The Business of Aging

Aging Population Faces Caregiver Shortage.

Lisa Gibbs from MONEY Magazine wrote a great blog post titled Aging boomers face caregiver shortage.

She begins her blog post with a mention of the Community Living Assistance Services and Supports (CLASS) Act, a provision in the health care debates to create a national long-term care insurance program that would allow people to pay an average $65 a month and, after five years, be eligible for between $50 to $100 a day in benefits.

In Lisa's words:

"While $100 is better than nothing, I can tell you from experience that it doesn’t cover very much. It would pay for about six hours of daily care from the home aides I hired recently to help my mother recover from surgery. It certainly wouldn't cover assisted living or nursing homes, which run into the tens of thousands of dollars per year.

Whether through private long-term care insurance or a public plan, it’s clear this country needs to do a better job thinking about how we’re going to care for ourselves (and our parents) as we get older and frailer. Few of us have saved enough money or bought insurance to cover whatever care we need in our later years. But there's another aspect of the long-term care problem that people have overlooked: A looming "caregiver crunch," in the words of Ken Dychtwald, a gerontologist and president of the consultancy Age Wave.".

Lisa nails it. She is absolutely right.

Trend: Parents Moving in With Their Kids

Interesting article today in the Sacramento News titled Economy makes roommates of elders and their adult children.

California and Hawaii lead the nation in multigenerational family households (according to AARP statistics) and while this is likely due to . cultural norms, no doubt the tough economic conditions are playing a major role in families' decisions to house or move in with their elders.

At the same time, the article points out, retirement communities and upscale assisted living centers that once had long waiting lists find themselves slammed with vacancies according to the National Investment Center for the Seniors Housing & Care Industry.

At last weeks Boomer Summit Conference there were a number of new companies  in attendance that market services and technologies that help Boomers stay in their homes longer (this sector of the market will grow considerably the next decade). But one interesting company competing in the business plan competition was Larson Shores Architects, Inc .

This firm markets an "In-law Kit",  a solution for boomers seeking to accommodate their aging parents in their current home. This concept brings together universal design, green building products, financial feasibility, and local builders to create a multigenerational housing solution.

Maybe this company is on to something. 

"Searchable" Senior Care Directories. A Rapidly Growing Product Category.

Leena Rao at TechCrunch posted an excellent blog titled "OurParents Launches Free Customized Service To Find Senior Care Providers".  Techcrunch writing about the senior care space is a big deal given their enormous popularity and PR clout. So kudos to the marketing and PR team at OurParents for getting the visibility.   And based on a quick look around OurParents I was very impressed. They will be a fun company to watch.

This space (searchable provider directories of senior care companies) is exploding so I thought I'd share with readers of this blog my thoughts on the space.

Again, these are my opinions so if I mischaracterize anything PLEASE let me know. 

First of all, let me define what is meant by "searchable provider directories of senior care companies".  In a nutshell, these are online directories that allow people to search for various types of elder/senior care companies from residential care to medical products to handyman. However, most seem to focus on in-home care, assisted living and nursing homes (the most lucrative and widely requested type of senior care providers).

There appear to be THREE broad models although I realize there are many variations and hybrids of each.

MODEL ONE: LEAD REFERRAL
These are what I call pay-to-play models whereby the only companies who get listed or referred are those who pay to be in the search results. With some variations of this model, you don't actually get to view the search results. Instead, you are contacted by a sales rep or "care consultant" who helps connect you to a provider (and of course they get paid a commission if you choose that provider). While these models can be quite useful their downside is you may not be referred to the best provider if they have not paid to be in the directory. An example of this model is A Place for Mom, who I believe is the largest company of its kind oin this space.

MODEL TWO: USER-POPULATED
These directories include companies who have taken the time to create a listing - usually at no charge although they can get premier placement for a fee. The main downside to this model is again, you may not get a complete listing of providers in your area or the information may be out of date. The quality varies considerably amongst the various directories. An example of this model is The Senior List but there are hundreds of these sites. 

MODEL THREE: MAINTAINED DATABASES
I could not think of a better name for these directories so I use the word "maintained" because typically the company running these sites gets their information from their own internal researchers, state licensing or other agencies and/or databases. This insures (a) all providers in a particular zip code are listed and (b) the information is up-to-date. Needless to say, there are a lot fewer of these sites because they are very expensive to run - labor intensive.  As a result, many companies in this space are focusing on a specific category such as Assisted Living with hopes of expanding into other categories in the future. I believe SNAP for Seniors and OurParents (the site Techcrunch reviewed), are good examples of this model although their business models are quite different.

