Assisted Living Industry Analysis

Part
01
of eight
Part
01

Industry Structure: Assisted Living

Assisted living is a sub-segment within the senior housing and nursing care market and accounts only for a quarter (25.6%) of the market. Other segments within the market are independent living, nursing care, and continuing care retirement. The segments primarily differ in the level of independence and health care provided.

Structure and Description of the Senior Housing/ Nursing Care Market

  • The assisted living industry is a segment of the Senior Housing/ Nursing Care Market in the United States.
  • The senior housing/ nursing care market in the United States is valued at $420.4 billion. Majority assisted living communities (communities that are more assisted living by characteristic) represent a quarter (25.6%) of the market. Other revenue segments of the market include majority independent living (18.38%), majority memory care (3.1%), majority nursing care (26.9%), and majority continuing care retirement communities (26%).
  • The distribution of the senior housing/nursing care segments: (36.0%), majority independent living (14.6%), majority nursing care (42.2%), and majority continuing care retirement communities (7.2%).
  • The distribution of the total number of beds: majority assisted living (20.5%), majority independent living (23.2%), majority nursing care (39.7%), and majority continuing care retirement communities (16.6%).
  • The segments within the senior housing/ nursing care market differ based on the level of healthcare and independence provided.
  • There are around 23,500 professionally-managed senior housing and nursing care communities (with 25 or more units/beds) in the United States. This represents 3.04 million professionally managed beds/units.

Independent Living

  • Independent living is housing designed exclusively for seniors. It is aging-adult-friendly as it is easier to navigate and does not require any yard maintenance. Housing can be apartment type or free-standing homes.
  • Independent living facilities have a commercial kitchen, dining room, and common area amenities like recreational centers and clubhouses. Residents have the opportunity to "connect with peers and participate in community activities".
  • The typical services provided include "restaurant-style dining, social activities, weekly housekeeping, laundry, and transportation". Unlike assisted living, it does not provide residents "assistance with bathing, eating, and dressing; medication reminders (no administration of medicine)".
  • The typical resident entry age is 75 to 84 years and the average age is 80.6 years. The average length of stay is 2.1 to 6.4 years and the average monthly rent is $3,216.

Nursing Care

  • Nursing care is assisted living with a higher level of medical care. While assisted living is primarily concerned with helping residents with activities of daily living, nursing care offers "everything from help getting dressed to using the restroom to getting in and out of bed", and daily medical care activities like changing incontinence products and medication management.
  • It is primarily for those who have limited mobility, feel the need to be checked in on frequently, and require medical care on a daily basis. Nursing care facilities have nursing staff and a health clinic.
  • The housing units are like hotel rooms with many rooms having shared occupancy. The average length of stay is 30 days to 2 years and the average rent is $324/day.

Continuing Care Retirement

  • Continuing care retirement communities (CCRCs) are a form of independent living that includes skilled nursing care and assisted living services.
  • Healthy adults can also choose to live in (apartments/ free-standing homes) in such communities. CCRCs allow seniors the option to live within a community for the rest of their lives. Residents tend to stay more comfortable when surrounded by familiar people, spaces, and services.
  • It is an all-in-one facility that offers "health services, meals, personal care, housekeeping, transportation, and emergency help". They tend to be costlier than nursing care communities.

Research Strategy

The overarching market can be defined as part of the long term care industry, which also includes home healthcare. However, as assisted living is essentially housing for seniors with healthcare provisions, the overarching industry has been recognized as the senior housing and nursing care market. Memory care is assisted living with special behavior/memory care and can be considered a sub-segment of assisted living.
Part
02
of eight
Part
02

Industry Analysis: Assisted Living Market Size, Part 1

The senior housing and nursing care market was worth $420.4 billion in 2018 and has a projected growth rate of 9.2% through 2024. Additional details about the market are outlined below.

Senior Housing and Nursing Care Market

  • The overarching market that the assisted living segments sits in is the senior housing and nursing care market, per the previous research findings.
  • In addition to the assisted living segment, the senior and nursing care market includes segments such as memory care, retirement communities and nursing homes.
  • In 2018, the senior and nursing care industry was estimated to be worth $420.4 billion in the U.S.
  • Between 2018 and 2024, the geriatric services the market, which includes the senior housing and nursing care market, is projected to grow at a CAGR of 9.2%. In the absence of information on the projected growth rate specific to senior housing and nursing care, we assume that this industry will grow at about the same rate as the larger geriatric care market in the coming years.
  • Using a CAGR calculator, the current market size (2019) was calculated to be $459.08 million and the expected market size in 5 years (2024) was calculated to be approximately $712.85 million.

