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Mini Business Plan: Alzheimer’s Care Unit

Product Definition

The product offered is an Alzheimer’s Care Unit for the Illini Restorative Care in Silvis, IL.  This will initially include 10 beds for Alzheimer’s patients in a specialized care facility designed to provide top-quality care and safety to these patients in a compassionate,  capable manner and in a supportive environment.  Patients in this center will have their care monitored by a Board-certified gerontologist, and will receive top-quality, evidence-based care. 24-hour security will ensure that the patients are kept securely at minimum risk to themselves.

Market Analysis

Currently no similar Alzheimer’s care facility exists in the area. Although there are other Alzheimer’s care facilities in the area, none offer the particular combination of expert gerontology services and special therapy programs proposed for this center. Also, the quality ratings of those competing residential facilities is only moderate at best, with nearly all scoring only 1 or 2 stars (out of 5) in local consumer rankings.  The proposed new Alzheimer’s Care Unit’s association with Genesis Healthcare with its extremely high reputation for superior service and quality care provides  a significant advantage in the market. The only highly rated Alzheimer’s facility in the area is in Davenport, IA, across the state line. That organization, the Kahl Home for the Aged, receives a 4-star rating, and is also associated with Genesis Medical Center in Davenport, a sister hospital to Illini Restorative Care in Silvis, where this proposed facility would be based.

Nearly one out of eight Americans over the age of 65 develop Alzheimer’s disease (Alzheimer’s Association, 2011, p. 12). The current population according to the 2010 U.S. Census in the Quad Cities metropolitan area (which includes Davenport IA, Moline, Rock Island, and Silvis) is approximately 380,000 and U.S. Census figures indicate about 12% of the population is 65 years old or older (“Population”, 2011). Thus, approximately 45,600 people in the metropolitan area are 65 or older, and about one-eighth of those, or about 5,700, can be expected to have Alzheimer’s.  Not all of these patients require 24-hour care such as being offered by the proposed unit, but with only a 10-bed facility, only minimal market penetration will keep it fully utilized.  Patients in this facility will be in late-stage Alzheimer’s, which can last as little as a few weeks to as long as several years (Alszheimer’s Association, 2010); thus, it is likely that a waiting list for admission will have to be maintained once the facility is established.

Detailed Operations Plan

The plan for the operation of this unit includes both the cost for converting the current space to Alzheimer’s units and providing appropriate special equipment for gerontological care. In addition, all staff to work in the unit will receive 8 hours of training on late-stage Alzheimer’s. A small marketing/promotion budget will announce the availability of this unit to the media and the public. Space will also be converted for activities, communal dining, and other appropriate functions. Operating costs include additional staff (1 FTE RN and 2 FTE aides).  In addition, the consulting gerontologist will be covered at 12 hours/week for monitoring patient status. Patient medications, etc. and other patient medical costs are paid for separately by the patient’s medical insurance or Medicare. Patients will be provided as much freedom to control their day and their environment as is consistent with the safety of themselves and other patients as well as consistent with the functioning of the unit.

The expected acceptable payment basis would include Medicare, Medicaid, and Long Term Care Insurance; these are the payment options accepted by the sister facility in Iowa. Medicare and Medicaid do not cover long-term care. Long-term insurance is required for coverage beyond Medicare’s hospitalization coverage.  Prescribed therapies are covered by Medicare. The unit is expected to turn a net positive revenue of about $81,300 in the first year. Thereafter, that revenue should increase, since start-up costs will not apply.