The Business of Aging

New Study: One in Seven Americans over Age of 70 Suffers From Dementia

Thanks to David J Levy, JD CCE from the American Association for Caregiver Education who sent me the following details of a recent study showing that one in seven Americans over the age of 70 suffers from dementia.

Published in the November 2007 issue of Neuroepidemiology, the study is based on data from 856 men and women who participated in the Aging, Demographics and Memory Study conducted in 2002 by researchers at the University of Michigan Institute for Social Research (ISR) and Duke University Medical Center and funded by the National Institute on Aging. The study was part of the larger ISR Health and Retirement Study, a nationally representative survey of Americans age 51 and older.

About 3.4 million people, or 13.9 percent of the population age 71 and older, have some form of dementia, the study found. As expected, the prevalence of dementia increased dramatically with age, from five percent of those aged 71 to 79 to 37.4 percent of those age 90 and older.

About 2.4 million of those with dementia, or 9.7 percent of the population age 71 and older, were found to have Alzheimer's disease, the most common cause of dementia, according to the study.

Overall, the researchers found that Alzheimer's disease accounted for approximately 69.9 percent of all dementia, while vascular dementia -- often caused by stroke -- accounted for 17.4 percent. With increasing age, Alzheimer's disease accounted for progressively more of the dementia cases, so that in the 90+ age group, it comprised 79.5 percent of dementia cases, compared to 46.7 percent among those in their 70s.

The study provides the first prevalence estimates based on a nationally representative sample of older adults from all regions of the United States. Four previous national estimates of the prevalence of Alzheimer's disease were all obtained by extrapolation from regional samples. These estimates ranged from 2.1 million to 4.5 million.

Profiting from older Americans.

I'm a capitalist. I believe in the free market and as an entrepreneur I make my living off it. I make no apologies. My company, Fisher Vista, LLC will soon be launching a new service for the "senior" marketplace called SeniorCareMarketer . We hope to profit from the aging of America. But it's not profiting at the expense of any individual, group or institution. We believe we will be offering a valuable service and in return we hope to make a fair profit. And if we do, we of course will give some back in the form of charitable donations.

But what concerns me about the "business of aging" is the delicate balance between making a buck and caring for an individual's wellbeing. It's been a challenge for all health care companies - you want to be sure every individual gets the care they need but at the same time, you need to turn a profit to keep offering the valuable products / services you provide. Some companies like Johnson and Johnson have balanced this dichotomy remarkably well.

But the growing interest from Private Equity firms in senior care  does concern me. Why? Because private equity is all about making money for the private equity firm, major shareholders and selected other Wall Street institutions - typically in a five year period in order to have a highly profitable liquidity event. And for some reason, this seems especially wrong in the senior care marketplace where any cuts in services do not just hurt "customers" but directly impact people's health and lives. You cannot take a short term view in senior care.

The New York Times recently ran a story called At Many Homes, More Profit and Less Nursing  where they analyzed trends at nursing homes purchased by private investment groups. The Times examined more than 1,200 nursing homes purchased by large private investment groups since 2000, and more than 14,000 other homes. The analysis compared investor-owned homes against national averages in multiple categories, including complaints received by regulators, health and safety violations cited by regulators, fines levied by state and federal authorities, the performance of homes as reported in a national database known as the Minimum Data Set Repository and the performance of homes as reported in the Online Survey, Certification and Reporting database.

It's a fascinating article in a series called Golden Opportunities  where the NYT examines how businesses and investors seek to profit from the soaring number of older Americans, in ways helpful and harmful.

WellPoint Partners With Zagat for Physician Rating Tool

WellPoint announced on Monday that it has partnered with Zagat Survey (yes, the restaurant rating company) to rollout a new online survey tool allowing Wellpoint members to indicate if they would recommend a given physician to others and leave open-ended comments about their experience.

Eric Fennel, WellPoint's staff vice president of consumer innovation, says the insurer views the tool as the missing piece in a consumer tool landscape that is mostly dominated by clinical quality and cost tools. "What was missing was that peer-to-peer interaction around what other consumers think," Fennel explains.

