[Senate Hearing 107-64]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 107-64

                  ASSISTED LIVING IN THE 21ST CENTURY:
                       EXAMINING ITS ROLE IN THE
                           CONTINUUM OF CARE

=======================================================================

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             APRIL 26, 2001

                               __________

                            Serial No. 107-3

         Printed for the use of the Special Committee on Aging


                    U.S. GOVERNMENT PRINTING OFFICE
73-340 PS                   WASHINGTON : 2001
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
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                               DC. 20402


                       SPECIAL COMMITTEE ON AGING

                      LARRY CRAIG, Idaho, Chairman
JAMES M. JEFFORDS, Vermont           JOHN B. BREAUX, Louisiana
CONRAD BURNS, Montana                HARRY REID, Nevada
RICHARD SHELBY, Alabama              HERB KOHL, Wisconsin
RICK SANTORUM, Pennsylvania          RUSSELL D. FEINGOLD, Wisconsin
SUSAN COLLINS, Maine                 RON WYDEN, Oregon
MIKE ENZI, Wyoming                   EVAN BAYH, Indiana
TIM HUTCHINSON, Arkansas             BLANCHE L. LINCOLN, Arkansas
PETER G. FITZGERALD, Illinois        THOMAS R. CARPER, Delaware
JOHN ENSIGN, Nevada                  DEBBIE STABENOW, Michigan
                                     JEAN CARNAHAN, Missouri
                      Lupe Wissel, Staff Director
                Michelle Easton, Minority Staff Director

                                  (ii)

  


                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening statement of Senator Larry Craig.........................     1
Statement of Senator John Breaux.................................     2
Statement of Senator Jean Carnahan...............................     3
Statement of Senator Ron Wyden...................................     4
Prepared statement of Representative Pete Stark..................     5

                                Panel I

Hon. Hillary Rodman Clinton, a U.S. Senator from New York........     6

                                Panel II

Emelia-Louise Kilby, Ph.D., Assisted Living Resident, Arlington, 
  VA.............................................................    14
Esther Gallow, President and CEO, Booker T. Community Outreach, 
  Inc., Monroe, LA...............................................    20
Bill Southerland, Managing Partner, Bill Southerland's 
  Residential Care Homes, Eagle, ID..............................    26
Karen Love, Executive Director, Consumer Consortium on Assisted 
  Living, Washington, DC.........................................    33
Margaret Thompson, Board of Directors, Assisted Living Federation 
  of America, Washington, DC.....................................    42

                                APPENDIX

Written Statement of Mark Schulte from the American Seniors 
  Housing Association............................................    77
Written Statement of Robert Lohr from The National Center for 
  Assisted Living................................................    84
Additional comments for the Record from Assisted Living 
  Federation of America..........................................    92

                                 (iii)

  

 
    ASSISTED LIVING IN THE 21ST CENTURY: EXAMINING ITS ROLE IN THE 
                           CONTINUUM OF CARE

                              ----------                              --



                        THURSDAY, APRIL 26, 2001

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:06 a.m., in 
room SD-562, Dirksen Senate Office Building, Hon. Larry E. 
Craig (chairman of the committee) presiding.
    Present: Senators Craig, Breaux, Carnahan, and Wyden.

     OPENING STATEMENT OF SENATOR LARRY E. CRAIG, CHAIRMAN

    The Chairman. Good morning, everyone. Thank you for 
attending our Senate Special Committee on Aging hearing this 
morning. I would like to thank our witnesses for agreeing to 
testify before the committee on ``Assisted Living in the 21st 
Century.''
    Two years ago, this committee held a hearing to gain a 
better understanding of the emerging industry of assisted 
living. This emerging industry has now over 30,000 facilities 
in the United States, housing approximately one million 
citizens. Since such large numbers of seniors are choosing 
assisted living facilities, I feel compelled as the new 
chairman of the Special Committee on Aging to take a second 
look at this industry and evaluate efforts to provide quality 
care to consumers.
    Senator Breaux, my ranking colleague here, who has also 
seen this as an important priority, has been involved in this 
and monitored it closely over the last several years. I also 
have a personal reason for wanting to examine this issue. My 
in-laws are currently living in a retirement community with an 
assisted living facility, and I am grateful that they are in a 
good environment receiving quality care. The goal of this 
hearing is to make sure that all residents receive high levels 
of care.
    Two years ago, GAO issued a report to Congress that 
indicated assisted living facilities did not consistently 
provide consumers sufficient information to determine whether a 
particular facility meet their needs. Because of these results, 
this committee has asked the assisted living industry to come 
up with solutions to provide consumers with the best 
information and care possible.
    We are here today to evaluate progress that has been made. 
Currently, assisted living facilities are not regulated at the 
Federal level. Instead, States are responsible for oversight. I 
believe in most cases States should be permitted to govern 
without Federal mandates. In this case, we must ask whether the 
States and the industry are doing enough to protect the elderly 
who rely on assisted living facilities.
    Today, we will hear from both industry and consumer groups 
who will discuss the current status of assisted living 
facilities. I'd like to thank the witnesses for agreeing to 
testify, and I want to especially thank Senator Breaux for his 
interest in this area. As I said, he has been involved with 
this issue and continues to work on addressing its concerns.
    Very early on in this hearing, I am going to need to step 
away to attend another hearing, so I want to also recognize 
Bill Southerland from Eagle, ID, who is on our third panel, who 
is providing assisted living in more rural settings, which I 
think is a uniqueness of the diversity of this kind of a 
facility and caregiving.
    With that, let me turn to our ranking member, Senator John 
Breaux. John.

                STATEMENT OF SENATOR JOHN BREAUX

    Senator Breaux. Good morning, Mr. Chairman, and thank you 
for participating and working with us on this hearing and to 
show the continued interest of the Aging Committee in this 
particular area. It was almost 2 years ago, I think, to this 
month that this committee under Chairman Grassley had a hearing 
on assisted living, and we are continuing the effort to try to 
monitor what is happening in this industry.
    As the 77 million baby boomers out there look forward to 
their golden years, we are trying to make sure that what we do 
as a nation is not just extend the life of our citizens, but 
also improve the quality of their lives, and, of course, 
assisted living facilities is part of that mix. No longer is 
the only option as you grow older a life relegated to a nursing 
home. There are other options now and assisted living 
facilities are one of those options with 33,000 facilities, 
almost 800,000 units.
    This is a growing industry out there, and the question is 
do we just sit back and sort of ignore it or do we help 
participate with this industry and try to provide the quality 
of assisted living that is so important at this particular time 
in the lives of so many of our citizens?
    I think information is important. I think that it is 
unfortunate that in many areas of health care, we find out more 
information about the quality of the toasters and the washing 
machines that we have in society through looking at consumer 
reports and finding out which ones work, which ones don't work, 
how much it costs to fix them, and we give guidance to 
consumers in so many different areas with regard to the quality 
of products that they receive.
    Certainly having the best information on the quality of 
assisted living facilities is extremely important to know which 
ones are good, which ones are not so good, and which ones, in 
fact, do not meet the standards that we all want to have in 
this country.
    It is interesting that about 38 States, I think, now are 
operating with waivers to use the Medicaid program, which is a 
Federal-state partnership, to help pay for this. This is an 
extremely expensive product. And I really think it is incumbent 
for us in Congress not just to look at how they are being run, 
but also try to find ways in which we can help in providing 
financial assistance to cover the very expensive costs at 
assisted living facilities as well as what nursing homes charge 
for their services, which are very valuable services and also 
very expensive services.
    So we are delighted that we got a good group, delighted 
that Senator Clinton is our lead-off witness and will talk 
about the New York experience and their involvement in this 
area. And I look forward to this hearing.
    The Chairman. John, thank you very much. Now let me turn to 
Senator Jean Carnahan.

               STATEMENT OF SENATOR JEAN CARNAHAN

    Senator Carnahan. Thank you, Mr. Chairman. I want to thank 
Senator Breaux, too, for calling this hearing on assisted 
living and its role in continuum of care. Senator Breaux called 
for the first hearing on this subject some 2 years ago. And he 
has remained a strong champion of senior citizens ever since, 
and I commend him for that.
    Caring for our loved ones as they grow older is an issue 
that hits close to home for many in Missouri. A few years ago, 
I cared for my father in my home, the last 7\1/2\ years of his 
life, and so I understand how important it is that our senior 
citizens have the care and the dignity and even the love that 
they deserve in their later years.
    I believe we have a moral obligation to empower our senior 
citizens to keep their independence and their dignity as they 
age. It is the wish we all have for our own parents and for 
them to live in an environment where they can maintain a high 
quality of life for as long as possible.
    I look forward to the opportunity to examine long-term care 
options to allow seniors to accomplish this goal. Assisted 
living is one of those options. Assisted living strikes a 
balance. They offer independent living with some support 
services. Assisted living is a growing phenomenon. To date, 
there are more than 100 such facilities in Missouri alone, and 
although I see assisted living as a positive long-term care 
option for seniors, I am troubled by recent news reports about 
the lack of oversight of assisted living centers.
    What concerns me most is that the health and safety of some 
assisted living residents may be at risk. When someone puts a 
family member in an assisted living center, they should know 
with confidence that their loved ones will be cared for. The 
importance of this issue will only increase as our country's 
population ages, and with assisted living becoming more and 
more prevalent, now is the time to ask ourselves whether we are 
doing everything possible to ensure quality care.
    I am pleased that this committee is calling attention to 
assisted living in this country today, and I hope the committee 
will continue to monitor the quality of care that residents 
receive in these centers. We owe our loved ones no less. Thank 
you.
    The Chairman. Senator, thank you very much. Now, let me 
turn to Senator Ron Wyden of Oregon. Ron, in his private life 
before he came to Congress was actively involved with seniors 
and has remained certainly a stalwart spokesperson for them 
while he has served both in the House and the Senate. Ron.

