Minimal Standards

     Most of us believe that the "market" pretty much keeps our world in order... as exampled, is my personal "skill set" marketable, does my supermarket offer fresh sockeye salmon, is there a local board certified orthopaedist, etc.  Raw capitalism holds that this "market" should mediate virtually every choice.  A more liberal sense is that "fragil persons" should be exempt from market competition. 

     I own an Assisted Living Facility (ALF).  I have owned many Skilled Nursing Homes (SNF's).  More than 1.5 million Americans live in SNF's and 900,00 live in ALF's.  SNF quarters and services are regulated by goverment agencies, but most ALF's are controlled only by the "market".  In general, how the 2.5 million divide, by facility type, is according to their status on the fraility hierarchy spectrum, i.e., "low frail" live ALF and "high frails" live SNF, albeit that "financially poor" is the dominant attribute of "high frail". Yes, it is not woke to point out that advanced seniors without financial resources to pay for ALF residence commonly have following generation children who also do not have resources to secure the well-being of their parents, and therefor default to the government funded SNF's.  We know it but don't say it. 

     Historically there has been a wide gap in the quality of life experienced by the 2.5 million communal living advanced age seniors.  Residents in SNF's, have always been heavily reliant on government supervision to insure there well-being.  Historically the success of the government supervision has been at best minimal, and sadly in many instances counterproductive. Both for-profit and non-profit SNF providers expend far to much resources patronizing government inspectors and far too little resources caring for residents who have no market options.  ALF residents, to the contrary, have historically had marketplace competition to provide assurance that they likely were receiving "well-being value" for their "private funds" payment.

     Regrettably, in recent years, "the market"  has lost much of it's potency in assuring that "low frail" seniors are properly cared for.  My sense is that today's ALF living seniors, albeit frail, are at the very high end of the age scale.  It is not uncommon to see ALF communities with active/mobile residents who at average are 90+ years of age.  Many are functional but not discriminating about their services received and their children are of sufficient advanced age that they too are unable to function as discriminating consumers for their parent's complicated "lifestyle services".

     And so, therefore....we have become a nation with a million seniors who toiled and saved for 60+ years yet spend their last years in a "private-pay" care facility with little market pressure to provide benefits commensurate with often exorbitant residence charges.  

     In my home state, Missouri, ALF single residence charges average $3800 per month.  Think about this realistic example:  Mary and Bob married in 1968, bought a $50,000 house in 1975, made payments for 30 years.  Bob died in 2016.  Mary sold the house that year and deposited the $150,000 proceeds into a saving account at 2%.  After six years here savings balance was down to $100,000 after she had supplemented her $1300 monthly SS benefit with $1500 monthly from her savings.  Mary can now utilize her remaining savings to fund the $2200 shortfall between her SS benefits and her ALF residence fee.  She's good for about 4.5 years, unless her health requires that she live in a "skilled care" facility, in which case she will only be good for just over 2 years.   

     The sad summary is that the Marys" of America statistically have closer to 10 year life expectancy when they commence communal living.  In that most of there residence time time will be spent in a "skilled facility" paid by MoHealthNet, the State Medicaid program, after they have exhausted their private funds, well.......

     Mary and Bob should have sold their house in the earlier years of their retirement and used the proceeds for upscale vacations or charities.  Yes, Mary would have been a Medicaid Beneficiary for an extra couple of years, but there would have been little difference in Mary's life style.