Assisted Living Facility SWOT Analysis

As people get older, they frequently need the services of an assisted living facility in order to assist them with caring for their day-to-day needs. As one of the primary strengths for an assisted living facility, there are always going to remain in demand in the economic climate. As more and more people from the baby boomer generation reach their later years – these services are expected to explode in demand. In fact, many economic studies point to the fact that there will be 5% year on year growth over the next 20 to 30 years. The barriers to entry for a new assisted living facility the are considered to be pretty high. This is due to the fact that startup costs can easily go over $1 million if real estate is going to be purchased in conjunction with providing assisted living services. Additionally, a number of specialty healthcare professionals need to be on staff at all times to assist residents. These professionals include medical doctors, nurses, certified nursing assistants, and related personnel that are properly trained on how to deal with geriatric patients. One of the other key strengths for an assisted living facility is that they are able to generate income from resident payments, publicly funded healthcare systems such as Medicare and Medicaid, as well as private insurance companies from time to time. However, it should be noted that some assisted living facilities are receiving steep declines in the amount of reimbursement they receive from both publicly funded healthcare systems as well as private insurance companies. This trend is expected to continue for a significant period of time. However, many patients that require assisted-living are able to tap personal resources for these expenses.

One of the primary weakness is associated with an assisted living facility is the high operational cost. Again, a number of highly trained professionals need to be on staff in order to ensure that residents are properly cared for. Additionally, insurance costs are very high given that there is the risk of medical liability when working with a president. However, provided that the staff remained within the letter of the lot out at all times – this risk is somewhat ameliorated.

For opportunities, most assisted living facilities companies will expand their operations by establishing ongoing locations. Additionally, many of these businesses frequently come on the market for sale. As such, these businesses can be easily acquired and integrated into an existing marketing infrastructure. Once a business reaches 100% occupancy for their initial assisted-living facility there’s really not much that can be done in order to boost revenues outside of establishing new locations. However, some assisted-living companies have taken to providing outsourced nurses to patient homes.

For threats, as an assisted living facility is a healthcare focused business – changes in healthcare registration, regulation, and legislation can have an impact on the profit and loss statements associated with these types of companies. Most importantly, changes in Medicare and Medicaid reimbursement policy may have an impact on assisted living facilities and provide specialized services that are paid for by the federal and state governments. It should be noted that this is a risk faced by all healthcare businesses, and there’s really not too much that an assisted-living company can do in order to ameliorate these risks. This is expected to be an ongoing and contentious issue as more people from the baby boomer population require assisted living facility services.

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