                 STATEMENT OF SENATOR RON WYDEN

    Senator Wyden. Thank you, Mr. Chairman. After 20 years of 
friendship with you, it is very good to see you chairing this 
committee and working with Senator Breaux, who has done so much 
work in this area. I appreciate both of you convening this 
hearing.
    I have had an interest in this subject, as you mentioned, 
Mr. Chairman, since my days as co-director of the Gray 
Panthers. It was over 3 years ago when Senator Breaux and I 
along with Senator Grassley asked for the first set of 
definitions about what assisted living was in this country. 
What we found is that in some States, assisted living is sort 
of a sponge bath. It is very modest health care by any 
analysis, and in other States it is extraordinarily 
sophisticated health care.
    When I was visiting my mother in her assisted living 
facility this weekend, I thought about how far we have come on 
a bipartisan basis in this committee over the last 3 years. We 
now have seen the industry, for example, set up a web site and 
consumer protection checklists, a variety of steps that can 
assist families. I think it is very appropriate that we look 
today at what the next steps ought to be, and that is why it is 
so good to have our friend and colleague, Senator Clinton, here 
because New York, of course, as in so many areas, has been on 
the front lines in terms of looking at new approaches.
    I would like to ask, Mr. Chairman and colleagues, that we 
think about two particular areas this morning. One is I think 
that it is time to look at a model state statute in order to 
try to lay out a set of baseline consumer protections for older 
people and at the same time encourage the kind of flexibility 
that the industry needs in order to be creative and innovative.
    I do not think we need to set up some sort of one-size-
fits-all Federal program. What I am talking about is not all 
that different, with some of the steps that we have taken in 
areas like Medigap, where there has been a modest Federal role, 
but insurers have worked with the States and the insurance area 
with the National Association of Insurance Commissioners. Here 
it would be with the health departments, the consumer 
advocates, and industry. I think it is time for us to look, and 
it is again an ideal opportunity for bipartisanship, with the 
idea of a model state statute for assisted living so we deal 
with this crazy quilt of statutes around the country. I look 
forward to examining that issue.
    The other area that I would hope that we would look at is 
that we have a dire shortage of qualified workers to do the 
critical services for older people in these facilities. By the 
way, I think we all understand we have got a dire shortage of 
qualified workers across the board in the health care area. My 
sense is it is particularly acute in the assisted living 
facility, and I hope that we could examine that issue as well.
    As Senator Carnahan has said, and she has had a family 
experience with Assisted Living, three of the four of us so far 
have touched on our family experience, and Senator Breaux, of 
course, is a long-time expert in this field. So I think it is 
clear that we can go at this issue as we have done on so many 
in a bipartisan way. I look forward to working with you, Mr. 
Chairman, Senator Breaux and Senator Carnahan to do that.
    The Chairman. Ron, thank you for expression of your 
thoughts and ideas in this area. I would also like to make part 
of the record a written statement from Pete Stark, a 
congressman from the State of California.
    [The prepared statement of Mr. Stark follows:]

                      Testimony of Rep. Pete Stark

    I am pleased to participate in today's hearing on how 
assisted living fits into the continuum of care for senior 
citizens. More and more seniors are choosing to live in 
assisted living facilities (ALFs). Until something happens to a 
loved one, however, few people recognize that there are no 
national quality standards for these facilities. In fact, 
regulation varies widely from state-to-state with some States 
having virtually no regulation at all.
    Furthermore, although originally developed as an 
alternative to nursing homes, recent news coverage by the 
Washington Post, New York Times, and Wall Street Journal points 
toward a growing industry trend to recruit the same frail 
seniors that might otherwise be served by nursing homes. The 
simple truth is that frail elderly have significant medical 
needs no matter where they live.
    Until recently, the industry has been almost entirely 
private-pay. But times are changing and ALFs increasingly seek 
and receive federal funding through Medicaid's Home and 
Community-Based Services waiver. In fact, overall spending for 
this waiver swelled 29 percent between 1988-1999, due in part 
to growing numbers of ALF placements.
    In many States, industry expansion has not been accompanied 
by a tightening of quality standards or accountability 
measures. Instead, the definition and philosophy across ALFs 
varies from state-to-state and there is little consistency in 
state regulatory efforts. Furthermore, a 1999 General 
Accounting Office report found that 25 percent of surveyed 
facilities were cited for five or more quality of care 
violations between 1996-1997 and 11 percent were cited for 10 
or more problems. Frequently cited problems ranged from 
providing inadequate care, particularly around medication 
issues, to having insufficient and unqualified staff.
    I believe that it is our responsibility to take action 
before widespread problems are reported. For that reason, I 
recently took the first step of introducing H.J. Res. 13. This 
resolution calls for a White House conference to pull together 
consumers, industry, State officials, and other interested 
parties in order to develop consensus around quality standards 
for ALFs. It has been endorsed by several organization active 
in protecting consumer interests in assisted living and other 
settings, including the Consumer Consortium on Assisted Living, 
American Medical Directors Association, California Advocates 
for Nursing Home Reform, National Association for HomeCare, and 
Elder Care America.
    Beyond H.J. Res. 13, I am actively exploring other 
legislative solutions to quality concerns within the assisted 
living industry. ALFs that receive federal funding should be 
required to meet reasonable, commonsense quality standards to 
protect residents. Frail, elderly ALF residents must be 
protected and sub-par facilities must face real consequences. I 
look forward to working with my colleagues on both sides of the 
aisle to protect frail seniors in ALFs throughout our country.
    Thank you for holding a hearing on this important topic.

    The Chairman. Now, we have the opportunity to hear from 
Senator Clinton, who is with us today to talk about the New 
York experience on assisted living. I am sure you are all aware 
that earlier this year, The New York Times released an article 
on assisted living, and undoubtedly the senator, I'm sure, has 
heard from a good many of her constituents on the issues that 
were raised in the article.
    So we are pleased you are with us this morning to share 
your experience and the experience of your constituents as it 
relates to assisted living in New York. Welcome to the 
committee.

          STATEMENT OF SENATOR HILLARY RODHAM CLINTON

    Senator Clinton. Thank you so much, Mr. Chairman. I am very 
pleased to be here, and I thank you and I thank Senator Breaux 
as well as Senators Carnahan and Wyden for holding this very 
important hearing and building on the work that you began 2 
years ago. It is very encouraging to see how we are looking at 
a problem ahead of the curve, because although there are lots 
of issues to be raised, I think this is one that we can address 
in a bipartisan way, as Senator Wyden has just pointed out, and 
do some very constructive work, but as we all know, that is 
work that needs to be undertaken in an expeditious manner 
because we have to begin planning for the continuing needs of 
our seniors.
    Now, I want at the very beginning to say I am not an 
expert. You will have some excellent witnesses today who are 
experts in this area, who have been on the front lines of 
providing the care that is needed and have been the recipients 
of such care.
    But I have heard, as the chairman just referred to, from 
many New Yorkers about their experiences with assisted living 
facilities and with some of the questions that they have 
because New York has made some very important efforts in trying 
to deal with and define assisted living programs. So perhaps 
our experiences will be helpful to the committee and to the 
rest of the country.
    The popularity of assisted living speaks to the autonomy 
and homelike setting that it can offer, which is, you know, 
very welcoming to many of our seniors and particularly to the 
growing population of frail elderly who need some assistance 
with the activities of daily living but may not need the level 
of care provided in a nursing home.
    According to the New York State Department of Health in a 
recent report, 10 to 15 percent of the 114,000 nursing home 
residents in our State could probably live more independently 
and sometimes less expensively in assisted living facilities. 
But as we have heard from newspaper reports, assisted living is 
governed by a myriad of different state-based regulations, 
often with multiple regulatory frameworks coexisting uneasily 
even within a single State.
    Now, New York's experience really highlights what happens 
when an emerging long-term care option like assisted living 
outgrows the patchwork regulatory structure that has evolved 
over time, and I would very much endorse Senator Wyden's 
proposal for a model statute. I think that could be an 
extraordinarily helpful development.
    In New York, for example, there are at least, and I say at 
least because we are not quite sure, but we think there are at 
least three different kinds of assisted living programs in New 
York. Now, to the consumer, each of these types of facilities 
can look remarkably similar, offering housing with personal 
care services and the ability to provide a range for nursing 
services and home health care.
    And yet consumers are often now aware that these facilities 
are held to very different standards, which is the point 
Senator Breaux made. But one thing we have to do is provide 
information in usable form to consumers.
    In the first category, we think adult care facilities. Now 
they represent the modern-day evolution of the traditional 
board and care homes which combine residential settings with 
supportive services.
    The second category is called assisted living programs, 
through which the State gives special certification to roughly 
4,000 beds to help make assisted living affordable for those 
who are eligible for Medicaid and SSI.
    New York sets a number of standards for both of these first 
two categories on subjects ranging from services provided to 
staff training.
    Now, however, in New York as in many other States, there is 
also a third category of facilities. They are called assisted 
living, ``look alikes'' or, ``non-licensed'' assisted living. 
These facilities offer housing and may either own or contract 
with a separately licensed home health care agency. However, 
they do not have a license to offer the two together in an 
assisted living arrangement.
    Now, if you are confused already, so are many consumers in 
New York, because trying to sort out the adult care facilities, 
the so-called ACFs, from the assisted living programs from the 
non-licensed look-alike assisted living programs causes a lot 
of confusion. And it is not anyone's, you know, fault. It is 
just that this is how this has developed and evolved over time, 
which is why this hearing is so important.
    The category of so-called ``non-licensed assisted living'' 
is an interesting example of how state specific issues affect 
assisted living consumers. Now, New York has historically held 
licensed health care facilities such as hospitals, nursing 
homes and adult care facilities accountable for quote 
``character and competence.'' As a result, our State has a 
long-standing prohibition preventing publicly traded business 
corporations from operating licensed health care facilities. 
Now, that means that some of the larger assisted living chains, 
which are often subject to licensing in other States, operate 
under this unlicensed category in New York.
    Now, that is something that has caused a lot of confusion 
among consumers and even among some of the businesses, you 
know, because they are used to operating under licensing 
standards in one State, then they come to New York, and they 
are no longer under licensing standards, which is why having 
some kind of national model statute which sets a framework, 
which, you know, all of the good, competent facilities will 
want to abide by, will be a great first step to sort out this 
confusion.
    Now, we know that many of the providers in New York of all 
of these different kinds of facilities offer very good 
environments for our older citizens who appreciate the greater 
independence and the individually tailored care. But consumers 
have no guarantee of that and no easy way to compare 
facilities. So they have to operate basically blindly when it 
comes to making a decision and that falls usually on family 
members themselves who are trying to help with determining what 
is best for their loved ones.
    Now, a story I heard recently illustrates this point. A 
daughter came to New York to select what she thought was the 
best assisted living facility to care for her mother who has 
dementia and heart problems. The agency was an unlicensed 
facility with a licensed home care agency that it owned onsite. 
But the daughter was not aware of the implications of that 
confusing licensing structure until it was too late.
    At the beginning she instructed the facility that her 
mother would get agitated and not take her heart medications 
unless they were crushed. You know sometimes older people have 
difficulty swallowing; trying to get the pills down is a 
problem, so, you know, it is a rather common occurrence to 
crush that medication. Yet within a mere 6 weeks, the mother 
was hospitalized with a diagnosis of rapid atrial fibrillation 
and sadly she died.
    Later, the daughter found out that her mother had missed 
one of her medications 15 times and another one five times. 
Interviews with the nurse from the home care agency revealed 
that the woman was agitated and did not cooperate with taking 
her medications. There was no record whether or not they had 
crushed the medications. And so although the daughter had 
clearly instructed the facility about this need for her mother, 
she did not anticipate she might have to also separately 
instruct the home care agency as well.
    In the end, the home care agency was fined $3,000, but the 
daughter was shocked to learn that the facility itself was not 
cited for this oversight, because the State lacks oversight 
over the facility as a service provider. This is a typical 
example of how when you have a licensed situation and an 
unlicensed situation, and unclear differences as to what is 
expected by consumers, tragedy can sometimes ensure.
    For those of us who would like to make the experience of 
assisted living available to the many people who could benefit 
from its advantages over nursing home care, stories like this 
raise important questions. And I think this committee already 
knows that we have to provide answers to these questions:
    Do consumers receive enough information to make wise 
choices? I think we all understand that we don't. What 
assurances do consumers have that the care will be adequate? 
That is where a model statute/more information can make a very 
big difference. Does the licensing and oversight structure as 
it currently exists in States exacerbate an already difficult 
decision? And ultimately how can we assure access to quality 
assisted living facilities at an affordable price?
    I would also echo another point that Senator Wyden made, 
and that is our worker shortage in health care in general--I 
serve on the Health Committee. A subcommittee has recently held 
a hearing on our nursing shortage. We know that that is 
becoming a very serious problem. Well, the shortage of workers 
in our assisted living programs, our adult care facilities, and 
our nursing homes is reaching an acute stage of crisis. And it 
is not even so much as the lack of workers and the expense of 
training them and keeping them, because we know that the 
compensation is often very low, it is also creating that extra 
sense of care and love that Senator Carnahan referred to.
    I spoke recently with the directors of some of our adult 
facilities in New York, and they said that they want to make 
sure that the emotional component is present, and they are 
having a hard enough time just finding the bodies to do the 
work. And then you layer that with the need to find people who 
will care for our elderly, which is what everyone of us hope 
for. They have gone so far in some instances to suggest that 
maybe we should have an option for facilities and for States to 
provide a requirement that there be video cameras in the rooms 
of our elderly so that families could monitor from their own 
homes what is happening because we do not have the staff on 
hand to take account of it.
    I would hate to see us move toward that, but there are a 
lot of worried families who don't know what it is they are 
buying, don't know whether they have got the right information 
to make a good decision, and perhaps there is something even as 
extreme as that sort of monitoring that would have to be 
considered as an interim measure until we take appropriate 
steps.
    Now, as the AARP has said, and I could not agree more, 
there should be no confusion about what is considered assisted 
living and what it can and cannot offer older New Yorkers. I 
would only amend by saying that should cover older Americans 
everywhere, and I thank you for calling this hearing about an 
issue that is important today, but will only grow in importance 
in the next years, and I appreciate the opportunity to testify 
before you today.
    [The prepared statement of Senator Clinton follows:]