Research Strategy

In order to identify the current market size and growth rate for the senior housing and nursing care market, we began by searching sites that typically publish industry insights, such as Market Watch, PR Newswire and Globe Newswire, among others. Using this strategy, we found a report on the U.S. geriatric care market, which is a larger industry that includes senior housing and nursing care. However, we did not find a market report specific to senior housing and nursing care. We continued the search to scan news articles on the industry as these sometimes report on market size and growth. After reviewing news articles on general business news sites like Business Insider and specialized news sites like Senior Housing News, we found several articles that discussed rising rents and other factors that impact market growth, but did not find any reports that gave the needed information on market size or growth. Finally, we reviewed reports published by some major players in the industry in hopes that they included market size and growth. This search returned a report from CBRE that included the size of the senior housing and nursing care market, but not the growth rate. As a result, we concluded that a projected growth rate specific to the senior housing and nursing care market is not publicly available and used the growth rate for the larger geriatric care market as a proxy.
Part
03
of eight
Part
03

Industry Analysis: Assisted Living Market Size, Part 2

In 2018, the US market size segment breakdown for the overarching industry in which the assisted living segment sits (senior housing and nursing care market) was as follows: Majority Nursing Care ($113.09 billion), Continuing Care Retirement Communities ($109.3 billion), Majority Assisted Living ($107.6 billion), Majority Independent Living ($77.23 billion), and Majority Memory Care ($13.03 billion).

Senior Housing and Care Market Segmentation

  • According to our previous research, the overarching industry in which the assisted living market sits is the senior housing and care market.
  • The Senior Housing and Nursing Care market has the following segments:
    • Majority Nursing Care
    • Continuing Care Retirement Communities
    • Majority Assisted Living
    • Majority Independent Living
    • Majority Memory Care
  • The Senior Housing and Nursing Care market was valued at $420.4 billion.
  • Majority Nursing Care accounts for 26.9% of the market, Continuing Care Retirement Communities takes 26.0% of the market, Majority Assisted Living makes up 25.6%, Majority Independent Living accounts for 18.38%, while Majority Memory Care takes the remaining 3.1% of the market.

Market Size of the Segments

  • As of 2018, the market sizes of the different industry segments were as follows:
    • Majority Nursing Care: 26.9% x $420.4 = $113.09 billion.
    • Continuing Care Retirement Communities: 26.0% x $420.4 = $109.3 billion
    • Majority Assisted Living: 25.6% x $420.4 = $107.6 billion
    • Majority Independent Living: 18.38% x $420.4 = $77.3 billion
    • Majority Memory Care: 3.1% x $420.4 = $13.03 billion

Predicted CAGR of the Segments

  • The Senior Housing and Nursing Care market is a segment in the overarching geriatric care services.
  • The geriatric care services market is expected to grow at a CAGR of 9.2% from 2018 to 2024.
  • Since there is limited information on the CAGR specific to the senior housing and nursing care market, of which assisted living is part, we assume that this industry will experience the same growth rate as the overarching industry.
  • Using a VAR calculator, the current (2019) and projected (2024) market size for each of the segments is as follows:
  • Majority Nursing Care: $123.49 billion (2019) and $175.61 billion (2024)
    • Continuing Care Retirement Communities: $119.36 billion (2019) and $169.72 billion (2024)
    • Majority Assisted Living: $117.50 billion (2019) and $167.08 billion (2024)
    • Majority Independent Living: $84.41 billion (2019) and $120.03 billion (2024)
    • Majority Memory Care: $14.23 billion (2019) and $20.23 billion (2024)

Research Strategy:

To provide the US market size of the senior housing and nursing care market segments identified in the previous request, we first scoured through industry databases and research sites such as Markets and Markets, 360 Markets, Market Watch, Globe Newswire. These sources typically publish research insights and reports on various industries, segments, markets, and submarkets. While we were able to find a report from Market Watch that had the market size and CAGR of the larger geriatric care industry, we could not locate any information specific to the assisted living segment or the other segments identified in the previous request.

