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A piggy bank bobs in the water.

You might call it collateral damage or simply the tipping point for an already fragile industry, but COVID-19 is pushing assisted-living facilities around the country to the brink of bankruptcy, threatening to narrow the housing options for vulnerable seniors.

As Laura Ungar and Jay Hancock report in Kaiser Health News, the industry was struggling even before the virus struck. A building boom in recent years sparked fierce competition and left many companies heavily leveraged. The strong pre-pandemic economy and low unemployment forced facilities to raise wages to attract and retain staff. Some of the industry’s major players had been forced to sell off assets amid rising financial losses.

Dallas-based Capital Senior Living reported losses of $36 million in 2019; it has seen its stock plunge by 80 percent since February. Fewer than half of its 121 facilities boast occupancy levels of 90 percent — a benchmark for profitability. As one investor put it during a recent conference call with company executives, facility closures seem imminent. “Is there a certain rule of thumb,” he asked, “where if occupancy hits a certain point you just say ‘Hey, let’s just shut down this facility, because we’re just going to lose too much money?’”

The virus, of course, has crashed the economy while revealing the industry’s often-lax quality of care. There are more empty rooms, as fewer elderly can afford a monthly rent that averages $4,000, and potential residents who can afford it are understandably wary of facilities that may lack the staffing and personal-care guidelines necessary to protect them from infection. Assisted-living facilities are not subject to the stringent federal regulations that govern nursing homes.

“We have a patchwork of regulation,” Robyn Grant, director of public policy and advocacy at the National Consumer Voice for Quality Long-Term Care, told KHN. “In some states, you have more robust protections. In some they are weak and inadequate. For residents, it is the luck of geography.”

And with these facilities in lockdown mode, routine oversight by long-term care ombudsmen and family members is no longer feasible, further heightening anxiety and depressing occupancy rates. “We know when family and friends are visiting, they’re monitoring, seeing the condition of their loved ones,” Grant explained. “They are now without those additional ears and those additional eyes.”

It’s a bleak picture of the future for what was once a thriving industry, one that clearly threatens to limit the options for the elderly and their loved ones who looked to it as an appealing alternative to the nursing home. We can only hope that, when the pandemic finally passes, the heightened scrutiny of practices at these facilities will lead to better government oversight — and a safer, more livable home for the elderly.

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