          Prepared Statement of Senator Hillary Rodman Clinton

    Thank you so much Mr. Chairman and Senator Breaux. I am so 
pleased to be invited here today to talk with you very briefly 
about assisted living. I'm not an expert--you have some 
excellent witnesses today who are--but I have heard from people 
in New York about their experiences with assisted living 
facilities and I'm pleased to have this opportunity to share 
some of their views and concerns with you.
    The popularity of assisted living speaks to the autonomy 
and home-like setting it can offer to the growing population of 
frail elderly who need some assistance with the activities of 
daily living, but may not need the level of care provided in a 
nursing home. According to a New York State Department of 
Health report, 10 to 15 percent of the 114,000 nursing home 
residents in New York could probably live more independently--
and sometimes less expensively--in assisted living facilities.
    As we have all heard from newspapers and from our States, 
assisted living is governed by a myriad of different state-
based regulations, often with multiple regulatory frameworks 
coexisting uneasily even within a single State. And New York's 
experience really highlights what happens when an emerging 
long-term care option outgrows the patchwork regulatory 
structure that has evolved over time.
    There are at least three different kinds of assisted living 
in New York. To the consumer, each of these types of facilities 
can look remarkably similar, offering housing with personal 
care services, and the ability to provide or arrange for 
nursing services and home health care. And yet, consumers are 
not aware that these facilities are held to widely different 
standards.
    In the first category we see adult care facilities. They 
represent the modern day evolution of the traditional board-
and-care homes, which combine residential setting with 
supportive services. The second category is called the Assisted 
Living Program, through which the State gives special 
certification to roughly 4,000 beds to help make assisted 
living affordable for those who are eligible for Medicaid and 
SSI. New York sets a number of standards for both of these 
first two categories on subjects ranging from services provided 
to staff training.
    However, in New York, there is also a third category of 
facilities. They are called assisted living ``look-a-likes,'' a 
``non-licensed'' assisted living. These facilities are licensed 
to offer housing and may either own or contract with a 
separately licensed home health care agency. However, they do 
not have a license to offer the two together in an ``assisted 
living'' arrangement.
    In fact, this category of so-called non-licensed assisted 
living is an interesting example of how state-specific issues 
affect assisted living consumers. New York has historically 
held licensed health care facilities, such as hospitals, 
nursing homes and adult care facilities, accountable for 
``character and competence.'' As a result our State has a long-
standing prohibition preventing publicly-traded business 
corporations from operating licensed health care facilities. 
Thus some of the larger assisted living chains, which are often 
subject to licensing in other States, operate under this 
unlicensed category in New York.
    If what I have just described sounds confusing . . . it is. 
And imagine how difficult it is for families to navigate this 
complex terrain and decide what kind of facility is best for 
their family members.
    Certainly, many of the providers in New York offer 
wonderful living environments for our older citizens, who 
appreciate the greater independence and the individually-
tailored care. But consumers have no guarantee of that, and no 
easy way to compare different facilities. In short, they have 
to operate on a good deal of faith. But when it comes to 
protecting our elderly family members, I don't think that kind 
of ``faith-based program is what families need.
    One story I heard recently illustrates this point. A 
daughter came to New York to select what she thought was the 
best assisted living facility to care for her mother who had 
dementia and heart problems. The agency was an unlicensed 
facility with a licensed home care agency that it owns on site, 
but the daughter was not aware of the implications of that 
licensing structure until it was too late. At the beginning, 
she instructed the facility that her mother would get agitated 
and not take her medications unless they were crushed.
    Yet, within a mere 6 weeks, the mother was hospitalized 
with a diagnosis of rapid atrial fibrillation, and, sadly, she 
died. Later the daughter found out that her mother missed one 
of her medications 15 times and another one 5 times. Interviews 
with the nurse from the home care agency revealed that the 
woman was agitated and did not cooperate with taking her 
medications. But there was no mention of whether they had 
crushed the medication or not.
    The daughter had clearly instructed the facility about her 
mother's medications, but did not anticipate that she might 
have to separately instruct the home care agency as well. In 
the end the home care agency was fined $3000, but the daughter 
was shocked to learn that the facility itself was not cited, 
because the State lacks oversight over the facility as a 
service provider.
    For those of us who would like to make the experience of 
assisted living available to the many people who could benefit 
from its advantages over nursing home care, stories like this 
raise important questions. Do consumers receive enough 
information to make wise choices? What assurances do consumers 
have that the care will be adequate? Does the licensing and 
oversight structure exacerbate an already difficult decision? 
And, ultimately, how can we assure access to quality assisted 
living facilities at an affordable price?
    I applaud those in my State who have and will continue to 
work hard on addressing these fundamental, but difficult 
questions.
    As the AARP has said, and I couldn't agree more: ``There 
should be no confusion about what is considered assisted living 
and what it can and cannot offer older New Yorkers.''
    Thank you so much for calling this hearing so that the 
expert witnesses here today can help lend insight to the 
questions that many of my constituents, along with many of 
yours, are asking.