We then moved on to scan news articles, magazines, and authoritative publications such as the Business Insider, Reuters, Forbes, and industry-specific sources such as and Senior Housing News. These news sources sometimes report on the market sizes and projected growth of industries, such as the assisted living industry. This strategy returned irrelevant hits such as company profiles of senior living companies in the US and factors driving the market growth but nothing specific to the market size or projected CAGR.

Lastly, we consulted the websites and annual reports of the key players in the market. These companies may publish the market size of the market they operate in and the CAGR, as well as their individual market shares. We found one report from CBRE that highlights the market size of the senior housing and nursing care market, as well as the market share of the segments, of which assisted living is part. We used this report to calculate the current market share and the CAGR from the report on the larger geriatric market to calculate a proxy for the CAGR and the projected market size in 2024.
Part
04
of eight
Part
04

Industry Analysis: Assisted Living Management Consulting Spend

The typical spend of assisted living companies on management consulting is not available in the public domain. As this is a niche space and a very small segment of the management consulting industry, there are not enough data points available to triangulate either. Below, we have presented potentially helpful findings pertaining to the industry.

Helpful Findings

  • There are 28,900 assisted living facilities in the United States and the average number of beds in an assisted living community is 33.
  • Among the top 10 senior living companies, Brookdale Senior Living (49,740), Sunrise Senior Living (14,615), and Five Star Senior Living (12,709) have the largest number of assisted living units.
  • Fifty-six percent of assisted living organizations are chains, i.e. they have two or more communities.
  • The assisted living communities are concentrated in the West (40.8%), South (28%), and Midwest (22.6%).
  • Brookdale Senior Living's revenue in 2018 was $4,531,426,000.
  • The assisted living industry in the United States is worth $107.6 billion.
  • The general and administrative spend of the assisted living industry is $5.6 billion.

Research Strategy

In order to fulfill this request, we first searched assisted living and senior living industry portals such as The National Center for Assisted Living (NCAL), Assisted Living Center, Argentum, Leading Age, The American Health Care Association (AHCA), Association for Long Term Care Planning (ALTCP), American Association of Retired Persons (AARP), National Institute on Aging, and NIH (Senior Health). None of these sources provided any information on how much assisted living companies in the United States typically spend on management consulting. Any references made to management consultants were in the context of industry insights provided by them.

Next, we searched the annual reports of five publicly traded assisted living companies in the United States: HCP, Ventas, Ensign Group, and Brookdale Senior Living. The annual reports only provide the general and administrative expenses and do not provide any details pertaining to management consulting fees (a sub-segment of the G&A expense). Following this, we tried to triangulate the average management consulting fee using the following formulas:

Formulae for triangulation:
The average management consulting fee for an assisted living industry company = The market size of the assisted living management consulting industry / the number of assisted living companies
The average management consulting fee for an assisted living industry company = The market size of the assisted living industry * percentage of revenue or general administration expenses that an assisted living company spends on management consulting / the number of assisted living companies

The market size of the senior housing/ nursing care is estimated at $420.4 billion.
The share of assisted living = 25.6%
Therefore, the size of the assisted living industry = $107.6 billion

The general and administrative expenses as a percentage of revenue:
Brookdale Senior Living = $250,495,000/ $4,531,426,000 = 5.5%
Ensign Group = $100,307,000/ $2,040,659,000 = 4.9%

Average G&A expense of an assisted living company = 5.21% ((5.5%+5.23%+4.9%)/3)
Therefore, the G&A expense of the assisted living industry = 5.21% * $107.6 billion = $5.6 billion

(Note: the G&A expenses in annual reports of companies go toward other verticals like independent living and nursing care. The percentage allocation of revenue towards G&A for assisted living has been assumed to be the same as that for the company as a whole)

The size of the assisted living management consulting industry was not available publicly. Reports we found on management consulting do not provide the breakup for the assisted living vertical as it is not a major vertical. The pharma sector, which spends the least among major sectors in management consulting, spent $1.7 billion in 2015 (the size of the pharma industry was $1.5 trillion). It can only be inferred that the assisted living management consulting market size is under $1.7 billion. There were not enough data points to triangulate the required statistic.

