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58 3 Emergence of the Killer Application The seeds for the killer application had been sown in the 1970s with the nursing home scandals and subsequent regulatory pressures. Some nursing home developers chose to switch from the traditional nursing home business to the seemingly greater freedom, simplicity, and profitability of private senior housing and boarding homes. They entered a diverse, fragmented market that was scattered even further on the periphery of the twentieth century’s transformation of health institutions. Housing for seniors included homes for the elderly established by wealthy local philanthropists, fraternal lodges, and religious groups—remnants of the nineteenth century—as well as ma-and-pa private boarding homes developed in the late 1930s in the wake of the Social Security program that never made the transformation to nursing homes. These facilities were joined in the 1950s by the retirement communities of private developers in Florida and other locations that offered the promise of warmer winters and lower taxes. By the 1970s retirement developments like those in Florida had spread and began to dot the landscape on the suburban fringe of major urban centers. Low- and moderate-income elderly public and nonprofit housing developments, supported by Department of Housing and Urban Development financing and other public sources, began to add to this mix in the late 1960s. In the 1980s a curious mix of newcomers joined that diverse and disorganized market. They included freelancing real estate entrepreneurs from the early days of the publicly traded nursing homes in the 1970s. They were joined by individuals without any previous background in long-term care, including real estate developers of shopping malls and office buildings and those representing banks and investment interests. Perhaps most importantly, however, they were joined by missionary zealots motivated in part by their own personal experiences with the choices available to them in caring for an elderly relative. Convinced that they could provide better care at far less cost, they devoted their lives to doing just that. Emergence of the Killer Application 59 Toward the end of the 1980s, those seeking to gain a foothold in the senior housing and adult care market were like wild animals drawn by the bright lights of the health care system. They crouched in the darkness united by two things: a desire for recognition and a fundamental antagonism toward the current health system providers. The time for attack was near. Terry and Paul Klaassen seemed unlikely commanders to participate in such an attack. The story of their own operation bridges the generation between the older, familiar pattern of husband-and-wife teams that operated boarding homes for seniors and the brasher more aggressive newcomer developers. The decision to operate a facility, as it had been for many others, was in part motivated by their own experiences in getting assistance for elderly relatives in grim and impersonal nursing homes. It was also motivated by the relative attractiveness of the senior housing arrangements in Holland, which Paul had been exposed to when he visited his grandparents. A verzorgingsehuzen, or senior housing arrangement, provided for their care in a personalized homelike environment . The system of care for the frail elderly developed by New York’s first settlers from Holland was about to return. In 1981 the Klaassens sold their home and moved into a boardedup nursing home in northern Virginia. They had a vision of creating a facility similar to the ones in Holland. They added two other nursing home conversions and then, in 1987, built their first prototype facility from scratch. It has a Victorian mansion style, capturing the flavor of that earlier era, but was designed with a different purpose in mind. It became the trademark for their company, Sunrise Assisted Living, Inc., and a prototype for the emerging assisted living industry. An industry, or a movement, or whatever it was, however, needed a voice. Existing national trade organizations were at best ambivalent about these less-professional old-timers and renegade upstarts. The American Health Care Association, the national trade association of the for-profit nursing home industry, was not interested in diluting its advocacy by adding providers it regarded as heirs to the boarding home industry. The American Association for Homes for the Aged, while more sympathetic to the vision of assisted living, had a membership representing voluntary providers that had been historically hostile to for-profit operators. With a mixture of entrepreneurialism and missionary zeal that had driven the development of his company, Klaassen kept pushing. The National Association...

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