    The Chairman. Senator, thank you. You have obviously 
related to us some of the experiences that you have heard about 
and the frustrations that New York is going through and its 
citizens are going through.
    Two years ago, Governor Pataki recommended consumer 
protection for residents of assisted living facilities within 
the State, but I am told these proposals didn't make it into 
law. How is New York now working to give clarity and direction 
to the very frustration you spoke to?
    Senator Clinton. Well, Senator Craig, I commend our 
Governor who came forward with consumer protections, additional 
disclosure and information provisions, but I think that the 
fact is that in the absence of a broader awareness of what the 
Governor was attempting to accomplish, there were a lot of 
questions raised, and a lot of confusion about what should or 
shouldn't be covered and who should or shouldn't be licensed, 
and New York does have this traditional provision which I think 
is causing us some challenges, and that is that publicly traded 
companies cannot offer these services in our State under a 
license.
    That doesn't mean they can't do business, but it just means 
the State can't license them. In effect, the State historically 
has not wanted to give the seal of approval to a publicly 
traded for-profit company offering such programs, and of course 
we have them in New York, but they are not under aegis of the 
State.
    So we have some particular issues we have to deal with, but 
the Governor was on the right track, and I am hoping that in a 
bipartisan way in our State bringing together the interested 
parties, the Governors' proposals, and others who have worked 
on this will come together, and we will be able to come up with 
some of the statutory changes that would address the disclosure 
issues, the information issues, some of the licensing issues.
    But I think we would be greatly aided by the kind of model 
statute and the work that could be done here out of this 
committee.
    The Chairman. Well, thank you very much. I am going to turn 
to our ranking member. I am also going to hand him the gavel. I 
will need to step out.
    Senator Clinton. That is dangerous, Mr. Chairman, you know. 
[Laughter.]
    The Chairman. All I can say is don't you wish? [Laughter.]
    Only for the day. Only for the day, John Breaux. Only for 
the day.
    Senator Breaux. Time will cure everything.
    The Chairman. Oh, it will. Again, thank you.
    Senator Breaux. [presiding.] Let me thank also the 
chairman, but also thank Senator Clinton. I think that you 
point out something that is confusing to you and it is 
confusing to us. You can imagine how confusing it is to the 
average citizen who is sometimes desperately looking for some 
facility to take care of a mother or a father or a relative. As 
to whether it is a licensed facility, whether it is not, you 
really can't tell.
    I am wondering--and Senator Wyden spoke to this, the 
difficulty that New York is having in licensing these 
facilities I am sure is repeated in almost every other State--
if there is not some Federal role that we can do without being 
too intrusive to set up some national standards and national 
guidelines and somehow encourage the States to have a unified 
system throughout the system? You know, if we have 50 different 
sets of rules and regulations for assisted living facilities, 
it seems like we are not really solving the problem. Do you 
think that is something we can pursue here?
    Senator Clinton. Well, I would certainly encourage you to 
do that, senator, because one of the underlying issues here is 
that because we are a very mobile country, oftentimes parents 
and children live in different States. You know, as I referred 
to in the example I gave, a daughter came from out of State, 
her mother did not want to leave New York, and so her mother 
wanted to stay there, the daughter came to try to make 
arrangements. The rules are different from state to state, and 
it is a patchwork, and so I think anything we can do to set 
some kind of model statute, maybe to set some national 
standards and some additional recommended voluntary provisions 
to encourage all of the players to come to the table, I think 
from my discussions with the providers in New York, they would 
welcome that, because, you know, the ones who are doing a good 
job, they want to be recognized for the good job they are doing 
and they deserve to be.
    They want to be separated out from, you know, those few bad 
apples that don't do what should be done in taking care of our 
seniors. So anything we could do to set up a framework that 
would enable that to occur, I would be very much in favor of.
    Senator Breaux. That is an excellent point. Thank you very 
much for being with us. Senator Carnahan, any questions?
    Senator Carnahan. No.
    Senator Breaux. And Senator Wyden.
    Senator Wyden. Thank you, Senator Breaux and Senator 
Clinton. Excellent presentation and you know one of the reasons 
that I argued for it now being the time to look at a model 
state statute is what you have experienced in New York. I think 
it is sort of a microcosm of this crazy quilt that we are 
seeing around the country that GAO told us about more than 3 
years ago when they gave us this sort of report on the 
hodgepodge of definitions. I thank you for an excellent 
presentation.
    I hope that this committee, on a bipartisan basis, will 
with Senator Breaux and Chairman Craig, pull together an effort 
to look at a model state statute involving consumer groups, 
State regulators, the industry, and we would very much like to 
have you involved in that issue.
    Let me ask you about one other question--and I think New 
York may have a unique ability to contribute. We all know we 
are having this demographic tsunami in this country with so 
many older people. New York has a very high percentage of 
seniors already, and I have noted over the years in my work 
with Gray Panther advocates up there that you have a lot of low 
income senior citizens.
    Senator Clinton. Right.
    Senator Wyden. There has been a debate among senior 
advocates with respect to how to integrate low income seniors 
into the assisted living model. There has been discussion by 
both the advocates and the industry of using essentially the 
housing arm of the government, the various housing programs, in 
order to stimulate some additional services for low income 
seniors. Has New York looked at that? And if so, I gather you 
could conceivably involve State housing programs, HUD, 
conceivably even some of the government, you know, backed-up 
programs. I would be interested in what New York has found with 
respect to housing and low income older people.
    Senator Clinton. Well, senator, I think that you have put 
your finger on one of the potential areas for exploration in 
the next few years. We do do some of that in New York. Other 
States do as well. Trying to provide supplemental housing for 
low income seniors, but we have by no means done enough nor 
have we come up with a kind of a priority list of how we 
proceed to provide affordable housing as people get older.
    You know this is not an issue that is on the front page of 
the newspaper, but everywhere I go in New York from western New 
York where the aging of the population is particularly acute, 
because we have lost too many of our young people so our aged 
citizens are disproportionate in the population, to Long 
Island, which is thriving economically and can't figure out how 
it is going to afford to keep their elderly and their young 
people on the island because affordable housing is so scarce.
    We need a housing policy in our country, as you know so 
well, and one of the elements of it should be low income 
affordable housing for seniors, and anything we can do to try 
to bring that into the debate, I would certainly favor, and I 
would be happy to have my staff, working with your staff, put 
together the range of options that we do in New York so that 
you can see what is available. I am not so sure it is different 
from other places, but I think we perhaps have more State money 
and maybe in some areas more local money and even some private-
public partnerships that we are trying to develop.
    But I am very pleased you raised that because when you look 
at the reimbursement level, even in New York where the cost of 
living is high, yet the State has made a great effort over the 
years to provide additional funding for our seniors--you know, 
we have got under assisted living the permission to use 
combined Medicaid-SSI financing at roughly $94 a day--that does 
not go very far if you have got somebody in an unstable medical 
condition, chronically bedfast or chair-fast, or who requires 
two people lifting, and equipment, you know, but at least we 
are making that effort.
    And so we have got to bring more resources in, and I think 
the housing sector, both the public and the private, could make 
a real contribution.
    Senator Wyden. Thank you for a very good presentation.
    Senator Breaux. One of our witnesses, I would point out, a 
lady from Louisiana, is going to talk about using HUD funding 
to build assisted living. That will be really interesting.
    Senator Clinton. Good.
    Senator Breaux. Senator Clinton, thank you so very much.
    Senator Clinton. Thank you.
    Senator Breaux. Delighted to have you.
    Senator Clinton. Thank you very much.
    Senator Breaux. Let us welcome up our next witnesses, and 
what I would like to do is to bring them all up, and we will 
have them at one panel rather than divided up, and we would 
like to welcome Dr. Emelia-Louise Kilby from Arlington, VA, and 
Ms. Esther Gallow from Monroe, LA; Mr. Bill Southerland who is 
managing partner of the Southerland Residential Care Homes; Ms. 
Karen Love from Falls Church, VA; and Ms. Margaret Thompson. I 
think we can fit in all the panel at the table.
    Our first witness will be Dr. Kilby. We are delighted to 
have you. I understand you have been living in an assisted 
living facility for some time. And we are delighted to have 
your comments.

   STATEMENT OF EMELIA-LOUISE KILBY, PH.D., ASSISTED LIVING 
                    RESIDENT, ARLINGTON, VA

    Ms. Kilby. Thank you. Senator Breaux and members of the 
committee, I am called Lou Kilby. I am a resident of an 
assisted living facility. It is my pleasure to testify today 
and provide a resident-centered perspective of what it is like 
to live in assisted living.
    I am a paraplegic and assisted living has been an ideal 
solution to my problems. I had not expected to spend my golden 
years in a wheelchair without long-term care insurance. In 
assisted living, I have had a chance to be fairly independent, 
to be up and about most of the day, to order and take my own 
medications, and to continue in a leadership capacity serving 
on committees. A worrisome thing for me is that costs go up 
yearly and I fear that I will outlive my money.
    Most of the 50 residents live in private apartments, 
complete with their own bathroom, shower and small 
refrigerator. Despite the positive aspects of an attractive 
home, the environment tends to be depressing with some 
residents unable to communicate, uninterested in taking part in 
activities, and sleeping much of the day in the common areas.
    It is sad, too, when a resident dies or leaves for a 
nursing home for more care. The activity program is outstanding 
with various opportunities for the active-minded resident. The 
program has consistently been an important part of my life and 
was of great help in my transition from independence to 
assisted living.
    More effort could be made by the staff to encourage 
attendance of the 30 assisted living residents. Barely a third 
participate regularly in any activity. I am pleased to say that 
a number of residents regularly report for morning stretch, 
which I lead. My star pupils are a 99-year-old woman and a 98-
year-old man. The woman has expressed her philosophy by saying 
she participates not to live longer, but to make her days 
better.
    The wellness nurse supervises the administration of 
medications and the monthly check on weight and vital signs. 
Both the nurse and the weekend LPNs only work the daytime 
hours. During evening hours, the supervisors and the medication 
technicians, called med techs, make decisions about 911 calls 
and consult with the resident's doctor.
    There is no doctor on the premises. A well-trained med tech 
delivers pills and other medications such as atomizers. A 
resident may receive as many as a dozen pills with a small 
glass of water despite the fact that most pills say to take 
with eight ounces of water. Sometimes pills are given out 
before the resident has had breakfast. I wonder about the 
advisability of such practices.
    I have concerns about the protocol practiced when a 
resident falls. The resident should be carefully helped up once 
a determination has been made that it is safe to move them. The 
staff should first check the resident's vital signs and range 
of motion. This is not always done.
    Resident assistants, or RAs, provide the personal care for 
residents such as giving showers and baths, changing diapers, 
dressing, seeing that the residents get to meals and so forth. 
They also do the laundry and make the beds on the assigned 
floor. In addition, they work in the dining room waiting on 
tables and doing dishes. All this for $7 or $7.50 an hour 
depending upon their experience.
    For many, English is a second language and 
misunderstandings do occur. Presently, since the house is not 
full, the RA work hours are being cut by one full day a week. 
This represents a loss of approximately $56 a week. Of great 
concern is the unrecognized deterioration of some residents, 
particularly the more independent residents who do not receive 
daily assistance from the staff. Problems such as depression, 
confusion, unsteadiness, and weight loss are not always brought 
to the attention of the nurse or the executive director.
    Alert residents are frequently more aware of these resident 
changes than the senior staff. The turnover in staff at all 
levels is truly appalling. In my 6\1/2\ years, for example, we 
have had seven executive directors, six activity coordinators, 
and countless RAs. The turnover is disruptive. Just as you get 
used to someone, she is gone or he is gone. The work pressures, 
low pay, amount of work are surely factors.
    To make ends meet, some of the staff take on second jobs, 
and just cutting each RA's time not only discourages loyalty 
but also sends a message that they are not important to the 
home.
    I appreciate this opportunity to express my views about 
assisted living. It has made my life, which is difficult at 
best, much more pleasant. Thank you.
    [The prepared statement of Ms. Kilby follows:]
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    Senator Breaux. Dr. Kilby, thank you very much for sharing 
your thoughts with us, and we are delighted to welcome now Ms. 
Esther Gallow from Louisiana. Delighted to have you with us.

