When I was a young reporter starting out, I couldn't buy a house to save my life. My wife and I joked that, as perhaps the only renters in Upper Nyack, New York, we had to keep a low profile! Neither of our families had any money, and there was no way we could afford a 15% to 20% down payment. The only thing that saved us was a transfer to Washington, D.C., where no-down-payment Veterans Administration mortgages were common coin (unlike in New York) and my three years' Army service finally “paid off.”
I relate this “poignant” personal history only because it resonates when I hear from our friends in long-term care financing that lenders and investors are “going back to the old days” in evaluating prospective borrowers in the field. They're espousing conservative values, i.e., “The more established providers are, the better it will be. The more modest their programs—renovation instead of building new, for example—the better their chances for financing.” And the cost of that capital will be rising steadily and inexorably for some time to come.
This brings to mind a couple of other developments we're seeing, not so much related to long-term care, but expressive of what I'm seeing as new conservative values. For example, we are suddenly learning that our nation's infrastructure is in need of major overhaul before it rusts, crumbles, collapses, and otherwise fritters away. We now propose to spend mega-billions to restore it (which really isn't wild government spending; it's an investment in the tax base that should pay back, although budget cutbacks and higher taxes are definitely in prospect someday). But just when were we going to get to these repairs otherwise? Why has it taken apparent economic catastrophe to set us on this common-sense course?
Alternative energy is suddenly getting big press, with bold ideas such as transforming much of Lake Erie's shoreline (which is a stone's throw from our offices) into a massive wind-powered generator. I have to wonder where we'd be if we had been sensibly serious about this sort of thing 30 years ago when our vulnerabilities to oil dependence first became obvious. Would our armed forces be anywhere near Iraq or Saudi Arabia if it weren't for oil?
All of which is to say, we're returning to real conservative values now—values of prudence and common sense. Too bad we're doing it the hard way. No matter, the players in long-term care need to establish their “A” game now for the tough challenges that lie ahead.
Richard L. Peck, Editor-in-Chief
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Long-Term Living 2009 January;58(1):8