The Economic Impact of Assisted Living

A report in the January/February issue of Assisted Living Executive from the Assisted Living Federation of America gives some interesting insight into the impact the industry has on our nation’s economy. The report is based on a recent study by Moore Diversified Services.

The study notes that “assisted living comes in many shapes and sizes,” as we all know. But as you read the number below, it is important to note that for the purposes of the study, Moore Diversified Services focused on larger assisted living facilities. The researchers defined a “typical” assisted living facility as one with a capacity of 80 residents. As a result, numbers like average occupancy, total number of facilities, and annual revenue are not applicable to small residential care facilities, such as the common 6-bed facility.

With that said, the study found that “the economic impact of assisted living on both the local and national economy is clearly substantial”; a finding supported some impressive financial numbers:

  • Estimated number of assisted living communities (that fit the study’s “typical” profile): 10,500 – this is a very conservative estimate
  • Number of resident units at an average of 80 units per community: 840,000
  • Average occupancy rate: 93%
  • Average monthly services fee: $3,550
  • Typical annual revenue: $3.2 million
  • Total annual gross revenue for the industry: $33.1 billion
  • Total employment: 420,000 jobs (FTE equivalents)
  • Total annual wages and salaries: $10.6 billion

While all of these numbers are noteworthy, it is assisted living’s annual gross revenue of $33.1 billion that helps define the substantial impact the industry has on our nation’s economy. According to the report, this makes assisted living “the 47th largest business economy in the country”; nearly equivalent to the total economy of the state of Montana.

To read the full report, including a complete discussion on how the industry affects local and national economies, pick up the January/February copy of Assisted Living Executive from ALFA.

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