   STATEMENT OF ESTHER GALLOW, PRESIDENT AND CEO, BOOKER T. 
              COMMUNITY OUTREACH, INC., MONROE, LA

    Ms. Gallow. Good morning. I bring you greetings from the 
State of Louisiana. I am Esther Gallow, president of the Booker 
T. Community Outreach, Incorporation, in Monroe, LA. Our goal 
is to improve the living conditions of the poor and elderly 
residents of the Booker T. Community by producing affordable, 
safe, and decent housing, and creating vehicles to improve the 
social and economic conditions of the residents in the Booker 
T. area.
    Booker T. is the oldest and largest neighborhood in Monroe, 
where the greatest concentration of very low and low income 
elderly live. It has the highest concentration of deteriorated 
houses and structures in Monroe. The average income of our 
seniors is between $3,200 and $5,361 per year.
    My organization is proud of the fact that through our 
efforts for the first time in 20 years, reinvestment and 
revitalization is occurring. When the long-time low-income 
elderly in our community can no longer live in their own homes, 
they literally have no place to go, and nursing homes come into 
play. They have no choice about life.
    My organization believes it is important for elderly 
persons to have the opportunity to stay in their communities 
where they can continue to play a vital role and stay connected 
with their families and friends. To address this most critical 
need, Booker T. has embarked on this largest project, the 
development of a Senior Village, a $5.5 million project 
consisting of 28 units of independent rental units and 40 units 
of assisted living and adult day care, all on 7.2 acres in our 
community.
    I believe the Senior Village will serve as a national model 
where no such facility has provided for low income in our 
State. The State of Louisiana does not presently have a 
Medicaid waiver. To accomplish our goal thus far and make the 
dream of the Senior Village a reality, many partnerships are 
involved.
    First, Booker T. enjoyed a strong, positive and supportive 
relationship with the residents of the Booker T. community. 
Family and community members will play a critical role in the 
ongoing management of their family members by providing such 
things as housekeeping, bathing, involvement in activities. In 
other words, this is our village, these are our seniors, and we 
plan to take care of them.
    Booker T. is grateful to Senator Breaux, Senator Mary 
Landrieu and their staffs, also Richelle from the McAuley 
Institute, who were instrumental in getting Booker T. a 
$498,900 EDI special project grant through HUD's 2001 
appropriations bill.
    We were able to leverage this, bring in the public and 
private together. The Sisters of Charity of the Incarnate Word, 
who was one of our major sponsors, also is one of the largest 
providers of health care in the State of Louisiana and Texas, 
has joined forces with us. Not only did they purchase the land 
for us, they have put up monetary donations and will also 
manage the assisted living which they currently do anyway.
    The Christus Help Foundation has also put up monetary of 
$150,000 toward this project. The city of Monroe, I just was 
informed last night, has agreed to do all the infrastructure on 
the 7.2 acres and also a commitment of $250,000 toward this 
project. AmSouth will do the gap financing, if necessary, and 
has also cosponsored a loan application to the Federal Home 
Loan Bank to support the assisted living facility.
    We have applied for a 202 HUD that will support the 
independent facility, and through the Louisiana tax credit 
program, we have applied for a loan that will take care of all 
of the construction costs for the assisted living facility.
    AARP is instrumental in our project also. We have opened up 
a local office in our community. All of these people are coming 
together to help and we are not at this point through with 
begging and asking for assistance. Our main concern is to get 
as much money as we can into the assisted living part so that 
it will not be looked upon as a profit-making but a way of 
helping our people.
    I would like to urge the committee, No. 1, to investigate 
ways to encourage States that have not yet granted Medicaid 
waivers to do so.
    No. 2, to promote the use of project-based Section 8 for 
low incomes in non-202 projects.
    No. 3, to encourage HHS and HUD and other entities to work 
closer together to resolve this problem.
    Finally, I would like to urge this committee to press more 
for Federal resources to produce these type of facilities. Our 
elderly should have a choice. I thank you and welcome questions 
or comments.
    [The prepared statement of Ms. Gallow follows:]
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    Senator Breaux. Thank you very much, Ms. Gallow, for an 
excellent presentation. Mr. Southerland.

     STATEMENT OF BILL SOUTHERLAND, MANAGING PARTNER, BILL 
        SOUTHERLAND'S RESIDENTIAL CARE HOMES, EAGLE, ID

    Mr. Southerland. Good morning, Senator Breaux and Senator 
Wyden. I am Bill Southerland, managing partner with 
Southerland's Residential Care in Boise and Cascade, ID. I 
serve as president of the Idaho Assisted Living Association, an 
affiliate of the Assisted Living Federation of America, and 
also am on the board of directors for the Greater Idaho Chapter 
of the Alzheimer's Association.
    I am honored to be here this morning to speak about some of 
the issues relating to rural areas providing quality assisted 
living in those areas. I have been a resident of Idaho for 40 
years. I started my business 16 years ago with my father-in-law 
Emerson Smock. We currently operate four facilities in Boise, 
and one in Cascade, Idaho has a population of 1,000.
    I researched the area, Cascade, and found that there was an 
aging population there, and if assisted living services were 
available, there would be enough clients to make it worthwhile. 
With the help of the SBA and a local lending institution in 
Boise, the project was started and completed in 1995. We opened 
up with five full-time residents and it continues to operate at 
full capacity.
    The average assisted living resident in Idaho usually needs 
a minimum or stand-by assistance with ambulation and requires 
help or verbal cuing with activities of daily living, and help 
with bathing, dressing, and some degree of incontinence. 
Medication management, housekeeping and nutritional needs are 
also common. Usually most residents suffer some form of memory 
loss.
    Assisted living in Idaho also takes care of folks that have 
mentally ill diseases and developmentally disabled problems. 
They are all under the assisted living rules and regulations. 
Assisted living communities provide services to meet the needs 
of all of these clients, particularly elderly.
    The assisted living service is greatly needed in rural 
communities. A lot of times the smaller communities are 
overlooked for several different reasons: the ability to 
operate efficiently in a small rural area; having the choice of 
staffing and qualified staffing; and the ability to educate the 
staff to provide the services long-term basis.
    Assisted living provides choices for people requiring 24-
hour basic care and supervision. Elderly residents in rural 
areas sometimes have to leave their homes and move to larger 
areas to seek these services. Families are faced with 
additional hardships having to travel longer distances to see 
their relatives, and also it makes the resident that has to 
travel to get the services feel isolated and a lot of times 
depressed.
    Some of the challenges facing development in assisted 
living in rural areas include financing and finding and 
retaining qualified staffing, educating the local agencies of 
laws governing assisted living. Medicaid reimbursement is very 
critical. A lot of times in the rural areas a lot of folks have 
to depend on Medicaid reimbursement for their care in assisted 
living. The ability to provide training for caregivers on a 
continuing basis is very, very critical also.
    Assisted living communities in Idaho must be licensed. 
Idaho was the first State to require licensed administrators 
for assisted living communities. Regulations have been a 
significant tool to help improve quality of care and assisted 
living. We have worked with our association and State 
regulators to provide regulation from the State level to make 
sure that assisted living is a safe and secure environment for 
our seniors.
    The Idaho Assisted Living Association worked closely this 
year with the House Health and Welfare Committee in Idaho that 
was formed to take a look at the existing survey process. The 
subcommittee's recommendations have been passed on to the 
Residential Care Council for Elderly for further review and 
implementation. The objective of the recommendations was to 
make the survey process less adversarial and more constructive. 
That subcommittee was a very successful venture and we are 
really proud of that.
    Consumer rights are very important in assisted living and 
are mandated by Idaho state law. These rights are posted in 
each licensed assisted living residence. Included in the 
consumer rights is the right to access advocates and adult 
protection services. Informing residents and family members of 
these rights is a mandatory part of the admission process.
    Medication management regulations are the responsibility of 
the Idaho Board of Nursing. Rules in place now allow caregivers 
in assisted living to attend comprehensive medication 
management courses, be tested, and following, if the caregiver 
or attendant passes the test, an RN still has to give the 
delegation to that person in order to be able to manage the 
medications.
    Access to current information in rural areas is critical 
for caregivers and administrators. Utilization of the internet 
to provide education and information on a regular basis is 
needed.
    Another challenge facing rural assisted living providers is 
obtaining Medicaid reimbursement levels for clients in rural 
areas.
    Finally, rural areas could benefit greatly from a bona fide 
wellness program on a consistent basis. I initially got into 
assisted living for one reason: to make a living. However, I 
learned very quickly that assisted living is more than just 
making a living. I can make a difference in someone's life. I 
can provide a home-like environment for someone who has had to 
move from their own home. I can make a difference by just 
spending a little time to give to a resident who is lonely and 
does not want to bother anyone.
    I can listen to a resident explain about their past and 
what significance he or she played in history. I can give a 
person choices when they think that no choices are left. I can 
give them personal care with dignity. I got into assisted 
living to make a living, but it is so much more. Thank you.
    [The prepared statement of Mr. Southerland follows:]
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    Senator Wyden. Thank you. The chairman is back and why 
don't we just move to Ms. Love.

     STATEMENT OF KAREN LOVE, EXECUTIVE DIRECTOR, CONSUMER 
         CONSORTIUM ON ASSISTED LIVING, WASHINGTON, DC

    Ms. Love. Good morning. Thank you, Senator Breaux and 
Senator Wyden, for the opportunity to address this committee 
this morning. I am here today on behalf of the Consumer 
Consortium of Assisted Living, an organization I co-founded in 
1995. We commend you for taking up this timely topic again.
    I have been an administrator of an assisted living 
facility, two different types, one ranging in size 60 beds, the 
other a 220 bed campus. I am also a consumer. My father has 
Alzheimer's disease and resides in an assisted living facility 
and has for over 2 years.
    According to Dr. Catherine Hawes, the author of the 
National Assisted Living Study, one in four assisted living 
residents currently need as much help as a typical nursing home 
resident. One recent caller to our CCAL helpline described the 
situation in which her father had lived in an assisted living 
facility for over 3 years. The father needs daily assistance 
with activities of daily living such as bathing and dressing. 
He often goes without assistance because there is not enough 
staff. As a long-time resident, he has bonded with staff and 
residents and is willing to accept poor care in lieu of moving 
out of the facility and somewhere else where he does not know 
anyone.
    This creates serious conflicts for the daughter because she 
hates to see her father poorly cared for, yet she understands 
his need to fit in, as well as his ability to make his own 
decisions. Unfortunately, this is not an isolated situation. 
CCAL hears all too frequently about care problems. To operate a 
facility without sufficient trained staff to care for the 
contractual needs of its residents is corporate negligence. The 
industry has allowed an unacceptable margin of error for 
itself.
    Assisted living has experienced explosive growth. At times, 
this rapid growth has occurred at the cost of resident care as 
quality resident services have not kept pace with brick and 
mortar construction.
    The Census Bureau projects that the population of 
individuals 85 years and older will be the fastest growing part 
of the elderly population throughout the rest of this century 
and will more than double by the year 2030. This enormous 
growth has significant implications for assisted living as 
individuals 85 years and older are those most likely to become 
assisted living residents.
    Yet, despite the tremendous growth of the industry, frailty 
of the residents and the demographic trends, as has been 
discussed earlier this morning, we know that there are no 
uniform standards or Federal regulations to protect residents 
and ensure that their needs are met.
    According to a statement Dr. Hawes made last year, the 
combination of sicker people and low caregiver-to-resident 
ratios is dangerous. These two things are on a collision 
course. It is just a time bomb waiting to go off she says.
    This time bomb may have already gone off. Recent front-page 
stories in The New York Times, Wall Street Journal and the 
Washington Post abound with stories of problems in assisted 
living. A dearth of workers which we have also heard about this 
morning in the long-term care industry and low occupancy rates 
pressuring the need for providers to fill beds has further 
heightened the concerns about quality care.
    The Washington Post recently reported about a situation in 
which an 83-year-old frail female resident residing in a 
facility of one of the industry's largest providers was 
assaulted in the day room by a 55-year-old male resident. This 
vulnerable female resident died 2 days later in a hospital from 
injuries sustained in the assault. Was this male resident an 
appropriate admission to a facility caring for vulnerable 
individuals or was the company simply filling beds?
    These significant problems are compounded by the uneven and 
patchwork approach to State regulations and oversight producing 
an increasingly alarming picture of the industry. The industry 
is regulated, as has been mentioned earlier, individually by 
States, but there is such a variability, even in what we call 
assisted living. There are over two dozen names. For example, 
adult residential services, home for the aged, domiciliary 
care. It is very confusing. Senator Clinton beautifully 
described the confusing array of licensing options when she 
described what New York state alone has.
    One of the problems with nursing home oversight and 
national standards is that advocates have spent decades trying 
to catch up to an industry that got off to a freewheeling and 
virtually unrestrained start. Our nation's nursing home 
residents and their loved ones have paid and continue to pay a 
high price for that.
    The assisted living industry has been given--we are into 
the second decade of an unrestrained start. We believe that no 
further time should pass before we really begin appropriately 
addressing and responsively answering these important needs. I 
am so glad to hear, Senator Wyden, this morning your suggestion 
about national standards.
    CCAL has begun the effort to develop what we have called 
model standards, model resident-centered standards, in a 
process to enlarge the national dialog on assisted living and 
the action. This should be encompassing of all of the 
stakeholders and we hope that the industry will join us as 
well. Thank you.
    [The prepared statement of Ms. Love follows:]
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    Senator Breaux. Thank you, Ms. Love. Next we will hear from 
Ms. Thompson. Ms. Thompson.

