Current and Future Trends in Long-Term Care

The long-term care industry first developed in response to the need for efficiency and economy of scale for those needing health care beyond the acute care setting and those providing the care. Long-term care facilities began as poor houses and religious care homes in response to the need for care of the elderly and infirm. Following the addition of Medicare and Medicaid as payer sources, the long-term care industry exploded. Anyone could start a nursing home if they had the money and the building to house the patients. Nursing homes were first developed to replicate the acute care setting and were often attached to the acute care setting with physicians as the administrators. As for-profit entities entered the long-term care arena, the nursing home became freestanding and without the medical connection to a specific hospital or physician group. The development of assisted living facilities provided another avenue to break into the long-term care market and make an even greater profit than was realized in the nursing home setting. With the majority of assisted living facilities only private-pay, the profit margins grew, creating an environment of growth and expansion.