 Some of the best companies with maintained databases are not B2C but B2B companies like Employee Assistance (EAP) or work-life vendors who provide these services as an employee benefit by charging employers who in turn offer the online directories (and access to caregiving consultants) to employees as a benefit. Examples of these include LifeCare.com, Ceridian and CIGNA. 

PUBLIC SECTOR DIRECTORIES
Although these most closely resembles MODEL THREE, I broke it out because unlike other models, these directories have no "business model" and don't need to make money :-). Instead, our tax dollars support them. These are government sites that provide listings of various types of providers. As a result, they are bare-bones, often difficult or cumbersome to navigate and provide no enhanced listings or bells and whistles.

MAKING MONEY
Ahh, details, details, details. There is no question the demand for these types of sites is going to balloon. But what types, how many and who will survive remains a mystery because there is no clear winners in terms of business models. True, model 1 seems to make money today but there are a lot of unanswered questions about the growth potential of these types of services. 

With regard to model 2, the B2B EAP and work-life companies I mentioned will continue to do very well as they have for decades because they have a proven business model. But the B2C companies adopting model 2 currently don't have a sustainable revenue stream (no, advertising in my opinion is not sustainable in this sector - yet) and whether or not they can make money by up-selling other services like insurance and health related products is unknown. This may explain why the B2B companies like Lifecare.com and Ceridian have yet to penetrate this market. Why should they? Although you can bet they'll do it when they figure out how to go B2C without cannibalizing their profitable B2B business.

In the meantime, consumers have a lot more choices today than they did a year ago in terms of finding senior care resources. And that's a good thing.

Shortage of Home Care Aides

I just read a good article in the Omaha World Herald titled A growing need but low wages, few perks for home-care aides.

The article suggests the "country will need hundreds of thousands more home-care aides if it's going to keep today's elderly, followed by their far more numerous baby boomer children, out of institutions".

Home care aides occupy a category that the Bureau of Labor Statistics  (BLS) calls "personal and home-care aides" and it is the second-fastest-growing profession after  network systems and data communications analysts.

Think about that for a moment. That's quite amazing and the implications this will have on our economy are quite significant. This also explains why home care is one of the fastest growing franchise businesses.

The average cost for in-home care is about $20 - $25 per hour so if you need a home care  aide to visit for four hours per day this equals about $100 per day or 3,000 a month on the high end. And a full-time live-in home care aide can cost as much as Assisted Living - $60,000+ per year.

But unlike IT, home-care aides don't exactly make much money. 

According to the article "home-care aides make an annual appearance on Forbes magazine's list of the 25 worst-paying jobs in America. (The aides' mean annual wages put them ahead of shampooers and waiters, but behind parking lot attendants.) Once hired, they leave in droves; turnover rates run 40 to 60 percent a year, says labor economist Dorie Seavey of PHI, a nonprofit that aims to improve direct-care work'.

This won't exactly make it easy to bring new quality people into the profession.

Growing Aging Population a Myth? Yes According to This Analyst.

An article Home Healthcare Industry: Ghosts in the Demographic Machine written by a stock analyst argues that the aging population "has not played—nor will play for a while—a meaningful role in the incredible growth by home healthcare agencies (HHAs)."

The article was written from an investment perspective and the author suggests not to invest in this industry because in his opinion the growing aging population is a myth and does not support the dramatic growth of HHAs.

I don't fully understand how he comes to that conclusion and I cannot completely grasp his number crunching which leaves me a little suspicious of his predictions. But the article is certainly interesting and worth a short read.

But I do disagree with the logic he uses to show that the number of people using home health care is not really increasing.

His data for the growth of HHA comes from "Admissions" and Medicare filings. However, a significant number of home health care purchases never involve medicare (not always covered) and there are no formal admissions that can be tracked with any level of accuracy.

If I purchase the services of a home care company (one of the fastest growing segments of the home health market) to visit the home of my aging loved one for a day, a week or even as a full time live-in, medicare or any other national reporting entity will never know about it. So, it is difficult to measure the growth in these companies except by  what we see in the market and what we see is major growth.

Does the author of the article not include home care companies as a significant component to "home health"?  It wasn't clear in his analysis.

Another fact that the author may have overlooked is the dramatic shift in attitudes amongst Boomers about residential care (Assisted Living, Nursing homes) versus home health care. Increasing number of people shun the former in favor of the latter and this will result in more older people choosing home health in coming years so even if the author's numbers are correct about the number of older American's not really increasing the percentage choosing home care will increase.  

Anyway, give the article a read - it's worth it.

