This industry classification consists of establishments that provide residential social and personal care for children, senior citizens, and special categories of individuals with some limits on ability for self-care, but where medical care is not a major element. Included are group foster homes; halfway group homes; homes for the physically and mentally disabled; homes for the elderly; juvenile correctional homes; rehabilitation or residential centers; and children's boarding homes. Boarding schools providing elementary and secondary education are classified in SIC 8211: Elementary and Secondary Schools. Nursing homes and other providers of health-related personal care are classified in SIC 8051: Skilled Nursing Care Facilities, SIC 8052: Intermediate Care Facilities, and SIC 8059: Nursing and Personal Care Facilities, Not Elsewhere Classified.
623312 (Homes for the Elderly)
623220 (Residential Mental Health and Substance Abuse Facilities)
623990 (Other Residential Care Facilities)
Facilities of many different types fall into the general category called residential care. The types of establishments in this classification include children's homes, rehabilitation facilities, group homes for people with a variety of limitations, halfway houses, and rest homes for the aged. For some segments of this industry, business has been booming in recent years. The market for space in retirement homes, for example, has expanded greatly due to the aging of the American population. Residential drug and alcohol treatment centers are overflowing. Orphanages have also been experiencing increased residency over the last several years. According to the U.S. Census Bureau, 10,869 establishments generated $9.4 billion in revenue in 1997.
Collectively, long-term care (LTC) facilities make up a multi-billion dollar industry in the United States. Long-term care industry forecasts are difficult to make because of continuing changes in federal and state legislation. In recent years, more than a dozen major long-term care companies and nursing facilities (containing more than 2,000 beds each) have been purchased by larger operators.
There are millions of people living in the various types of nursing homes and retirement communities that provide residential care for the elderly in the United States. The number of facilities continue to grow as America's population ages.
A broad range of residential care options exists for the elderly, making it possible for a client to choose a facility that is well-suited to his or her needs, both physical and financial. Traditional nursing homes provide continual shelter and 24-hour medical care for their elderly residents, who are unable to independently care for themselves. Nursing homes provide their residents with on-site meals and constant physical care, including assistance with bathing, grooming, and dressing. Nursing homes also often provide their residents with on-site social activities.
Retirement centers, increasingly referred to as assisted living communities, are designed for persons who are unable to function in an independent living setting, but do not need daily nursing care. In the late 1990s, there were approximately 10,000 assisted living communities housing more than a million residents. Assisted living communities generally assist with bathing, dressing, housekeeping, and meals. The amount of help provided depends on individual need. Retirement homes offering assisted living can be considerably more affordable than nursing homes, primarily because 24-hour medical care is not required. The cost can range from $1,000 to more than $4,000 a month, about 30 percent less than the range for licensed nursing home care. Unlike nursing homes, however, most assisted living is not covered by private or government insurance. Independent operators and corporations in related industries such as hotel management are prevalent in assisted living.
Continuing-care retirement communities (CCRCs) are apartment complexes designed to meet the specific needs of the elderly, providing meals, social services, health care access, and sometimes housekeeping. CCRCs provide a somewhat higher degree of care than retirement centers, though health care is still secondary in these facilities. In the United States, there are about 700 CCRCs, housing more than 200,000 residents. Continuing care retirement communities offer seniors long-term contracts that ensure lifelong shelter and access to certain health care services. CCRC residents are able to enjoy an independent lifestyle with the knowledge that if they become sick or disabled, their needs will continue to be met. Residents usually pay an entrance fee and regular monthly payments for this service. Depending on the contract, the entrance fee may or may not be refundable. Most CCRCs enact requirements for incoming residents based on age, income level, financial assets, and physical health and mobility. Generally, residents are expected to move into the community while they are still fully able to care for themselves. Not-for-profit organizations, such as hospitals and religious groups, sponsor about 95 percent of the CCRCs in the United States.
Nearly two-thirds of drug and alcohol rehabilitation facilities, including outpatient and hospital programs not primarily engaged in the residential care industry, are privately owned, nonprofit operations. These institutions treat about 60 percent of the industry's substance abuse clients. The next largest segment consists of facilities run by state or local governments. These account for about 16 percent of rehabilitation operations, but treat nearly 25 percent of the industry's clients. The remainder of facilities are either privately-owned for profit (16.5 percent) or run by the federal government. The largest share of financial support for treatment services came from private third-party payers, such as HMOs and Blue Cross/Blue Shield. State governments contribute about one fourth of the industry's total funding. Only about 12 percent of funding comes from fees paid by clients.