Lastly, we searched the websites of senior living or assisted living consultants for the revenues and the number of assisted living clients as it would enable us to triangulate the average amount that assisted living companies spend on management consulting. For this purpose, we searched the websites of companies such as Ashlar Creative Solutions, Capella Living, and Eskaton. The management consultants that are senior living focused are mostly private and offer services other than consulting. If revenue estimates were obtained from third-party sources and the same was used to calculate the average revenue per client, it would still not give an indication of the typical management consulting spend of assisted living companies.
Part
05
of eight
Part
05

Industry Analysis: Assisted Living Key Players, Part 1

Brookdale Senior Living, Five Star Senior Living and Sunrise Senior Living are among the top assisted living companies in the U.S. based on capacity and revenue. Each has more than $1 billion in annual revenue in 2018. The details of these three companies have been included in the attached spreadsheet.

Top Assisted Living Companies

Research Strategy

In order to identify top assisted living companies in the U.S., we looked for industry reports and articles that provided lists of the top companies. We located a list published by senior living trade association Argentum of the top assisted living companies in the U.S. in 2017. The same association has published lists for 2018 and 2019; however, these lists are located behind paywalls and therefore could not be accessed. As a result, we used the 2017 list as it was the most recent list found. The list was ranked based on capacity rather than revenue. However, considering that capacity and revenue are often closely related, we assumed that those companies with this highest capacity also would be among those with the highest revenue. We then search for the revenues of each of the 10 companies on the list. Only three were found to have revenues above $1 billion in 2018. These three companies were included in the list and the details of each were researched to complete the spreadsheet.
Part
06
of eight
Part
06

Industry Analysis: Assisted Living Key Players, Part 2

3 additional companies with revenue more than $1 billion, those are Holiday Retirement, Erickson Living, Senior Lifestyle Corp

Holiday Retirement


Erickson Living


Senior Lifestyle Corp

Research Strategy:

We started the research by looking for top assisted living companies in senior sites, news sites such as seniorhousingnews. There we found top 10 senior living companies that also provide assisted living. From that list, we searched the revenue on each of the companies, and then we found 3 additional companies with revenue more than $1 billion, those are Holiday Retirement, Erickson Living, Senior Lifestyle Corp.

Note: we believe it will be hard to find other additional $1B+ companies for the list because most of the top companies' revenues are in hundreds of millions after exhaustive searching. And according to Assisted Living Key Players, Part 1 the list of the top assisted living is behind a paywall
Part
07
of eight
Part
07

Industry Analysis: Assisted Living Industry Trade Shows

Four of the top trade shows for leaders in the U.S. assisted living industry include the Argentum Senior Living Executive Conference, the Senior Living 100 conference, the AHCA/NCAL Fall CEO Conference, and the Senior Care 360 conference. Details for each event are below.

Argentum Senior Living Executive Conference

  • The Argentum Senior Living Executive Conference is scheduled for May 18-20, 2020 and will be held in Tampa, Florida.
  • This event features technology, solutions, thought leaders, and industry suppliers that help inform and update attendees on the latest developments and trends in the senior living space.
  • There will be hive sessions that are "peer-to-peer facilitated discussion groups on key topics," 15-minute case study presentations on new technology solutions, meet-up spots for impromptu meetings, networking lunches, access to "leading universities in the long term care space," and more.
  • Approximately 2,500 executives from more than 980 companies attend the Argentum conference and expo, 60% of whom are corporate or HQ executives.
  • Attendees represent "for-profit and non-profit assisted living, memory care, independent living, continuing care retirement communities (CCRCs), real estate investment trusts (REITs), private equity, capital providers, industry suppliers, media, and academia."
  • Of the attendees, 90% influence buying decisions and 70% own or operate more than 10 communities.

Senior Living 100

  • The Senior Living 100 conference is scheduled for March 1-4, 2020 and will be held in Amelia Island, Florida.
  • This event is billed as the "premier leadership conference exclusively for C-level executives from large senior living provider organizations."
  • The Executive Program at the conference includes general education sessions, "speed meetings" that connect providers and solutions partners, breakout education sessions, and networking events like galas and recreation times.
  • All Education Program content is "eligible for Qualified Education credits by the American College of Healthcare Executives (ACHE)."
  • Attendance is limited to CEOs, Presidents, CFOs, COOs, Senior VPs, and select VPs. The number of attendees allowed per organization is based on the size of the organization.
  • Examples of attendees from the 2019 conference include executives from Brookdale Senior Living, Sunrise Senior Living, Holiday Retirement, Eclipse Senior Living, and Chartwell Retirement Residences.