Will The Changing Economy Bring Families Closer Together? What it Could Mean for Elder Care.

John Sumser is an expert when it comes to employment and recruiting topic. At our recent annual company meeting, John gave a superb keynote presentation where he touched upon how changing demographics and other societal trends are impacting everything from politics to marketing to recruiting - and the opportunities this is presenting. Fascinating stuff and I highly recommend John for any event you are planning. His presentation can be tailored to any company/industry. It's important stuff. 

Anyway, John's presentation got me thinking about elder care.

People say it takes a village to raise a child. This is debatable but when it comes to caring for elders, there is no question about it - it takes a village or at least a team of experienced and caring professionals. Especially when the elder has Alzheimer's.  But most of all, it takes a family. Unfortunately, within the last one hundred years of our society, increasing numbers of people have moved away from home. The number of long-distance caregivers in the U.S. who are caring for an older relative is about 7 million. Long-distance caregivers are generally defined as living more than one hour from the older adult needing assistance.

But a recent USA Today article titled For family, There's no Place Like Your Hometown  shows this trend is starting to reverse - and the economy is a major reasons why. In fact, geographic mobility is at the lowest levels since the government began keeping statistics in 1948 according to a recent study by Pew Research Center.

"People move for economic opportunity, and they stay put for family ties," says Paul Taylor, project director of Pew's Social & Demographic Trends Report. "But if you add it all up, you find ultimately family trumps money when people make decisions about where to live." 

Those who study migration trends say a combination of factors has led to the decrease in mobility, including an aging population (the prime ages for moving are 18-29); a rise in two-career couples, which complicates job moves; a murky employment outlook; fewer moves to traditionally high-growth areas; and the economic slump, whose roots began years before the word "recession" came into play.

My opinion is that this trend of decreased mobility will dramatically increase in the next 10 - 20 years - meaning I believe families will be brought closer together by either (1) children moving back to their parent's hometown or (2) parents moving to their child's hometown.  And the primary reason I believe this will happen is economics.

And the impacts this will have on companies providing products and services relating to the aging population is enormous.

According to Met Life,  the average cost of a private room at a nursing home in the USA is about $77,000. The average monthly "base" rate for an individual residing in an assisted living community is about $35,628 annually. If you have dementia and require additional support, this number can exceed $100,000 per year. And unless you have a long term insurance policy, this is all  private pay. What about in-home care? The average hourly rate for in-home care is about $20. If your needs increase to requiring a full-time live-in you can end up spending $200 per day or over $70,000 per year.

Now, how many families can afford these rates? 

Not many.

And even fewer with the recent real estate and stock market downturns.

As a result, children of aging parents requiring some level of care may be forced to live if not together, closer to their parents.

And this will impact how we market senior services.

Differentiating Your Home Care Business

I sat in on a very informative webinar this morning sponsored by Corecubed, a marketing agency that helps owners of home care (private duty) companies with their marketing.

Our company SeniorCareMarketer.com and Corecubed have a lot in common in that we believe in leveraging "content" with a combination of traditional and Web 2.0 marketing/PR tactics to build visibility of your company and drive leads.

The speaker on the webinar, Merili Orsini, spoke a lot about the "spectrum of care options" for in-home care and the marketing strategy of marketing to "referral targets". Good stuff. Merili gave an excellent presentation - she knows what she is talking about.

The webinar got me thinking about in-home care and marketing.  The growth of in-home care agencies is staggering. Several prominent business publications have identified home care as one of the top franchising opportunity at the moment. Generally speaking, there are two types of in-home care companies - franchises and locally owned independent agencies. Some well known providers include:

• Aegin Place
• Always Best Care
• Caring Hearts
• Comforcare
• Comfort Keepers
• Home Care Assistance
• Home Health Mates
• Home helpers
• Home Instead
• Homewatch CareGivers
• LivHOME
• Right at Home
• Seniors Helping Seniors
• Synergy HomeCare
• Visiting Angels

As the primary caregiver for my mom I've had some experience (as a buyer of home care services) with in-home care - from hourly to full time live-ins.  In fact, while researching potential agencies for my mom, I've spoken with most of the companies listed above as well as a handful of independently owned firms.  I've had great experiences and I've had some horrible experiences (where what was promised was not even close to being delivered).

There are a lot of ways to effectively brand and market your home care agency which I'm not going to get into in this blog posting. But I do want to make two very important points that many home care agencies are not aware of or at least their marketing does not reflect it.