True, but limiting the tool to only Wellpoint members is less than ideal. The best social networking or consumer rating sites (e.g., www.yelp.com)   are open to everyone which also increases the number of reviews. And I'm not sure how much leeway Wellpoint will give to reviewers who have a really bad experience. 

Anyway, kudos to Wellpoint for trying and I wish them success. Other insurers should follow suit.

There are already a few physician rating sites but most have limited information or require you to buy a report.  I think ultimately the best physician rating sites will be those social networking or consumer rating sites that already command a large and active audience like Yelp where users have a reason to return day-to-day - and therefore, have better participation.

Fewer Seniors Live in Nursing Homes: What it Means.

An article in USA Today titled Fewer seniors live in nursing homes discusses how despite the graying of the nation, the percentage of elderly living in nursing homes has declined.

The article says this trend is the result of two factors: (1) the improved health of seniors and (2) more choices of care for the elderly. However, this has much more to do with the fact that family's have more choices than it has to do with the improved health of seniors. There are a LOT more elderly people in the USA than ever before so even though the elderly population may be healthier, that alone does not explain the decrease in nursing home popularity.

For example, the article mentions that about 7.4% of Americans aged 75 and older lived in nursing homes in 2006, compared with 10.2% in 1990.

According to US Census data,  in 1990, there were approximately 13,135,000 people over the age of 75 and in 2006 this number was estimated to be 18,263,307. This means, according to the USA Today article, that in 1990 there were 1,339,770  people age 75+ in nursing homes (10.2% of 75+ population) and in 2006 there were 1,351,485 (7.4%) people - about the same number as 1990.  Yet, the 75+ population grew by over 5 million people. I don't think that many seniors are that much healthier.

So where are these people going?

The answer is most are choosing other housing options (e.g., Assisted Living) or simply staying at home - and the economical impact of this is huge, especially when you consider that by 2030, there will be over 33 million people over the age of 75. This means that even if the percentage of people age 75+ in nursing homes drops to 5% by 2030, there will still be 24% more people in nursing than today. And this still leaves a big percentage of 31 million additional people over age 75 choosing other options.

And this means strong demand for "other" housing options like Assisted Living (wonder why private equity likes this space?). And it also means strong demand for in-home care services and all the related products and services.

What related products and services? The average cost of nursing home care is more than $67,000 a year and tops $100,000 in some urban areas - and a good percentage of this cost is for related products and services the elderly person will need as a part of their care .  So if an elderly person chooses to stay at home by using a home health care company or a non-medical home care company like ComforCare,  the family or the in-home agency will need to purchase many of these products and services including such things as home safety, pharmaceuticals, medical equipment, personal healthcare, mobility, etc.

And this will be a boom for the suppliers of these products and services. And this is why services like SeniorCareMarketer will be so valuable to the suppliers to help them generate publicity, website traffic and sales leads.

Microsoft's New Medical Records Web Site - Why it will Likely Fail

Microsoft Corp launched on Thursday a Web site that lets people store medical information online, moving into a consumer health care business targeted by Google Inc and other technology players.

When I visited the site, I found some features quite useful. While not a caregiving journal, it does offer a lot of interesting features like the ability to store medical information (for free) in an encrypted database and it allows me to decide who sees the information.

However, without agreed upon industry standards on what information can be shared, how to store it and who can see it, this is likely to not go very far.  Not to mention HIPPA an the reluctancy of many providers to put anything online. 

But besides that..........Microsoft in the healthcare business?  Please.  Healthcare is about people and the first thing I noticed about Microsoft's new HealthVault site is there is NO PHONE NUMBER to contact anyone if you have questions. Before I put any of my records online, I'd like to speak with someone or at least know that if I have an issue or concern, there is someone I can call.

Typical Microsoft and a big reason (poor customer service)  why they continue to lose customers across their entire product line.