 STATEMENT OF MARGARET THOMPSON, BOARD OF DIRECTORS, ASSISTED 
         LIVING FEDERATION OF AMERICA, WASHINGTON, DC.

    Ms. Thompson. Good morning, Mr. Chairman and Senator Wyden. 
Thank you very much for this opportunity. My name is Peg 
Thompson. I am from Huntsville, AL. My family owns and operates 
nine assisted living residences in small communities in 
Alabama, Pennsylvania, Mississippi and Tennessee.
    I am also a founding member of ALFA, the Assisted Living 
Federation of America, and it is in that capacity as a 
representative of ALFA's 7,000 members and 41 State affiliates 
that I am privileged to be here today.
    This is an extraordinary opportunity, and as a provider in 
those small States, I cannot tell you how heartened I am to 
hear the support of the committee members in making sure that 
assisted living is a vital part of the continuum of care in 
this country.
    Since ALFA's founding in 1990, we have been committed to 
enhancing consumer choices in long-term care and championing 
quality of life issues for older people and particularly our 
residents. Our assisted living communities, as you all have 
said, offer a needed residential alternative for the elderly 
and others who need help with the daily activities that many of 
us take for granted and do without any care at all.
    Mr. Chairman--excuse me--Senator Breaux and Senator Wyden, 
there are three points that we as an industry think are 
essential that we focus our discussions on today. First, a 
cherished value in this country is independence, and 
independence, as Senator Carnahan mentioned earlier, means 
freedom of choice. Older Americans want to choose where they 
live and what their daily activities consist of and how they do 
those activities.
    All of us as Americans have an obligation to respect and 
protect their freedom to choose, even those people who need 
help in those choices everyday. Assisted living offers one of 
those choices and for many people it offers the choice that has 
advantages over living at home. It offers the advantage of 
security and services and a social life that sometimes is 
missing for older people in their own homes.
    Second, we wholeheartedly unequivocally as an industry 
support regulation. We support regulation at the State level, 
which is the level that is closest to the consumer. We are 
heartened by Senator Wyden's suggestion that we look at a model 
statute to bring some language consistency across the country 
and provide States with some needed, not necessarily guidance, 
but to take the things that really do join us together and move 
on from that point.
    All 50 States regulate assisted living. All 50 States and 
the District of Columbia regulate assisted living today. We are 
diligently working in the States to clarify the understanding 
of assisted living, to bring more consistency, particularly in 
disclosure, because that is an issue, and to make improvements 
in staff training and availability of staff across the country. 
Those are huge priorities for us.
    But those regulations must be done in a context where they 
do not restrict seniors' choices.
    Third, since we met 2 years ago, ALFA and its Informed 
Choice campaign has made real progress in the areas of 
disclosure, staff training, and our most serious concern which 
is availability of staff. And with your permission, I would 
like to give you a couple of examples in each one of those 
areas that might amplify what really is happening in assisted 
living today.
    Regarding the imperative to protect older people's right to 
choose, I think I need not do anything other than point to Dr. 
Kilby's examples of the choices that she has made to make her 
life dealing with chronic disabilities more possible for her. 
She is an example of the reason that most of us in this 
industry are assisted living providers and feel privileged to 
provide those services everyday.
    Last week, one of my residents in a community in 
Pennsylvania said it this way: you know, I have never eaten 
breakfast at 6:30 in the morning; I don't want to eat breakfast 
at 6:30 in the morning. Why can't I choose to eat it at ten 
o'clock? And by the way, someone said that in the nursing home 
I would have to have my bath at ten o'clock in the evening. I 
don't stay up until ten o'clock in the evening. I have always 
had my bath at seven o'clock in the morning.
    Those seem like little choices, but those are choices that 
are very important to our residents and we want to protect 
those choices. Being at home means these things and being at 
home is assisted living.
    A move from a beloved home to assisted living is a huge 
family choice. And that is why we are such proponents of full 
disclosure before, during and at the end of someone's 
residence, and I will discuss those things in just a minute.
    Regarding regulation, I can't emphasize how supportive we 
are of States providing a good regulatory structure in which we 
can function. We are caring for the frail of this country. We 
take that responsibility seriously, and our collaborations with 
States have been very successful in creating regulation at the 
level that impacts consumers the most, the closest level to the 
consumer, so that local consumer groups, local chapters of AARP 
and the Alzheimer's Association can contribute to that process.
    In my home State of Alabama, a very good example is in 
place today. Over the last 8 months, we have created all kinds 
of regulatory structures brand new for the industry, and all 
people involved are now stakeholders in the success of those 
regulations.
    In regard to staffing, ALFA has an array of programs that 
are in place today including certification for administrators, 
which is the biggest example, that 750 of our administrators 
have already participated in. It is an example of a program 
that works not only to improve the quality of the ability of 
our administrators but also improves the quality of service for 
our residents, and ALFA has instituted ten other such programs 
that are being very widely accepted in the industry.
    Those three points, Senators, the importance of protecting 
choice, the cornerstone of state regulation in the process of 
maintaining quality of care in our industry across the country, 
and the industry's continued desire to work with regulatory 
agencies, with consumer groups, to make sure we are creating an 
option that is a true choice of quality in this country, are 
critical to all of us, and I thank you very much for the 
opportunity of speaking this morning.
    [The prepared statement of Ms. Thompson follows:]
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    Senator Breaux. Well, let me thank you, Ms. Thompson, and 
all the members of the panel for being with us and for your 
statements, which I think have been very interesting and very 
helpful.
    Let me start with you, Ms. Thompson. You all have nine 
assisted living facilities.
    Ms. Thompson. Yes, sir.
    Senator Breaux. Now if I am looking at one of your 
facilities to place a relative, how do I know or can I know 
through any type of a structure or a system about the quality 
of care that your facilities meet?
    Ms. Thompson. That is a very interesting question, and I 
was listening to the Senator's comments earlier. Right now the 
comparative quality issue is not one that has been addressed in 
a systematic way. The way that one accesses information is not 
a very good way. The access is to state survey reports for an 
individual facility if it is licensed.
    Senator Breaux. All of your facilities are licensed?
    Ms. Thompson. Yes, sir.
    Senator Breaux. By the State? But I take it that license 
does not have anything to do necessarily with meeting certain 
standards of quality of care?
    Ms. Thompson. No, and actually that is the reason why ALFA 
has been so aggressive in creating tools for providers to allow 
consumers to access that kind of quality information. There is 
not a system, but there are systems with ALFA's web site, for 
example, that have a very large consumer component. It has this 
consumer guide included in it, Senator Breaux, and oops, I have 
got it upside down.
    In the middle of this consumer guide is something that my 
folks use everyday, every inquiry, every visit. And it actually 
gives consumers the opportunity to compare apples and apples. 
It is a very intimate process when one chooses an assisted 
living residence, and we are very strong proponents of folks 
being able to compare the pricing structures, the services that 
are included and not included, the array of things that are 
listed in this checklist, and it is very helpful.
    Senator Breaux. But somebody else operating across the 
street from you, for instance, in a licensed facility in one of 
your States does not have to do any of that if they do not 
think it is desirable perhaps?
    Ms. Thompson. Excuse me? Isn't required to do? No. They are 
not required to do so. That is why ALFA is introducing in all 
the States a model disclosure act, which is part of my written 
testimony, and it is our goal to introduce that for just that 
purpose in each one of the States.
    Senator Breaux. Excuse me. So that would be a disclosure 
type of requirement, but it would not be setting standards for 
assisted living facilities as to what they have to meet; is 
that correct?
    Ms. Thompson. Well, there are standards in each one of the 
States. And another example of one State solution to that real 
problem is what the State of Kentucky has done. They have 
created a consumer guide using some of the elements from this 
consumer guide, and what they have done is they are requiring 
their assisted living residents to provide this piece with 
every inquiry, and this piece not only has a consumer checklist 
describing what assisted living is in the State, giving folks 
the same kind of guidance on how to compare, but it also has 
the statute in this piece.
    Senator Breaux. But does the statute just require the 
providing of information on what the assisted living facility 
does, or does it require the assisted living facilities to meet 
certain guidelines and certain standards with regard to the 
number of employees, the number of med techs that operate in 
the facility or anything of that nature?
    Ms. Thompson. Yes, sir. Each one of the States has a set of 
guidelines that describes facility requirements, staffing 
requirements, minimum staffing requirements.
    Senator Breaux. Ms. Love, you are shaking your head. You do 
not agree with that. I just caught you right there in the act 
of disagreement so let me have you comment on what she is 
saying.
    Ms. Love. There isn't consistency. Every State does not 
have----
    Senator Breaux. Use the mike, if you can. You all share 
that.
    Ms. Love. That is one of the problems that there is that 
lack of uniformity and consistency. Not every one of the States 
has minimum staffing requirements or this disclosure 
information, but we are wonderfully heartened to hear that the 
industry is working on that. As you note, these are things that 
are important.
    Ms. Thompson. I think information in this process is 
extraordinarily important, and we have found that the more 
disclosure we provide up front, the happier resident population 
we have.
    Senator Breaux. Let me, the thing that is striking me, I 
mean we went through this 2 years ago, and we talked to the 
industry about doing some things to try and voluntarily bring 
themselves into a structured situation where there were certain 
standards and requirements.
    Ms. Thompson. And we still are in that process, Senator 
Breaux. I mentioned the model disclosure statement. The 
industry is now requiring its members to disclose--excuse me--
to support the association's disclosure position before they 
become members. We are in the process of developing with 
regulators, providers and consumers a set of best practices. To 
do that and to do it in a way that protects the things we have 
described, it is a very complicated process. And those best 
practice standards will be introduced for the first time at a 
State regulator conference this fall.
    Senator Breaux. We had hoped that self-accreditation was 
going to be the answer to this, and I note that since 2 years 
ago that fewer than 20 facilities in the entire country have 
some type of a self-accreditation program, whether it is 
through the Joint Committee on Accreditation of Health Care 
Organizations or what have you.
    I mean it is one thing for disclosure. I am happy that you 
have made progress in disclosing what you do. But for many, I 
am concerned about what they do. And are they meeting a minimum 
standard for the people that are in there? Are they being 
accredited by some either self-accreditation program or by the 
State, by the Federal Government, or by somebody?
    Ms. Thompson. Well, I think the reason why we are so 
supportive of State level standards is, as I mentioned, that 
those level of standards are at the level where consumers can 
access them more readily.
    Second, we very much support in many States that the 
enforcement capability of the States be increased. That really 
is where, if there is a difficulty today, Senator Breaux, it is 
in the enforcement of existing regulations and not the 
