503.
As shown in Figure 1, private pay accounts for two-thirds (66.7%) of the total funding for
assisted living those residing in assisted living facilities. For the purposes of this study, the
assumption will be made that those age 65 and over that are also below the 250% poverty line
will not be able to afford assisted living. Therefore, these individuals will be subtracted from the
potential number of participants. The number of available beds/rooms in assisted living or
nursing home facilities within the service area will also be subtracted from the number of
possible participants. Those already residing in an assisted living or nursing home facility were
included in the population estimates, and since they are already residing in one of these options,
they can be eliminated from being a potential patient for the assisted living center currently being
evaluated.
Table 6 displays the results of the possible participation. After adjusting for the
population 65-74 years of age and 75 years of age and over needing assistance with ADLs, the
percentage under the 250% poverty line, and existing long-term care options, there are an
estimated 33 possible participants in the service area.
12
Since Wagoner is located near Tulsa and other larger communities that already provide
nursing home care, four of the previous zip codes were removed. Most of the removed zip codes
already had a nursing home present in their community. The smaller service area includes
Wagoner, Porter, and Hulbert. Table 7 estimates possible participation with the smaller service
area. After adjusting for the population 65-74 years of age and 75 years of age and over needing
assistance with ADLs, the percentage under the 250% poverty line, and existing long-term care
options, there are an estimated 75 possible participants in the new service area.
13
Table 6
Estimating Potential Participation for an Assisted Living Facility, Wagoner, Oklahoma
(Service area depicted in Figure 2)
A. Population Age 65-74 Years the Service Area1 4,380
Population Age 75 Years and over for the Service Area1 3,177
B. Percent of Population Age 65-74 Years Having
Problems with ADLs² 3.5%
Percent of Population Age 75 Years and over Having
Problems with ADLs² 9.0%
C. Total Population 65-74 Years having Problems 153
with ADLs A. x B.
Total Population 75 Years and over having Problems 286
with ADLs A. x B.
Total Service Population 65 and Over having Problems
with ADLs 439
D. Poverty Rate for Over 65 Age Group3 6.7%
E. Estimated Number of Persons 65 Years and Over Having
Problems with ADLs and in poverty 29
C. x D.
F. Estimated Number of Persons 65 Years and Over having
Problems with ADLs LESS those in poverty 410
C. - E.
G. Current Occupancy of Assisted Living Facilities4 0
H. Current Occupancy of Nursing Home Facilities4 377
I. ESTIMATED NUMBER OF POTENTIAL
ASSISTED LIVING FACILITY RESIDENTS 33
F. - (G.+H.)
1 Population from U. S. Census Bureau
2 ADL Limitation percentages: Adams, PF, Lucas, JW, Barnes PM. Summary Health Statistics for the U.S.
Population: National Health Interview Survey, 2006. National Center for Health Statistics. Vital Health Stat
10(236)2008
3 Poverty Rate (250% poverty level) from U.S. Census Bureau, 1999-2001 3-year average for 65 years and over
4 Data obtained at either state or community level
14
Table 7
Estimating Potential Participation for an Assisted Living Facility in, Wagoner,
Oklahoma (Wagoner,74467; Hulbert, 74441; and Porter, 74454)
A. Population Age 65-74 Years the Service Area1 2,372
Population Age 75 Years and over for the Service Area1 1,721
B. Percent of Population Age 65-74 Years Having
Problems with ADLs² 3.5%
Percent of Population Age 75 Years and over Having
Problems with ADLs² 9.0%
C. Total Population 65-74 Years having Problems 83
with ADLs A. x B.
Total Population 75 Years and over having Problems 155
with ADLs A. x B.
Total Service Population 65 and Over having Problems
with ADLs 238
D. Poverty Rate for Over 65 Age Group3 6.7%
E. Estimated Number of Persons 65 Years and Over Having
Problems with ADLs and in poverty 16
C. x D.
F. Estimated Number of Persons 65 Years and Over having
Problems with ADLs LESS those in poverty 222
C. - E.
G. Current Occupancy of Assisted Living Facilities4 0
H. Current Occupancy of Nursing Home Facilities4 147
I. ESTIMATED NUMBER OF POTENTIAL
ASSISTED LIVING FACILITY RESIDENTS 75
F. - (G.+H.)
1 Population from U. S. Census Bureau
2 ADL Limitation percentages: Adams, PF, Lucas, JW, Barnes PM. Summary Health Statistics for the U.S.
Population: National Health Interview Survey, 2006. National Center for Health Statistics. Vital Health Stat
10(236)2008
3 Poverty Rate (250% poverty level) from U.S. Census Bureau, 1999-2001 3-year average for 65 years and over
4 Data obtained at either state or community level
15
Summary
Many assumptions have been made in the preceding analysis. These include items that may
change such as the population of the service area or service area delineation. For example, the
service area depicted here may change due to the exit or entry of assisted living centers or nursing
homes. Should this occur, revised estimates of potential participants and service area should be
made.
An assisted living center can be very costly to start up and staff. Therefore, all assumptions
should be closely examined by local decision-makers to verify that they reflect local conditions.
Local data should be included when available. The next step in this analysis should be to consider
the costs associated with setting up and running an assisted living center. Decision makers can then
determine whether the potential demand and associated revenue outweigh the costs of setting up and
maintaining the facility. If further analysis is needed, please contact the authors on the cover page
or your county extension office listed on the cover page of this document.
16
References
Adams, PF, Lucas, JW, Barnes, PM. Summary of Health Statistics for the U.S. Population:
National Health Interview Survey, 2006 National Center for Health Statistics. Vital Health
Stat 10(236). 2008.
American Association of Retired Persons, “Assisted Living in the United States, Fact Sheet
#62R,” June 2001.
ESRI 2008 Community Sourcebook of Zip Code Demographics, 22nd ed., ESRI Business
Solutions.
MetLife Mature Market Institute. 2009. Market Survey of Long-Term Care Costs: The 2009
MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services and Home
Care Costs. http://www.metlife.com/assets/cao/mmi/publications/studies/ Accessed:
January 2010.
National Center for Assisted Living, “Assisted Living Resident Profile,” 2009, website:
www.ncal.org. Accessed: January 2010.
National Center for Assisted Living, “Survey of Assisted Living Facilities,” 2001, website:
www.ncal.org. Accessed: January 2010.
Oklahoma State Department of Health, “Directory of Oklahoma Licensed Long Term Care
Facilities,” 2009, website: www.health.state.ok.us. Accessed: January 2010
Shelton, R.D., St. Clair, C., Doeksen, G.A., and V. Schott. 2003. A Systems Development Guide
for Rural Assisted Living Facilities. Stillwater, OK: Oklahoma State University.
U.S. Bureau of the Census, 2010, website: www.census.gov. Accessed: January 2010.
U.S. Bureau of Economic Analysis, 2010 website: www.bea.gov.: Accessed: January 2010.
U.S. Department of Health and Human Services, Administration on Aging, Fact Sheet: Assisted
Living. 2009, website: www.aoa.gov. Accessed: March 2009