Profile of the 45 Survey Respondents

• Communities currently in rent-up 16
• Communities owned by a non-profit organization 13
• Communities that pay property taxes 7
• Median occupancy rate 83%
• Median number of units leased prior to opening 10 units
• Average number of months to lease up to 93% occupancy 16 mo
• Communities where marketing began prior to opening 9 mo
• Average annual turnover rate 13.8%
• Has a low income subsidy for qualified applicants 13

As Figure 1 illustrates, the average size of the Massachusetts Assisted Living residence is 44 units. This is small when compared to the national average of 58 units per resident and the northeast regional average of 73 units per residence. The reported size of the communities responding to the survey ranged from 7 to 115 unit totals. The total number of units represented in the survey responses is 3047. Of that number, 73.54% (or 2241) are Assisted Living units, 12.87% (or 392) are special care units and 13.59% (or 414) are independent living units (certified for Assisted Living).

Methodology
The information outlined in the following pages is presented in five measurement types; counts, sums, medians, percentages and means. Counts are simply the measurement of responses to a particular question, sums are the aggregate of those responses; and medians are the middle figures in sequentially arranged data columns, with half of the responses above the median number and half below. Medians were used to prevent a statistic from being skewed by a very high number or a very low response. Percentages of survey data is based on the total number of responses submitted for each individual question and means are arithmetic averages used to present data from the survey that is uniform. Throughout this report, the results of the survey responses of the Assisted Living residences in Massachusetts have been compared to national and regional responses obtained from a survey conducted by Coopers and Lybrand L.L.P., in 1996. The published report is named "Overview of Assisted Living Industry", 1996. The comparisons presented throughout this report are intended to serve as descriptive information, not as benchmarks or performance goals.

Outlined in Table 1 below is a breakdown of the 1,915 Assisted Living units represented in the survey results. The Assisted Living communities that opened before 1990 have the largest number of studio units. Communities opened after 1990 offer more one-bedroom units than studios and those opened after 1995 offer the greatest variety of unit types -- offering all of those listed in the table below.

Table 1

Unit Types	# of units	% of Total
Studio	878	45.9%
1- Bedroom	750	39.2%
1- Bedroom - den	103	5.4%
2- Bedroom	135	7.1%
Shared room / alcove	92	4.8%

Marketing
In addition to providing for personal, social and emotional needs of the residents, many Assisted Living communities ease the transition by locating the facilities in densely populated urban and suburban areas. Outlined in Table 2 and Table 3 are the distances that residents reportedly move from their home to an Assisted Living community, and the reasons why residents move from outside the area to a community.

Estimated % of how far a distance the Assisted Living residents moved from
within 5 miles	27 %
6 - 15 miles	35.3%
16 - 50 miles	27.8%
out of state	14%

It is likely that those who did move from out of state are among those who chose to move for other reasons as outlined in Table 3.

Table - 3

The most common reason why residents move to an Assisted Living community from outside the market area.
Children live in area	49.4%
Had lived in the area before and wanted to return	40.2%

Table - 4

At the time of the lease signing, what are the financial requirements ?
First months rent	11%
First & last months rent	62%
Security Deposit	58%
Community / Entrance Fee	58%

Table 5

Estimated % of how monthly fees are being paid by residents
Income	13.6%
Income / Assets	50.6%
Income / Family Support	8%
Income/ Assets/ Family Support	7.7%
Family Support	.78%
Unknown	19.32%

Table 6 *

Types of financial qualifications required by the community prior to move-in
Bank Statement	15.3%
Tax Return	13.6%
Verification of funds from an attorney	11.9%
Admission Application from the community	30.5%
Responsible party agreement signed by family member	61.1%
None	28.8%

* information outlined in this table includes duplicate answers from respondents.

Marketing Assisted Living services is different than marketing to other segments of the senior housing industry in that the resident is not usually the decision maker. In compiling the survey responses to the question of initial contact and referral sources, it is evident that few of the initial contacts were made by the prospective resident. The target market of Assisted Living services is the adult child and/or a health care professional in a position to refer a family member to an Assisted Living community. As illustrated by Figure 2, Assisted Living is a need driven service with the largest percentage of referrals coming from an audience of care givers and community health care representatives.

Resident Profile
Health and the ability to care for oneself can varies greatly within and between residences. Feedback from the respondents indicated that the number of ADL needs (Activities of Daily Living) of a resident at the time of admission ranges from 0 - 4 ADL's . Upon the first anniversary of the admission, that same person generally requires assistance with 2 - 5 ADL's. The average assistance with ADL's upon entering a residence is reportedly 2, with an increase to 3 one year later.

Table 7

Resident Profile
Profile	Massachusetts	Northeast Region	National Average
Single Female	77 %	79.4%	77.6%
Single Male	17%	20.6%	22.4%
Average Age	85.2 years	82.9 years	83.9 years
Married Couple	5%	2.1%	3.5%

Other characteristics of the Assisted Living resident related to the need for incontinence support, medication reminders and medication management. The average number of residents requiring incontinence support at facilities surveyed is 19.7%. For those requiring medication reminders, the average is 20.5%, and for medication management, the average is 53.5%. As figure 3 illustrates, the statistics for Massachusetts residents are lower than both the national and Northeast region averages. The difference, and seemingly under reporting, may be attributable to the on-going debate about medication dispensing in Massachusetts Assisted Living residences.

Approximately 24% of the Assisted Living units were identified as being wheelchair accessible. Of that number, only 5% were occupied by individuals needing handicapped accessibility. The majority of the respondents indicated that the number of handicapped accessible units was sufficient to meet the needs of the residents in their community.

