Is Your Assisted Living Community For-Profit or Nonprofit?

Posted by Otterbein SeniorLife on Apr 6, 2021 4:20:05 PM

Are residents of assisted living facilities forced to leave their homes when they run out of money? Are a facility’s policy decisions based on bottom-line financial results or what’s best for the residents? Answers to those questions could depend on whether the assisted living community is a for-profit or nonprofit organization.

Private, for-profit companies operate more than 80 percent of residential care facilities in the United States. The remaining communities are either nonprofit or government-run organizations.

When it comes to overall care quality, there are often meaningful contrasts between for-profit and not-for-profit assisted living communities. Knowing those differences can help you select the community that best meets your or your loved one’s needs.

For-Profit Assisted vs. NonProfit Living Communities

Large national chains or private equity investors own approximately 40 percent of for-profit assisted living facilities. As profit-driven organizations, those companies usually have return-on-revenue requirements that promote aggressive cost-cutting. Case in point: the five largest U.S. chains maintain significantly lower staff-to-resident ratios than the national average. Also, it’s no coincidence that facilities that report the highest profit margins receive the most inferior quality ratings.

Just as declining quality and understaffing are significant problems among for-profit residential care facilities, unethical business practices are another growing concern. In recent years, the U.S. Department of Justice has charged several residential care giants with fraud—for methods ranging from providing unnecessary services to billing for services that they never delivered.

Of course, nonprofit communities must also control their costs and conduct business ethically. However, spared from shareholder pressure to increase profits, not-for-profit organizations are free to innovate. As a result, nonprofits are driving change in assisted living—creating home-like, family atmospheres where residents are free to make personal choices every day.

Assisted Living at Otterbein SeniorLife

As a nonprofit organization, Otterbein SeniorLife can promise to provide our residents with necessary financial support. Donations go toward our residents, as well as those who can no longer pay for their care.

Whether you’re considering a nonprofit or a for-profit assisted-living community, quality of care should be your primary benchmark. The next blog is a good place to start— showcasing the top tips for starting your research on assisted living communities.

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Topics: Assisted Living