Juvenile facilities make up another large block of institutions providing residential care. A steady rise in youth crime has led to an increasing demand for juvenile treatment services and providers who are qualified and experienced in serving troubled youth. The juvenile facilities segment of the industry, however, includes not only detention centers for delinquents, but also shelters, training schools, camps, ranches, and group homes.
Residential care for the mentally retarded and developmentally disabled has undergone a qualitative change since the 1970s. The shift has been away from large state institutions toward smaller, more flexible community-based group home settings. The number of residents in large state-operated institutions has shrunk by more than half since the late 1960s. Meanwhile, the number of people in facilities with less than 15 residents tripled during the 1980s and continues to rise. Numerous mental health professionals now consider group homes to be the most favorable residential environment for the mentally retarded. Throughout the 1990s, group homes had more than 100,000 residents nationwide, plus waiting lists with tens of thousands of additional names.
Orphanages. Each type of facility that is a part of the residential care industry has a distinct history. Orphanages, for example, have a history that is centuries old, as well as a brutal reputation based on Dickensian tales of squalor and abuse. By the 1970s, a large percentage of the bigger group homes had closed amid a flood of lawsuits and allegations of abuse and neglect. By the 1990s, however, orphanages began to reappear, as the need began to outdistance the availability of home-based foster care. The Hollywood-generated reputation of facilities such as Boys Town is somewhat more positive than that of the ordinary orphanage. Boys Town, which went co-ed in 1979, was founded by the legendary Father Flanagan in 1917. Located outside of Omaha, Nebraska, Boys Town covers 1,300 acres and has its own school, fire department, and zip code.
Residential Care for the Mentally Retarded. A history of poor conditions has also lead to great changes in the residential care of the mentally retarded. Historically, these individuals were not distinguished from insane or violent people, and therefore residential care resembled incarceration more than housing. The shift toward group homes began in the early 1970s as a reaction to growing dissatisfaction with the care that was being received in large institutions for the mentally retarded and developmentally disabled. Around 1972, lawsuits were brought in more than a dozen states, including New York, Illinois, Pennsylvania, and Texas, to protest the lack of adequate care in these facilities. As a result, scores of large institutions have since closed. The strongest resistance to the group home concept has come from the residents of neighborhoods that have been proposed sites for group homes. Some labor unions have also expressed concern, since many group home programs include vocational training that puts residents into competition with the unions for jobs.
Residential Care for the Elderly. The emergence of different levels of residential care for the elderly is a relatively recent phenomenon. Until the last few decades, nursing homes were the only option for those who could no longer care for themselves completely independently. CCRCs began to appear around 1960; however, they did not become common until the mid 1980s. In fact, about 80 percent of the CCRCs currently in existence opened between 1985 and 1989. Not surprisingly, this rapid expansion did meet with some resistance from nursing home organizations. Among the states, Oregon has been at the forefront of the movement for alternative housing for the elderly. In Oregon, several group homes, whose funding is aided by the state, house more than a thousand residents who might otherwise be in nursing homes. Most of these group homes are privately owned and licensed by the state.
The current conditions of the residential care industry reflect the differing funding sources of its various segments. Although the demand for residential care seems to be increasing across the board, only those facilities funded through private investment seem able to meet the demand. Those relying on government funding are struggling with ways to meet the needs of their clients with the limited resources available to them.
Rehabilitation Facilities. Since the early 1990s, rehabilitation centers have been experiencing particularly strong growth. A number of large, multi-unit, investor-owned facilities have emerged. Several of the most successful rehabilitation chains have expanded through joint ventures with hospitals and nursing homes. At the same time, drug rehabilitation facilities run by public agencies are in crisis. Funding for public agencies has been frozen, and in some cases is being decreased, while the number of people seeking treatment in these facilities continues to increase.
