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I’ve done some market research on the Gratiot County area. Several small elder care facilities have gone bottom up, while other elder care services which are part of larger healthcare organizations have become pricier and more limited in services offered.
Not qualified for Medicaid, and not getting enough from Medicare, it’s gotten to the point where PUTTING my dad in a nursing home versus BUILDING a nursing home for my dad are both in the cards.
There is no such thing as an Adult Day Care license in Michigan. When registerring and running an adult day care, you need to learn the OSAs, follow them, and document them, and give reports to the regional Area Association on Aging (AAA). You probably need to hired a Michigan licenced registered nurse or comparable in order to administer medication at your adult day care according to OSA rules.
Could it cost less than a long-term nursing home for middle class Michigan family caregivers?
I’m a dreamer, and I’m crunching the numbers to make it work.
Based on what I know now (Q1 2023) after an all-nighter of research on a friday night after a week full of remote work OT…
This is what you need to know when you think about starting an adult day care business in Michigan.
By State definition, an adult FOSTER care is a small long-term and overnight elderly residential facility. An adult DAY care is measured in “Units Per Hour” and does NOT include overnight stays. We’re talking about an adult DAY care today.
The OSAs mean: You Can Build Any Kind Of Adult Day Care You Can Imagine (just follow the rules)!
The State of Michigan’s web page on “Adult Day Care” or “Adult Day Center” points to a thing called OSAs and the OSAs are the most important thing you need to understand, and the OSAs uses specific terminology you need to understand.
The most up-to-date complete OSA PDF for Adult Day Cares in Michigan I know about is located on the UpCap.org website published July 17, 2020.
A pretty good summarized version if your only focused on “adult day services” or “dementia adult day services” (good job), is located on the Michigan Adult Day Service Association (MADSA) website. It’s like a copy/paste cutout of OSA info just for “adult day services” and “dementia adult day services” when you’re not considering any of the other OSA service types (The PDF is HERE.)
Now you have the official OSA reference documents you need to build your business operation checklist, matching the services you want to provide to the OSA operating procedures you need to follow in order to run an Adult Day care according to Michigan and National law.
I will explain to you now.
Taking a peak at Amazon's best sellers in the Adult Day Care Department is one easy way to keep up on the latest and greatest elder care essentials. #ad
According to the OSAs, you are a business, and you offer adult day services. There’s no such thing as an “adult day care” or “adult day center” as per the State. A non-profit organizations and for-profit LLC businesses can both offer adult day services as long as they follow the OSA rules for adult day services. The OSA has a list of about twenty different service types that you might consider offering. For example, “Medication management services” and “Adult day services” are two services on the list, and if you want to serve people living with dementia, then your adult day services had better find a way to administer medication according to the OSA rules for medication management services. You need to look at all the OSA service types and then pick the ones that make sense, based on the type of elder care business you’re trying to start up. The Adult Day Care we all talk about is (by State definition) a business/organization which operates OSA services and follow the OSA rules for each OSA service provided.
Getting to know your OSAs is how you piece your detailed business plan together. It’s the big checklist that those experienced Caregivers Turned Entrepreneurs over in Cali tell you to start your adult day center business by understanding the OSAs and putting together a big checklist of OSA requirements for each aging service you plan to offer in your business.
When operating your OSA here are the things you should probably do to succeed in 2023, and the approximate cost if you were to operate this business in, say, Gratiot County, Michigan.
Here are a common list of employees you might hire, or roles and responsibilities you might take on as an eldercare entrepreneur starting up a new adult day care in Michigan:
$50 per hour is the market rate.
You need a Michigan licensed registered nurse to administer medication (OSA service type).
$15 is the market rate, but that sucks, so I suggest you pay more. 2023 Michigan minimum wage rose to $10.10, and double that is $20.20.
You need a home health aide to make the economics work. In Gratiot County, the going rate for (mostly franchised) in-home health aide care services is $30-$40 per hour for most, and $40-50-ish when it’s memory care for dementia/Alzheimer’s involved. You can’t charge customers $35 per hour, and pay a nurse $50 per hour, and offer 1:1 care services.
The unfortunate economic status queue of Gratiot County is, these Home Health Aid organizations and businesses (there are both types operating now) are paying their Health Aides $15 per hour and charging customers $35 per hour, with $20 left over just to scrape by on other regulatory and business costs.
It’s not an easy business with the current model of 1:1 in-home care. Not in Gratiot County, with a population of around 6,000 seniors 60+ and a standard rate of Alzheimer’s/dementia given population (around 9%). (The AAA published a report with these numbers recently.)
These probably cost even more than the registered nurse.
It’s awesome when adult day cares get charismatic performers to come delight their customers. Put that in your budget. Activities for enrichment and health. Could be artsy, creative, and sensory like a crafts class or music demonstration. Could be professional healthcare like a PT, OT, Memory Care Expert, or other special needs of the aging community which your adult day care serves.
Food prices and food proportions you get for the price don’t feel good in Central Michigan this year. Your food cost and cook / chef / clean up other costs could be over the $1,000 mark if you have a handful of regular customers.
If customers are going to hang out at your daycare for a few hours in a single day, then the OSA requires you to be serving nutritious food to customers according to detailed and exhaustive guidelines. The most pages of the OSA, I believe, are telling you rules about food and nutrition. It’s a lot to digest.
I recommend LLC for Adult Day Cares if you’re gonna wanna make profit.
LLC registration with the State of Michigan is cheap, and you can typically just use a paid online service to get it done without headache. Do your LLC research before.
All high and righteous, I looked up L3C in detail, but found it was rare and more complicated for me to learn my first time. I’m a regular Michigander.
If you run an LLC business entity adult day care, then you need to pay business tax to the government, especially when hiring employees.
If you charge customers for your adult day services, then you’ll need to pay income tax.
This is where things get complicated and I don’t understand completely. Some adult day cares get funding and operate in conjunction with turnkey elder care associations and government organizations to administer services (when the adult day care qualifies to participate and follows the rules of participation). But other adult day cares can choose to Go Private Pay All The Way. If you don’t plan to get funding, and you just want to run a business and charge customers and use money earned to do business the old fashioned way, Yeah You Can Do That. And I think it’s easier to do it private-pay, because you have fewer OSA-type rules to qualify for in the beginning and follow ongoing.
For a small adult day care business, insurance might cost $120 per month.
The three types of insurance I’m planning to get for the adult day care I’m building in my dreams, they are this:
The scary scenario where a customer complains, reports, or sues you is what #2 the professional liability insurance is about. You should go find a business insurance provider that does insurance for LLCs in Michigan, and gets you bundled savings for the types of insurance that make sense given your business services and operational scope.
This could get expensive. If you rent a place it could range between $800 to several thousand depending on your size location and building requirements.
If you buy a place, the mortgage payments monthly will probably cost less, but then you’ve got to deal with headaches like maintenance, heating, cooling, repair, plumbing, and Old Michigan Basements, Oh Brother!
A learning management system (LMS) is usually a “pay per seat per month” type online learning which costs a small adult day care around $150 per month.
It’s OSA required, and also a great way to upgrade the quality of care your adult day care provides to customers.
Expose my entire business plan with the world? Why Not?! It’d be a real good thing if more Adult Day Cares opened up to serve our Baby Boomers, eh?