imposition of another set of regulations.
    In Alabama, for example, there are--with this change in 
regulations, we are, in fact, implementing very significant 
fines for serious problems in assisted living residences, and 
also tightening the State attorney general's ability to 
prosecute folks who are not providing good services.
    Senator Breaux. Well, what happens when you have 50 
different sets of regulations? You operate in more than one 
State yourself.
    Ms. Thompson. Yes, sir.
    Senator Breaux. Suppose you operated in all 50 States. Is 
it practical to have 50 sets of different rules and regulations 
and standards that you have to meet in each State? Wouldn't it 
be better to have a national standard that is enforced on a 
local level or is that not the right way to go?
    Ms. Thompson. I think if you look, actually if you look at 
assisted living on a state-by-state basis, the system really is 
working. As I said, I think we really do need a better ability 
to enable States to enforce the existing regulations. And to 
operate in 50 States means that we are serving local 
populations in those 50 States, and I operate in five States. 
Tomorrow I might operate in six States. I really welcome the 
opportunity to create an environment in that State that fits 
the needs of folks in that State, and the diversity, the 
difference between operating a community in Mississippi and 
operating a community in Pennsylvania, we operate under those 
rules very successfully because we are serving people in those 
States.
    I see no reason why a uniform standard would do anything 
other frankly than perhaps, and this is a risk for us, restrict 
exactly the kind of choices and the kind of innovation that we 
have been blessed to have under the current regulatory system.
    Senator Breaux. One other point and I will turn it over to 
Senator Wyden. Ms. Gallow, let me ask you a few things. I was 
very interested and have been aware of what you all are doing 
in Monroe, LA. The income levels of the people you are serving 
are obviously very disturbing. Three thousand to $5,000 a year 
does not allow a person in that category to pick and choose 
among the best of assisted living facilities with that kind of 
an income.
    Why is my State and your State and our State not eligible 
for Medicaid assistance to people in your situation that you 
serve? I mean every one of them would be Medicaid eligible if 
Medicaid had a waiver in our State to cover assisted living 
facilities.
    Ms. Gallow. It is because we have a very strong lobbying 
group of nursing home advocates that do not want Medicaid 
waivers for assisted living.
    Senator Breaux. I mean I understand the bottom line here 
they don't want competition for their patients in assisted 
living facilities, but what in the world can they possibly 
argue publicly as to why they would oppose having those 
citizens eligible?
    Ms. Gallow. They can't really argue effectively. What we 
have been doing is lobbying down in Baton Rouge trying to get 
our representatives to see that the cost of putting a person in 
a nursing home in Louisiana is 30 percent more than putting 
them in an assisted living facility, and we are hoping that 
within the next year, they will hear our cries, but as of now, 
right now, we don't have it.
    Senator Breaux. Its just--it seems----
    Ms. Gallow. I know it is mind-boggling.
    Senator Breaux [continuing.] It is hard to believe. Of 
course, we are both from there, and I know----
    Ms. Gallow. It is Louisiana. [Laughter.]
    Senator Breaux. And I know what you are facing down there. 
Well, a number of other States are in that same situation. I 
think there are 38 States that have a Medicaid eligible waiver 
and the rest do not. I mean it seems to me that it is hard to 
understand why we don't.
    Ms. Gallow. Yeah. There are a number of us who have formed 
a coalition from northern Louisiana and also from southern 
Louisiana. We went to Baton Rouge a couple of weeks ago, and we 
plan to go back in about 3 weeks when they meet again because 
we are screaming louder and louder. And that is all we can do.
    Senator Breaux. I will tell everyone here that if the 
Federal Government is going to participate in helping to pay 
for the care of these patients----
    Ms. Gallow. That is right.
    Senator Breaux [continuing.] Through a Medicaid program, I 
am particularly disturbed that it could be in a facility of 
which there are no national standards. If we are going to give 
75 percent, which in Louisiana is about a 75/25 Federal 
Government match----
    Ms. Gallow. Right.
    Senator Breaux [continuing.] For the State's match, I do 
not want to have that money being spent in facilities of which 
there are no standards. I am not saying it has to be Federal 
standards, but there have to be standards, and right now a lot 
of assisted living facilities really don't have to meet any 
standards. Maybe they do and they got some great examples of 
facilities that are providing the very highest quality, but 
then there are some that are perhaps not.
    And if we are going to be spending tax dollars, I think we 
ought to be able to ensure everyone that it is being spent in a 
facility that meets certain standards.
    Ms. Gallow. I agree.
    Ms. Thompson. Senator Breaux, can I respond?
    Senator Breaux. Yeah.
    Ms. Thompson. I think that does show the benefit of having 
a model statute because as we move forward in the process of 
making access possible to this type of service for even a wider 
array of folks, I mean at this point 90 percent of folks in 
assisted living residences are paying with their own dollars or 
their family's dollars, and as we widen access with creating 
opportunities for folks who will use Federal dollars, I think 
to have a statute, a model, to alert States to the fact that 
this may be coming and create that model approach within each 
one of the States is an excellent idea.
    It is not that we should have standards. We must have 
standards or consumers cannot evaluate who we are and what we 
do. Our point is that we want to make sure that the development 
of the details of those rules happen as close to the consumers 
as we can possibly get it.
    Senator Breaux. I appreciate that. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I think your 
questions were excellent and I want to get into the same sort 
of areas. Dr. Kilby and Ms. Gallow, thank you for excellent 
presentations.
    Ms. Gallow. Thank you.
    Senator Wyden. To have advocates like you on the front line 
is a tremendous benefit to the nation's seniors and we really 
appreciate your being out there and the work that you do and 
your voices today.
    I want to spend some time, Ms. Love and Ms. Thompson, 
looking at the common ground between the two of you. I was 
struck in many ways as I listened to the question Senator 
Breaux asked about the parallels between this discussion and 
discussions we had about nursing homes 25 years ago. Twenty-
five years ago when I had rugged good looks and a full head of 
hair, the discussion was sort of the same as the discussions we 
are having right now. The question then was how do you get the 
essential consumer protections for vulnerable people? The 
question now is how to do that and at the same time give a 
critical industry enough flexibility to innovate and meet 
modern circumstances?
    Suffice it to say today, 25 years later, both the nursing 
home industry and nursing home advocates are not particularly 
pleased with the decisions that were made 25 years ago. So what 
we are trying to do here is to avoid a replication of the next 
25 years with respect to assisted living. That is the 
objective, and I think both of you would agree, and I 
appreciate your nodding your heads.
    What would you think--because I have been talking about 
this model statute--this is a question for the two of you--of 
this committee working with both of you, consumers, industry, 
State health departments, and I also want to involve 
researchers in this field, gerontologists, because they will 
help us get some ideas about what is ahead, to develop a model 
state statute, a state statute, so that we could have the 
States leading, but have strong consumer protections, and then 
hypothetically say we will give the States a period of time to 
enact that model state statute, and if the States didn't do it 
within a period of time, then there would be some other 
consequences and we could work through this process to decide 
what that might be?
    Ms. Love and Ms. Thompson, what do you think about our 
trying to go at it that way?
    Ms. Love. I think it is an excellent suggestion, and I 
loved your example earlier of the Medigap, using that, where 
you had all the stakeholders kind of coming together, that the 
government didn't take predominant role, but they were 
certainly at the table, and I think that your similarly 
suggesting something for assisted living is right on target, 
that we could come up with model standards. It is something 
that at CCAL we have already partnered with the American Bar 
Association's Commission on Legal Problems for the Elderly and 
want to extend the net to all of the stakeholders.
    And we don't think that model standards per se squelch the 
ability to have creativity and innovation. For example, we have 
a tremendous array of transportation, automobiles, SUVs, 
trucks, et cetera, so there is lots of creativity in designing 
different vehicles, but yet they all still have a similar set 
of standards, you know, on health, you know, different 
emissions requirements, tire safety and standards, et cetera.
    I think that is something that we can include, you know, 
sitting at the table and we would want to include researchers. 
We would also want to include people within the States. For 
example, the different surveyors, the regulators, I think they 
would bring a lot to the discussion as well. You brought up a 
wonderful example about the nursing home 25 years ago, and that 
here we are 25 years later and the industry and consumers still 
aren't on the same page. And I think that the reason for that 
is because they weren't on the same page to begin with.
    The advocates were not involved. The nursing home industry 
got off to a galloping start, and it was not until several 
decades later that the consumer advocates really had some 
impact. We are unfortunately almost at the same state here in 
assisted living. Twelve years and finally consumers are getting 
a chance, you know, to really step up to the plate and 
participate in some of the discussions. Had that happened at 
the outset, the emergence of the industry, maybe we would not 
be on such different pages now, and we hope to rectify that 
now.
    Ms. Thompson. I think we are in that process. I think--I 
know the industry is very supportive of helping States help us 
do the best job for our consumers. I think the involvement of 
the State stakeholders might be the most problematic part of 
designing a model statute, Senator Wyden, because each one of 
the States has so much ownership over their own processes but 
also over this one because most of the States are currently 
very active in this arena. This is a very big area right this 
minute in the States.
    So we are very supportive of the process that you are 
describing and we will help in any way we can to move it 
forward.
    Senator Wyden. I am going to interpret that as pretty much 
a sympathetic answer.
    Ms. Thompson. That is a yes.
    Senator Wyden. Good.
    Ms. Thompson. A long yes--sorry--but it is a yes.
    Senator Wyden. One of the things that I would hope, and I 
think that Ms. Love would agree with it, is that for the States 
that have done a good job, and there are a number of them, the 
model state statute wouldn't change their lives very much.
    Ms. Thompson. Right.
    Senator Wyden. In other words, we are not talking about 
tearing up the concrete and starting all over. We are talking 
about States that are doing a good job pretty much being able 
to do their thing, recognizing that what works in Coos Bay, OR 
is often a little bit different than what works in Detroit, but 
we would also have a tool to get the States that haven't 
provided the consumer protection that both of you, to your 
credit, have said are needed.
    We have a tool to get them up to speed, and that is what I 
would like to work with you both on, and as I say, I am just 
struck by how similar the discussions are now about assisted 
living to discussions of 25 years ago on nursing homes, and 
both of you look like exactly the kind of people we want to 
have at the table, people who want to try to get some common 
ground here that is in the consumers' interest, because of the 
vulnerable people we are dealing with that lets the many people 
in the industry who want to do the right thing and deserve some 
predictability, by the way, to know what is going to be asked 
of them, to have an opportunity to do that. And I thank you for 
it.
    Ms. Thompson, just a couple of business questions. The news 
media has been reporting, The Wall Street Journal and others, 
that there is a significant oversupply of facilities in the 
assisted living facility. Is that your judgment and what are 
