Anchorage long-term care costs top in nation

Tegan Hanlon

Costs at Anchorage's nursing homes and assisted living facilities are some of the priciest in the country, while hourly rates for home health aides and nurses align closer to the national average, according to a recent survey.

The survey, by the New York Life Insurance Company and Univita Health, collected rates across 135 regions for an array of long-term care options. In two of three types of long-term care -- nursing homes and assisted living facilities-- Anchorage placed in the top 10 costliest markets.

Health officials pinned the pricey dollar figures on steep administrative costs, strict regulations and the tiny size of many "mom and pop" assisted living facilities that can't capitalize on economies of scale. Anchorage has two nursing homes and 409 assisted living facilities for the elderly and disabled, most of them five beds or smaller, according to state data.

"Once you hit six beds or more, additional requirements kick in," said Craig Baxter, the state's residential licensing program manager. "You need a much larger facility than a house in the neighborhood."

The state defines an assisted living home as a residential facility that either serves three or more adults who are not related to the owner, or that receives state or federal payment for services, he said.

According to the survey, a one-bedroom in an assisted living facility in Anchorage was priced at $5,657 a month in 2013, about 37 percent above average. A private unit in an Anchorage nursing home costs $430 a day, 64 percent above the national average, the second highest rate in the country.

At the state-owned Anchorage Pioneer Home, where care is sometimes available for less than the market rate, people 65 years or older must sit on a lengthy waiting list before moving into the assisted living facility. The staff ranks its residents based on the level of care they need, from less care, level one, to most care, level three. Cassandra Lynch, admissions coordinator, estimated that wait time for someone needing level one or two care may stretch on for about a year. Level three is longer.

She said level one care costs $2,350 a month, level two costs $4,260 and level three costs $6,170 a month. All prices are set by state regulation. The Anchorage Pioneer Home is one of six state-run facilities in Alaska and provides financial assistance to those who cannot afford care, said Rich Saville, the administrator at the Anchorage facility.

"I don't have a good grasp on how our costs compare to the other assisted living homes," he said. "When I was in licensing I saw contracts anywhere from $2,300 to $7,000 and $8,000 a month."

Dennis Murray, the senior program officer with the Alaska State Hospital and Nursing Home Association, once ran a long-term care facility in Soldotna. Murray said his largest cost drivers were construction -- the facility made mortgage debt payments of about $33,000 a month. The next largest drivers were worker's compensation and health benefits.

"When you look at those construction costs, they are much more than others, particularly in health care," he said. "That will help you understand why the high cost per day, because the bed has to be amortized."

Karen Perdue, the president of the Alaska State Hospital and Nursing Home Association, said that the state's long-term goal is to cap nursing home growth and expand in-home services. The movement began about 25 years ago, she said, prompted by a number of factors including the high cost of a long-term care bed.

According to the New York Life Survey, the average cost of in-home services hovers closer to what residents pay in other states. A home health aide in Anchorage is $26.38 per hour, about $5 more than the national average; a registered nurse costs $81.22 an hour, about $15 more than average; and a licensed practical nurse costs $55, slightly above the average of $51.47.

The disabled and elderly people who qualify for Medicare can receive assistance for long-term care. In 2012, the state of Alaska funded long-term care services for 44,711 elderly and adults with disabilities at a cost of $476 million, according to a 2013 report by the state's Department of Health and Social Services. Thirty-eight percent of the recipients were elderly, while the majority qualified because of disability. The state expects the proportion of senior recipients overtake those on disability by 2034, the report said.

"Our senior population is growing at a very fast rate," Perdue said.

"We are seeing the need for nursing beds, more nursing beds, as well as more service growth."

Reach Tegan Hanlon at or 257-4589.