Can Better Outdoor Environments Lead to Cost Benefits in Assisted Living Facilities through Increased Word-of-Mouth Referrals?

Article excerpt

Abstract

Objective: This study explores how better outdoor environments may produce cost benefits for assisted living providers by raising occupancy levels through increased resident satisfaction and word-of-mouth referrals.

Background: Older adults who spend even minimal time outdoors may reap substantial health benefits. However, many existing outdoor areas in assisted living facilities are reportedly underutilized, in part because of design issues. Providers may be more willing to improve outdoor areas if they produce cost benefits for provider organizations.

Methods: This study used data from a recent assisted living survey to assess the relationship between satisfaction with outdoor spaces, time spent outdoors, and resulting improvements in mood. A financial analysis was developed to estimate potential benefits from improved outdoor areas attributable to increased occupancy and decreased marketing costs associated with increased word-of-mouth referrals.

Results: Increasing resident satisfaction with outdoor areas (from approximately 29% to 96%) results in residents spending more time outdoors (increase of 1½ hours per week per resident) and improved psychological well-being (12% increase in feeling better). This greater overall satisfaction leads to 8% more residents willing to refer potential residents to their community. Because word-of-mouth referrals by current residents are a major factor in resident recruitment, improving outdoors areas leads to an estimated 4% increase in new residents, resulting in over $170,000 of increased revenue per year for a community of 100 residents.

Conclusions: Improved outdoor space can provide substantial cost benefits for assisted living providers. Increasing resident well-being and satisfaction, and thereby generating additional word-of-mouth referrals, can result in higher occupancy levels.

Keywords: Outdoor environments, assisted living, cost benefits, resident satisfaction, occupancy levels, seniors, rental income, word-of-mouth referral

Introduction

The Growing Importance of Supportive Environments for Seniors

In 2011, the first post-WWII baby boomers turned 65, marking the beginning of the largest population explosion of older adults in U.S. history. The number of persons aged 65 and over is projected to increase from the current level of 40 million to about 72 million by the year 2030, according to the U.S. Census Bureau (Figure 1). Over the coming years, it is expected that increasing numbers of supportive residential facilities will be needed, because of the continued decline in health and functional ability that typically occur during the aging process.

Assisted living is a residential option that has grown rapidly in the past few decades as an appealing alternative to nursing facilities, partly because it places greater emphasis on homelike atmosphere and personal autonomy for older adults (Regnier, 2002). The popularity of the recent "culture change" movement demonstrates the increasing preference of the new wave of consumers for "person-centered" environments that emphasize quality-of-life issues (Koren, 2010). With an average length of stay of nearly 2½ years (Adler, 2009), the quality of the physical environment in assisted living has a powerful long-term influence on the lives of residents. Because many residents spend most of the day, nearly every day, in the same facility environment, to a great extent this environment determines what residents are (or are not) able to do, during a significant portion of the remaining years of their lives. For this reason, it is of paramount importance to adequately support the basic functional and psychosocial needs of residents, and make certain that no major requirements are overlooked.

The Health Value of Outdoor Environments

Even in facilities that conscientiously strive to provide a supportive environment, one important need of residents that is often overlooked is the opportunity to be able to spend time outdoors in safety and comfort. …