This document discusses the assisted living facility (ALF) industry and rising healthcare costs. It notes that Medicaid spending on nursing homes grew significantly from 2001 to 2007 while coverage of ALF services and waiver participants also increased substantially over that period. The target markets for ALFs include the elderly, disabled, hospitals, adult daycares, and state departments for persons with disabilities. Competition in the industry comes from the availability of funding, knowledge of supportive services, and states seeking cost-effective alternatives to nursing homes.