BANKRUPTCY RISK AND STATE-REGULATION OF CONTINUING CARE RETIREMENT COMMUNITIES

Continuing care retirement communities (CCRCs) often require substanti al financial investment from residents, prompting concern about potent ial losses to residents in the event of a CCRC's bankruptcy. State gov ernments have responded to this concern with varying levels of regulat ion. Overall, CCRC bankruptcy rates are very low (.3% per year). We fo und that measures of varying regulation stringency had no effect on in dicators of CCRCs' financial performance relating to bankruptcy risk. CCRCs that offer extensive contracts, including unlimited long-term ca re in addition to housing, have less positive indicators of financial strength than other types of CCRCs. When measured by traditional healt h care industry standards of financial strength, CCRCs appear less pro fitable than other types of health care facilities. This raises the qu estion of whether CCRCs can continue to attract the needed capital fro m private markets and because of that, suggests that their future grow th may be limited.