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

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 1 1/2 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.