the ramifications for the Congress in looking at oversupply 
kinds of questions?
    Ms. Thompson. About 4 years ago, Senator Wyden, there was a 
great deal of capital that gravitated toward the idea of 
assisted living. And in the period from 4 years ago until about 
18 months ago, that created a great deal of creation of supply 
in market areas where there had been none before.
    And I think in some markets, particularly--well, really the 
markets are all over--the rural markets, that someone may have 
built a community that is a little too big for that particular 
area. There are urban areas where that has occurred as well.
    When one looks at the demographics, it is a very slowly 
decreasing problem because capital has not been flowing into 
the industry except for very mature operators for the last 
year. And so the market has recognized that there was some 
overbuilding or some not saturated areas because of more 
buildings than had been in the past, and capital has tightened. 
So the market actually is giving operators the opportunity to 
catch up on their operations because of the lack of capital 
right now.
    So in terms of a long-term problem with us continuing to 
build in areas that are oversaturated, the underwriting 
criteria that are being used by folks lending in the industry 
have tightened so much that lenders are very concerned and very 
conservative about the folks to whom they will lend. So I 
really don't think that it is an issue that the Congress needs 
to look at at this time.
    Senator Wyden. One of the reasons that I ask it is that 
because we know there are maybe 5 percent of the people in 
virtually every field on the planet that are a problem--5 
percent of the lawyers, 5 percent of the doctors, 5 percent of 
the accountants, by the way, 5 percent of the Members of 
Congress--and I have been concerned about the question of 
whether running up these debts that have been documented is 
part of the reason for the 5 percent we see in this field, that 
those people get overextended, they have got to deal with the 
real estate side of the equation, and then patient care 
suffers.
    Do you think that that has been a factor in that small 
percentage, the 5 percent, that the industry, to their credit, 
has been saying they are concerned about, too?
    Ms. Thompson. I think we are a maturing business, and there 
are a lot of lessons that those of us who took on really the 
lion's share of expanding this option around the country we 
have had to learn. That one has to have the same systems in 
place if one has a 100 residences as I have with nine. And they 
have to be of similar quality, and it is exponentially more 
difficult to do it with 100 than it is to do it with one or 
nine. And so I think that is a maturation process.
    The fact that problems exist is heart-wrenching for all of 
us, but I think the decrease of the capital available in the 
markets right now has actually been a blessing for the industry 
because we have been able to focus on those issues, and 
hopefully we will resolve as much of the 5 percent as is 
humanly possible.
    Senator Wyden. Last question that I had dealt with this 
dire worker shortage that we are seeing in assisted living and 
virtually every other health care area. I would assume, Mr. 
Southerland, that in rural communities that this is 
particularly serious. I have well over half the communities in 
my State, you know, with very modest, you know, populations, 
and they are having difficulty. What are you all doing to 
recruit the workers that you need and any suggestions for how 
we might encourage it?
    One of the things that I have been looking at is the idea 
that we ought to offer scholarships, particularly to low income 
students, to work in the aging field. I think that this might 
well be seen as a path of upward mobility, that you might, for 
example, in high school begin to start concentrating on 
developing an expertise in the aging field, continue it at 
perhaps a community college, and one day look at, you know, 
being an administrator of a facility.
    But I would be interested, particularly from a rural 
viewpoint, what your experience has been in terms of getting 
qualified workers and whether you have any suggestions for the 
Congress about how to address it?
    Mr. Southerland. I think, Senator Wyden, your example is a 
very good example as far as scholarships are concerned. The 
problem exists in rural areas and large cities; it exists 
everywhere. It is actually a critical situation.
    I personally have tried to deal with certain bonuses for 
employees for attendance, for staying an extra shift, something 
like that, so that we have qualified folks on duty. It is a 
problem, but I think the problem obviously is they need more 
reimbursement, they need more dollars per hour. That is one 
issue.
    At the same time you are exactly correct, we need to make 
that position, that caregiver or attendant position, the person 
that is responsible for the care at the assisted living 
facilities, more something to be sought after. Right now it 
typically is not. We need to put a great deal of importance on 
those positions. They need to be like electrical engineers or 
aeronautical engineers. It has got to go to that level, and I 
think that is one way that the industry could change. That is a 
hard situation. That is a hard thing to do, but I think your 
suggestion looking at the high schools is a very good 
suggestion.
    I know in Eagle where my son and daughters go to high 
school, they do have a class where they can actually get their 
CNA certification, and that is relatively new in high school. 
But it is a critical step toward a career in health care and 
hopefully in assisted living. So I think anything that can be 
done to make those areas more appealing and give them more 
significance is certainly warranted. It has to be done. That 
and additional dollars you can pay them hourly, I think, are 
two critical, critical issues.
    Senator Wyden. Let us let the consumers and the industry 
talk about it. Part of what I have grappled with is that I 
think the additional hours/the per hour reimbursement helps you 
in the short term, but I do not think you then develop a group 
of people who are going to see aging as a career where they can 
have upward mobility, which is why Dr. Kilby's point was so 
important.
    Dr. Kilby described what I have seen constantly in the 
aging field is that the people you see today and you get 
comfortable with aren't the people you are going to see 10 days 
later. If we are going to really develop this core of people in 
this country who are going to have a reason to stay in the 
aging field, there is going to have to be an advancement path, 
a path that suggests that if you start at the entry level in 
assisted living that you are going to have a chance to get down 
the road and be the top dog.
    And would the industry or consumer folks want to comment on 
your ideas on the worker shortage?
    Ms. Love. There was a wonderful suggestion or comment that 
Dr. Kilby made earlier that I think hits to the heart of 
things. She mentioned that in her particular home, because they 
weren't full, that the company had made the decision to 
decrease the direct care workload by essentially 20 percent, 
one day a week.
    Now, I think that would be very difficult for me to absorb 
a 20 percent increase, and I make a little more than $7 or 
$7.50 an hour. To do that to a direct care workforce is a 
tremendous trauma and you end up then losing those workers 
because they have got to go somewhere else where they are 
guaranteed full-time work.
    So there are, I think, some things that can be done, you 
know, right at the face value of keeping workers on board, 
incentives for them to stay. I love your idea, Mr. Southerland, 
of bonuses, and discussion, Senator Wyden, about looking at 
this in high schools and community colleges, because that gives 
individuals coming up in the ranks sort of something to aspire 
to, something to be interested in learning about. So thanks for 
bringing it up.
    Ms. Thompson. I think the answer to our workforce shortage 
is working with this population must be seen of value in the 
culture, and the culture has not, to this point, seen it really 
as a valued position, and the place to start is in school.
    In our company, as small as it is, when we identify a staff 
person who comes in at that entry staff level and appears to 
have the heart, as part of their evaluation process, they are 
given the opportunity to go to the local community college and 
gain an LPN license, if that is their choice. That has been a 
very successful program for us to stabilize our little 
operations, as has bonuses for something as simple as one's 
attendance everyday. That has been very successful strategy.
    But I think you are right, Senator Wyden. We must 
particularly in the next decade create a culture in which 
service to this population is of value in the culture or we 
won't create in our caregivers the heart that it does require 
to do this work everyday.
    Senator Wyden. The chairman is back and he has given me a 
lot of time. I think this has been an excellent hearing, an 
excellent panel, and I am really hopeful that somewhere down 
the road, people will look back at this hearing and say that 
this really played a role in coming up with the kind of 
solutions that folks tried to think about with the nursing home 
industry 25 years ago.
    The fact that the two of you have said that there is some 
common ground that we can find--the chairman was out of the 
room, but we talked about an approach involving the consumer 
groups, the industry people, researchers in the field, working 
on a model state statute addressing the issues that you talked 
about both with respect to consumer protection and disclosure 
and perhaps giving the States a period of time to in effect 
meet those standards, and then if the States did not do it, 
then there could be some consequences and we could look at what 
those consequences ought to be.
    And the fact that Ms. Love and Ms. Thompson on behalf of 
their organizations are willing to work together--there were 
certainly no fisticuffs at this table, and quite the opposite, 
there was an awful lot of willingness to work together--
encourages me, and that is what we are going to need to have.
    I mean the industry, for example, I think is right with 
respect to trying to make the waiver process, you know, easier, 
but as we make the waiver process easier and there are Federal 
dollars available, consumers have a right to say that there are 
going to be certain consumer protections accompanying those 
waivers.
    So I think there has been a very constructive hearing and 
just look forward to working closely with all of you and thank 
you for the extra time, Mr. Chairman.
    Senator Breaux. Thank you, Senator Wyden. I think that I 
would echo that it has been an informative hearing and we thank 
all of you for coming and being with us. I know it has been 
difficult for some of you to be with us, and we appreciate it 
very much.
    I think that the two things that stand out in my mind is 
how do we afford this type of long-term care for American 
citizens? We have not answered that problem. I mean it is a 
very expensive, no matter how efficient the delivery system is, 
this is very costly. And it is unfortunate that right now the 
only assistance from a Federal level is that you have to become 
so poor as to be eligible for Medicaid which doesn't cover all 
States and that is a real problem.
    We have introduced legislation to provide Federal tax 
credits to people who purchase long-term care insurance, which 
is, I think, a way to help get more people involved in planning 
for the time in their lives when they will need some type of 
long-term care. Just as we prepare today for having 
unfortunately maybe to go to an emergency room, Americans need 
to be preparing for a time when they may need to have help 
financially through insurance to provide for long-term care for 
themselves and for their families. And we are trying to move in 
that direction, which I think is very important.
    And the second thing that strikes me is that the standards, 
what are they going to be? Are they going to be State 
standards? Are they going to be local standards? Are we going 
to have 50 sets of rules and standards for assisted living 
facilities? Or is there a way to have a national standard that 
is enforced on a local level to make sure that when we treat 
these people, that everybody involved is at least meeting 
minimum standards with regard to quality of service that is 
being provided, particularly if tax dollars are going to be 
utilized in helping to pay for it? I think that something along 
these lines is needed.
    I think this has been helpful. I want to make sure that if 
we come back in 2 years, that we have made some real progress 
in this area. And I think that we need to use the time between 
now and next hearing to be more involved in trying to move in 
that direction rather than less involved. So I thank all of you 
very, very much for being with us. This will conclude this 
hearing.
    [Whereupon, at 10:55 a.m., the committee was adjourned.]




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