American Health Care Association (AHCA) and National Center for Assisted Living (NCAL) Fall CEO Conference

  • The AHCA/NCAL Fall Conference is scheduled for November 12-14, 2019 and will be held in San Diego, California.
  • This conference is geared toward "executive leaders of national and regional multifacilities including owners, chief executive officers, corporate and executive staff, chief financial officers, purchasing officers, and other specified guests as determined by AHCA and NCAL."
  • Sessions on key legislative issues, policies, trends, holistic care plan integration, payment models, multisites, and quality issues are currently scheduled.
  • Education sessions have been approved for continuing education credit.
  • Attendance is restricted to "CEOs and executive level management staff" of senior living facilities.
  • There will also be a spring conference that was held in May 2019, so it will likely be scheduled for the same general time in 2020.

Senior Care 360

Research Strategy

To determine the top trade shows for leaders in the U.S. assisted living industry, we began by searching for national conferences over regional events. Then, we narrowed down the options to those that target CEOs and other executives of senior living facilities and organizations. This led us to four conferences that are both national and exclusive to top executives in the industry.
Part
08
of eight
Part
08

Industry Analysis: Assisted Living Industry Associations

Three of the top industry associations for leaders in the U.S. assisted living industry are the National Center for Assisted Living (NCAL), Argentum, and LeadingAge. Details for these organizations are below.

National Center for Assisted Living

  • The National Center for Assisted Living (NCAL) is the "nation’s largest organization representing long term care."
  • In 2018, NCAL represented 251,108 "beds" in member organizations, but the actual membership number has not been reported.
  • In 2016, the organization represented nearly 3,900 assisted living communities across 43 states.
  • NCAL is the assisted living arm of the American Health Care Association and "assisted living providers continue to be the fastest growing segment of AHCA/NCAL membership."
  • NCAL is "dedicated to serving the needs of the assisted living community through national advocacy, education, networking, professional development, and quality initiatives."
  • On a local level, the organization also creates educational materials and programs, advocates on behalf of assisted living providers, and provides "the direct, ongoing support assisted living members need to improve quality and grow their businesses."

Argentum

  • Argentum is the " leading national trade association serving companies that own, operate, and support professionally managed senior living communities in the United States."
  • This organization provides its members with "insight into and input on important issues facing the industry like emergency preparedness, workforce development, memory care, and elder abuse prevention, and is a resource for national and state advocacy, professional development, training, certification, education, and research."
  • Argentum's membership represents "70% of the largest 140 senior living companies in the U.S." or approximately 19,000 senior living professionals.
  • Featured organization programs include workforce development, professional development, and advocacy.
  • Current Argentum members include Affinity Living Group, Brookdale, Eclipse Senior Living, Insignia Senior Living, Legend Senior Living, Pegasus Senior Living, and numerous others.

LeadingAge

  • LeadingAge is a national association that has the mission of being the "trusted voice for aging."
  • Members of LeadingAge have established a "network of nonprofit leaders committed to supporting, enabling and empowering people to live fully as they age."
  • Provider members of LeadingAge may be "any not-for-profit, voluntary, or government-sponsored organization providing housing or care for the aging," including assisted living facilities and organizations.
  • This association has more than 6,000 members across 38 states.
  • A major function of LeadingAge is "advocating for policies that remove barriers to care, develop new services, improve reimbursement, and make this country a better place to grow old."

Research Strategy

To identify three of the top industry associations for leaders in the U.S. assisted living industry that are the most prominent and attract senior leadership or executives in the industry, we began by identifying national associations as we believed that national organizations would be the most prominent and would attract the most members. This led us to three national associations that cater to assisted living organizations. Although there was no information on attracting senior leadership or executives in the industry published by any association, we had to make the assumption that these three organizations seek to draw in executives based on their planned events and activities. For example, Argentum holds specific events just for senior living CEOs. Therefore, it is our assumption that CEOs make up a significant portion of Argentum's membership. Likewise, NCAL holds an annual conference for independent owners, which would mean they cater to owners and senior executives of senior living organizations. LeadingAge mentions its network of nonprofit leaders, which indicates its membership consists of assisted living leadership, including executives.
Sources
Sources

From Part 03
Quotes
  • "The overarching market that the assisted living segments sits in is the senior housing and nursing care market, per the previous research findings. "
  • "In addition to the assisted living segment, the senior and nursing care market includes segments such as memory care, retirement communities and nursing homes. "
  • "In 2018, the senior and nursing care industry was estimated to be worth $420.4 billion in the U.S. "