Retirement Centers Enjoy a Comeback

The retirement-community industry, once on the brink of disaster, is re-establishing itself in the long-term care arena.

Unlike the facilities of the turbulent 1970s, when dozens declared bankruptcy, fought court cases or were driven from existence, today’s breed is more cautious, solvent and regulated.

Community care retirement centers, or CCRCs, which promise everything from regular meal service to partial nursing care, are popping up at a dizzying pace in the South and Southwest. More than 700 communities nationwide serving more than 100,000 elderly have been established.

The CCRC concept has changed little since the turn of the century when religious groups established communities that would guarantee residents a place to live, domestic services and, if necessary, nursing care in exchange for a fee.

Indeed, most CCRCs are run by nonprofit organizations, though few are associated with religious groups. But unlike their predecessors, today’s retirement communities look more like country clubs than hotels. Admission fees at these exclusive estates run from $20,000 to $200,000; monthly charges can run upward of $1,000. And the range of services often includes separate facilities for nursing-home care.

White Collar Retirees

The clientele is more likely to be composed of retired doctors and lawyers than teachers and construction workers.

“There are a substantial number of elderly who can afford this now,” says Sylvia Sherwood, who has conducted surveys on the industry for the government and for various associations. “What people are buying is an elegant life style.”

Sherwood says typical CCRC residents are “middle to upper middle class. They’re in their late 70s or 80s. They look like young elderly, tend to be planners and don’t think they should be dependent on their children. Of course,” she adds, “they can afford to hold that view.”

Sherwood notes that elderly feel more secure joining a CCRC than they did 10 years ago, when poor business practices forced dozens of facilities into bankruptcy, leaving investors and residents empty handed.

At that point, states moved to improve accountability of these pseudo self-sufficient communities. Presently, 29 states have laws that, although they vary widely, are all aimed at protecting the investments of residents who may pile a lifetime of savings into one community.

The laws and regulations typically are enforced by state departments of insurance.

Questions Over Quality

However, experts are concerned that states have not set regulations to assure quality of care. They add that insurance departments are not the appropriate agencies to assess care issues.

Many states have not established rules on the transfer policies of residents from one level of care to another, or the minimum level of services provided.

“There is no regulatory body that looks at quality of care,” says Ann Gillespie, director of the Community Care Accreditation Commission, which began to offer optional licensing of facilities in 1985.

The commission, a quasi-independent body of the private American Association of Homes for the Aging, conducts on-site inspections of communities and evaluates their services, including quality-of-care arrangements.

Many Not Accredited

Fifty-two CCRSs in 16 states have received accreditation. The commission does not divulge the number or names of facilities that fail to meet minimum standards.

“Ultimately, we would like to see full accreditation,” Gillespie says.

The AAHA estimates that in 10 years, as the elderly population spirals upward, the number of communities will double and their client base will reach half a million people.

In fact, the demand for placement in these enclaves is growing so fast that one expert suggested the industry may not be able to meet all the demands of prospective clients.

“The industry is trying to build a sand castle with the waves coming in,” says Lisa R. Stearns of Columbia Law School, who has conducted studies on the industry.

Stearns cites as evidence the fact that many of the 29 states with laws in effect are in the process of updating their statutes or making necessary modifications.

Sherwood says she was concerned that people of modest or low income would be “locked out” of these communities for the foreseeable future.