Point #1 - You May Be a Local Agency But Many of Your Customers (Buyers) Are Not

You are probably having great success with your local marketing activities from advertising (print/Yellow Pages, cable TV, radio, display), sponsorships, trades show exhibiting, direct marketing, etc.) but these campaigns are just that - local.  Many of your buyers (e.g., caregivers) are long-distance (e.g., live greater than 50 miles from the personal they are caring for) and they may not be seeing your campaigns. Consider these long distance caregiving facts:

• The number of long-distance caregivers in the U.S. who are caring for an older relative range are between 5 million and 7 million. Long-distance caregivers are generally defined as living more than one hour from the older adult needing assistance. - Source: National Alliance for Caregiving and AARP.
•  Caregivers live an average of 480 miles from the people for which they care. - Source: Long Distance Caregiver Project - Alzheimer's Association LA & Riverside, Los Angeles, CA.

As a result, regardless of the size of your business, you should be easily found online and dedicate a significant amount of resources to SEO, online marketing and of course make sure you have a great web site.   This is also why Corecubed's markeitng strategy of targeting referral targets is so important.  And why our product, SeniorCareMarketer is so valuable.

Point #2 - The Most Valuable Service You Can Provide During the Buying Process is Information, Guidance and Support - FOR FREE!

Think of this as sampling or a loss leader in marketing lingo. Most buyers of in home care services are not the actual people who need the service. The buyers are the children or other family members of the person needing in home care. And most of these people have no experience with elder care. Unlike child care where parents have plenty of time to prepare for their child's care needs (e.g., throughout pregnancy) elder care needs typically arise with no advanced notice. So the most valuable service you can provide these buyers is information, guidance and support. Yet, call any in-home care agency and most will connect you to a sales rep who lead right into a sales pitch about their firm. As competition heats up in this field, I would advise in-home care companies to hire or contract with geriatric case managers who can spend one or two hours providing free consultation with the prospect.  Sure, this will increase your selling/operational costs and you may even talk some people out of in-home care (if it is the right decision) but my hunch is your buyers will be grateful for the service and this in turn will reward you with increased business. And it makes for some great branding and marketing campaigns. And who knows, you may even be able to turn the new offering into a profitable consulting or resource and referral service.

The Bias Against In-Home Care: Things Heating up in Florida.

Fact:  If you qualify for Medicaid (the state-federal partnership that provides health coverage and nursing home care to the poor) and get sick or disabled enough to require substantial care, you have little problem gaining admission to a nursing home. But obtaining Medicaid-supported services at home, such as visits from an aide, is substantially harder and often involves a long waiting list, even though it may cost the government less.  In fact, even if you do NOT qualify for medicaid there is a bias toward residential care versus in-home care. For example, long term care insurance policies often have a higher daily benefit for "confined care" (e.g., assisted living or nursing home) versus "non-confined care" (in-home care) meaning families pay more out of pocket for in-home care - again, even though this option often saves the Government (and family) money.

So it was with interest I read a news story about Florida Medicaid recipients want out of nursing homes.

The debate?

A group of residents on Medicaid in Florida are claiming the state is illegally forcing them to live in nursing homes when they should be able to live where they choose. They claim that nursing homes, afraid of losing money, have successfully pressured politicians to make qualifying for community care more difficult. They have filed a federal lawsuit seeking class-action status on behalf of nearly 8,500 institutionalized Floridians.

What one Medicaid resident said:

"I can't choose what meal I want, I can't have a visitor after 8 o'clock - it's just like a prison without bars," he said. "People are making decisions for and about me that don't even know me or even care about me. All they care about is the money they're getting for me."

And some very influential people are supporting them:

"There are very, very, very few people who cannot be cared for outside in the community," said Stephen Gold, a Philadelphia disability lawyer who, along with AARP attorneys and others, is representing the group. "Why should the state give a damn whether you put the money in the left pocket of the nursing home or the right pocket of the community?"

"There's a lot of concern that the nursing home industry is very powerful in many states and has made sure that a lot of Medicaid dollars go to institutional care as opposed to home and community-based care," said Toby Edelman, an attorney at the Center for Medicare Advocacy.

What does the State of Florida say?

The Florida Agency for Health Care Administration, the Florida Department of Elder Affairs and Gov. Charlie Crist's office - the three defendants - all declined to comment on the litigation. So did the attorney general's office, which is representing the defendants.  But In court filings, the defendants have claimed the plaintiffs lack standing because they haven't proven that treatment professionals deemed community-based care appropriate for each patient.

"Plaintiffs are not alleging that Florida's Medicaid program has failed to cover their medically necessary services," the defendants wrote. "Instead, plaintiffs want this court to second-guess the manner by which Florida's elected officials and policymakers have chosen to make those services available in light of the state's available resources."