As referenced on page 3, the average annual turnover rate for the period between June, 1996 and May, 1997 was 13.8%. Figure 4 identifies the three most common reasons for resident turnover, as compared to the national industry average. These averages correspond to the residents desire to age in place rather than move. Clearly, of those who moved, it can be concluded that the largest percentage required higher levels of care from increased acuity that led to hospitalization, the need for skilled nursing care, or death.

The national average daily rate for Assisted Living is $72.00, for the Northeast region, $110 per day. Although the survey did not address unit pricing, 32% of the respondents indicated that 1-2 residents had to move due to insufficient funds. Continued competitiveness and consumer driven demand for individualized service delivery will require residences to be increasingly creative in the design of optimal pricing structures.

Employees
The feedback received from the respondents on the issue of staff size were inconclusive given the limited sample size coupled with the fact that 36% of the communities are considered to be in rent-up. As a result, the information gathered on this question was considered to be inaccurate and the staffing responses were not included in this analysis.

Table 8

Percentage of residences that offer employee benefits by category
Medical Insurance	86.77%
Vacation Time	96%
Sick Time	84.4%
Dental Insurance	49%
No benefits	4%

Of the communities offering no benefits to their employees, a few (2%) of paid the highest hourly wages to CNA's, suggesting that pay may be offered in lieu of benefits.

Table 9

Number of hours needed to work per week to qualify for the benefits
16 - 24 hours	24%
24 - 30 hours	24.5%
30 hours	43%
36 + hours	8.5%

In thirty-one of the responding communities there is a waiting period of 90 days before an employee is eligible for benefits. The remaining communities required either no waiting period or in the instance of four respondents, there is a six month waiting period. The average employee contribution to the health insurance premiums is 80%.

Wages
The hourly wages of CNA's was fairly consistent among the responding communities, reporting an average hourly rate of $8.50. The overall range for a CNA wages was $7.00 - $12.00.

The Distribution of the salaries of the Marketing Directors and Executive Directors are outlined in below in Table 10 and Figure 5. All but one-third of the communities responding paid commissions to the Marketing Directors

Table 10

Salary distribution of Marketing Directors in the Communities surveyed
$30,000 - $40,000	53.3%
$40,000 - $50,000	33%
$50,000 - $60,000	7%
$60,000 - $80,000	4%

The largest wages appear to be offered by residences that contract out for personal care services, or are smaller communities and do not offer benefits. The conclusion on the wages indicates that there is great disparity among the communities surveyed for salaried personnel. Some of the disparity may be attributed to differences in the respondent's interpretations of job responsibilities, work setting, facility size, location (Metro Boston or Western Massachusetts), acuity of resident population and the years of service by an individual employee. This survey tool did not lend itself to these types of comparisons and will be addressed in a follow up.

Of those residences responding, 46.7% utilized contract services to conduct their day to day operations. Figure 6 illustrates the representation of the services contracted for and the distribution of use amongst the respondents.

Services

Personal Care:
According to the responses received, the amount of personal care needed by individual residents needing assistance with bathing, dressing, eating, ambulating etc. varies widely from one community to the next.

The average amount of personal care included in the monthly fee is 79 minutes. Several responses indicated that no personal care was included in the monthly base fee. Most providers (84%) indicated that their residents needed additional care over that which was included in the base fee amount. The average rate charged for additional personal care is .30 per minute, or $4.50 per 15 minute increment. The range for the added fees ranged from $0 - $.53 per minute.

Food Service
Of the communities surveyed, the responses on the food services available to residents are listed below.

• Three meals per day included in monthly fee 93%
• Median Food Cost per person / per day $6.00

($2.77-$12.00 range)

• Charge for guest meals 73%
  Breakfast: $2.52

Lunch: $5.19

Dinner: $9.43

An analysis of the responses indicates that larger communities tend to have lower food cost than the smaller communities. This may reflect economies of scale that result from greater savings in bulk purchasing and mass preparation. Seemingly, those residences identified as having "independent living" had significantly higher budgeted food cost. This likely reflects the need to offer greater hospitality - hotel style choices or coincidentally, due to difference in the interpretation of the question, may not reflect raw food cost, but also include the cost of service as well.

Ancillary Revenue
In response to the questions regarding ancillary revenue, respite care is by far the best option available to raise revenue. Respite care can provide a solid source of revenue and at the very least is an invaluable marketing tool for the community. Many residences will use vacant units for respite care; others set aside a limited number of apartments for respite care which are available at all times. Outlined in Table 12 below, 71.1% of the communities responding to the survey offered respite care. This is aligned with the national average of 68.8% and the Northeast region average of 79.4%.

The average number of respite care units in the communities surveyed is 2.13 with a median cost per day of $130. The range of daily rates reported by the survey respondents was $75.00 to $288.00 per day.

Although 86.36% of the communities had a hair salon on the premises, fewer than 13.6% received revenue from the service. There is no consistent pattern of the fees received from the hair salon, the options range from charging rent to splitting the gross receipts.

Fewer than 32% of the respondents had any other sources of ancillary income. Those with sources of ancillary income on-site identified those sources as adult day care, child care, gift shop and a dance studio.

Planning for the 1998 Survey
The results reported for 1997 provide very useful insight into the rapidly expanding Massachusetts Assisted Living Industry. The excellent response rate from operators in 1997 also means that the 1998 survey will build on a strong base of information that can be further refined and improved. At least two areas will receive additional focus in the future: staffing levels and contracted services. The staff and volunteers at Mass-ALFA welcome comments and suggestions for improving the 1998 survey process.