Facilities for Children. Orphanages and other residential care for children is another area in which demand is skyrocketing, although very few of these facilities are run for profit. The main reason for the increase in this type of facility is the lack of space in foster homes. At the turn of the twenty-first century, an estimated 520,000 children were in foster care, 117,000 of whom were eligible for adoption. That year, there were about 1,000 group homes for children in operation. The AIDS epidemic has created a special need for abandoned children who have AIDS or HIV, or are born with a drug addiction. Residential care for parentless children can take a variety of forms, from the sprawling Boys Town, to home-like settings that house an average of eight children.
Facilities for the Elderly. Residential care for the elderly is an area that is expanding through the diversification of services offered. Advocacy groups estimate that as many as half of the residents in nursing homes could function adequately in facilities that placed less emphasis on medical attention. This fact, combined with the more rigid restrictions created by the National Nursing Home Reform Act of 1987 (passed to address the alarming increase in abuse cases), has led the emergence of a broad range of facilities that offer less intensive care. Residential care for the elderly is one segment of the industry in which both nonprofit and for-profit operations are well represented. As the elderly population is the fastest-growing segment of the American population, the need for residential care facilities is expected to grow. In 1997, 2,669 of these establishments generated $2 billion in revenue.
Res-Care, Inc. is the leader among facilities that provide residential care and vocational training for mentally retarded and developmentally disabled people, as well as at-risk youths. Res-Care was founded in 1974 and is located in Louisville, Kentucky. In 1999, the organization served more than 12,000 people with developmental disabilities and 8,400 youths in 10 states and Puerto Rico. Res-Care has more than 29,000 employees.
Five Acres, The Boys' and Girls' Aid Society of Los Angeles County is a nationally-recognized non-profit center for the prevention and therapeutic treatment of child abuse. It also serves as an educational facility for severely emotionally disturbed children. Founded in 1888 as one of Los Angeles' earliest orphanages, the Altadena, California-based agency served 1,037 children and 713 adults in 1999. Its services include residential treatment, a therapeutic school, emergency shelter, family group homes, a foster care program, in-home treatment and support for families in crisis, and deaf services programs for abused children. Their residential treatment program provides care and treatment for children ages 5 to 13 who have been removed from their homes by the courts because of severe behavior and emotional problems associated with abuse and neglect.
Sunrise Assisted Living, Inc., with 1999 sales of $255.2 million, was also a leading provider of assisted living for the elderly. Sunrise, founded in 1981, is a privately-owned company that operates more than 120 projects in 22 states. Most of the residents in these facilities live in independent apartments where fewer services are available.
According to the U.S. Census Bureau there were more than 240,732 employees working for this industry in 1997. Approximately one-fourth of all residential care workers are employed by state and local governments, mostly in public welfare agencies and facilities for mentally disabled and developmentally delayed individuals. Another fourth work in private social or human services agencies offering a variety of services, including adult day-care, crisis intervention, counseling, and group meals. Many of these workers supervise residents of group homes and halfway houses. Others are employed in day treatment programs, detoxification units, community mental health centers, psychiatric hospitals, and sheltered workshops.
In the mid 1990s, starting salaries for residential care workers ranged from about $13,000 to $20,000 a year. Experienced workers generally earned between $18,000 and $27,000 annually.
Jobs in this industry are expected to increase significantly through the year 2005. More community-based programs, supported independent living sites, and group residences are expected to be established to shelter and assist the homeless and the chronically mentally ill, as well as provide housing and services for the elderly, disabled, and families and children in crisis.
Caywood, Hershel. "Welcome to Nursing Home & Long Term Care Topics." Available from http://www.geocites.com .
Five Acres, The Boys' and Girls' Aid Society of Los Angeles County Homepage, 20 March 2000. Available from http://www.5acres.org/ .
Guide to Retirement Living Online Homepage. Available from http://www.retirementliving.com/main.html .
National Adoption Information Clearinghouse. "Adoption from Foster Care," 5 May 2000. Available from http://www.calib.com/naic/ .
U.S. Census Bureau. 1997 Economic Census — Health Care and Social Assistance. Washington, DC: GPO, 2000.
U.S. Department of Labor, Bureau of Labor Statistics. Occupational Outlook Quarterly, Spring 1996.
U.S. Department of Labor. Available from http://stats.bls.gov/ocooco2003.htm .
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