Sadly, many nursing homes (and assisted living facilities) are excellent facilities and very well managed but a lot are not and they tend to be the ones getting media attention.

The message to the nursing homes and assisted living facilities? Do a much better job with your public and community relations, admit the shortcomings of the industry, pressure the poor performing institutions to get their act together and work with residents, their families, the government and other "patient" advocacy groups to improve the laws to better support the needs of families and the elderly/disabled.

Yes, a tall order but if the industry does not voluntarily change then it will be forced to change by legislation.

How do I know this?

Because the aging Baby Boomers will soon insist these changes take place and they have the numbers to make it happen.

Assisted Living for Individuals with Alzheimers. Do Your Homework. Manage Expectations.

My mom has advanced Alzheimer's disease (AD). In the early stages of her dementia we kept her in her home. Something I highly recommend for any senior who wants to remain at home, be safe and can still communicate this preference. Eventually, as my mom's needs increased, we hired a 'companion' from a local home care company. The one I used was Comforcare - excellent agency but it's a franchise business model so quality may vary by location.

Initially the companion visited my mom for a few hours each day (about $20 per hour and covered by most Long Term Care insurance policies) but as my mom's needs increased we increased the hours. Eventually, we hired a full-time live in from the agency for about $200 per day. Sounds like a lot and it is but quality residential care (e.g., assisted living) can be more than this in some locations.

Eventually, my mother's needs became more than what a single caregiver in the home could effectively manage. At this point we moved her to an assisted living facility. But wait, how can you place someone with AD into "assisted living" if they can't care for themselves?

As it turns out, most assisted living facilities have a dedicated floor for residents with AD. If a family can afford it, it's a better option than a nursing home (way better). If you do choose this option, in addition to the obvious questions to ask a facility , make sure the AD section is on a ground floor, residents can walk outside on their own (fenced in area of course), the staff is trained in AD, rooms have sensors to detect at-night wandering, there is plenty of stimulation, residents can get out once in a while (via a bus with a lift) and daily schedules are flexible.  One such facility that I am familiar with that meets all of these requirements is Aegis Senior Living - in particular, the Aptos, CA location. This is a very impressive facility. They "get it" when it comes to assisted living for AD.     

Now, here is where it gets interesting and why you need to do your homework when considering assisted living for people with AD.

Assisted living facilities do not typically provide one-on-one care. So if you need assistance getting dressed, going to the bathroom, getting to-and-from meals, etc. your going to have to pay extra for these services or hire an outside agency (like Comforcare) to provide "supplemental" care. And as your needs increase an assisted living facility may ask you to provide 24/7 supplemental care. So it is not uncommon to be paying close to or in excess of $100,000 a year for care in some areas.  In my experience the good assisted living facilities will be very clear about this but the not-so-good ones will be vague about it. Remember, when you take a tour of an assisted living facility the tour guide is a sales person. They get paid to place residents.

So what can a family do that can't afford this option? They typically end up spending all of the elder's money on care and then qualify for Medicaid. True, you can "spend down" or "gift" assets to other family members to qualify for medicaid faster but the laws make it very difficult to do this - and part of me understands and accepts the reasons why. 

Crazy isnt it? Yes it is. The sad truth is that families of AD patients get a double whammy because they need to spend so much more on supplemental care. And to make matters worse, the tax code and LTC insurance companies do not distinguish between elders with AD and those without so you are subject to the same daily maximums and restrictions.

I don't blame anyone for our imperfect system but as one Geriatric Care Manager recently told me "when congressional leaders have to begin caring for loved ones with AD I think the rules will be changed".

I hope you are right Nancy and I have a feeling changing this imperfect system is the final legacy the Baby Boomers will leave us with. They have the numbers and the influence to do so.

At least I hope so.

Designing for the Senior Surge

The Wall Street Journal had an article in the Friday April 25th issue called Designing for the senior surge  that discusses how makers of appliances (think General Electric) and bath fixtures (think Delta Faucet) are preparing for the senior surge by inventing "senior-friendly" products.

This is especially important because unlike their parents, who often moved into retirement communities or assisted-living centers, most boomers plan to remain in their own homes (aging in place).

And it's a huge opportunity. There are 78 million U.S. baby boomers, and roughly one-third will be 62 years old or older by 2013, says AARP. Read more senior care statistics here.

But marketing these senior-friendly features before they're needed requires a delicate touch according to NPD Group, a market research firm:  "The older consumers don't want to be treated like they're ready for retirement,'' says Mark Delaney, director of the home-industry sector at NPD Group.