Sadly, when you think about it, the private pay service-enriched sector of the seniors housing and health care industry is not that far from obsolescence now, if you define obsolescence as selling something no one wants. Of course, that’s a bit of an exaggeration because some people do want we are selling, or at least need what we are selling—maybe 5-10% of the potential market. The remaining 90% seem to be beyond our grasp, at least they have remained beyond our grasp so far.
But here’s a frightening thought: could this very low market penetration rate drop even lower?
It’s possible, for many reasons. It’s also quite possible that we will figure out how to appeal to more people; how to widen our target market. Future articles in this series will explore some promising directions. For now, what we basically wanted to do was to grab your attention and focus your thinking.
By the way, to reduce any possible definitional confusion, when the article uses the term “service-enriched” it means either supportive housing (where hospitality services such as meals and weekly housekeeping are provided) or assisted living (where in addition to hospitality services, light levels of personal care are also provided).
In this article we’ll touched on two areas of innovation and two societal changes.
Technological Innovations: Technology allows people to stay safe where they live now. Given the significant number of people who move to a retirement residence of some sort because they are not safe in their own homes, technological advances are bound to encourage more people to stay put. If you haven’t been keeping up with what has been going on, it is nothing less than astonishing. There are sensors for fridges, which monitor fridge door activity—door not been opened for over four hours? Someone gets a call. There are sensors for beds—people getting up too often during the night or not often enough? Someone gets a call. There are sensors for stoves—an element left on too long? Someone gets a call. There are also video cameras although many people consider video cameras to be a bit creepy. And to mitigate the impact of isolation, there are systems that will remotely connect people with programs and services in, for example, a nearby seniors’ centre (or even a faraway seniors’ centre).
Home Care Innovations: Although technology is related to home care, what I am referring to in this discussion is home care provided by people—all kinds of care and all kinds of people ranging from companions to housekeepers to cooks to doctors and everything in between. Although people have been providing care in the home for millennia, something is different now. Home care franchises are among the fastest growing franchises in the US and they are even expanding into China. Virtual retirement communities like Beacon Hill Village and naturally occurring retirement communities (NORCs) are more and more becoming part of the fabric of seniors’ lives. A few years ago I attended a conference in Denver. I met employees of a company that provided home-based assisted living for $4,000 per month. The services they provided were the same services people would get if they moved to an assisted living facility, including social and recreational opportunities. Those were provided mostly by taking clients out of their homes to various events. From an economic perspective, clients of this company were no better off than they would be living in a retirement community, but that’s not where they wanted to be “among all those walkers and wheelchairs”.
Assisted Living Executive, a magazine published by the assisted living industry in the US, believes a greatly expanded role for home care is unattainable because of looming labour force shortages. Of course they WOULD say that, but there is some truth to that contention.
A couple of societal changes to consider:
Increasing Male Life Expectancy: If there are more males around, there are going to be more couples around. And there are going to be more males around—the gap between male and female life expectancy has been shrinking for years, partly thanks to the absence of world wars. Not long ago the first Canadian male who had never been involved in a world war turned 65. Couples are better able than singles to stay home as they age—they compensate for each other’s frailties. In most retirement communities couples account for about 15-20% of the total number of residents, a ratio that has been very hard to budge. More couples in the general population will tend to reduce demand for retirement communities.
Visible Minorities: In 1981, 4.7% of the population in Canada belonged to a visible minority. In 2006, 16.2% identified themselves as members of a visible minority group. That’s a quadrupling in only 25 years. In some major cities in BC, over 50% of the population are members of visible minority groups. Now why would that matter to the seniors’ housing and health care industry? It matters because in some of these visible minority cultures, elders stay with their families until they are so frail they must be admitted to nursing homes. They effectively skip the whole intermediate step of service-enriched housing in either a supportive environment or an assisted living environment. Other things being equal, higher numbers of visible minority seniors mean lower demand for retirement communities.
So what now?
As promised at the outset of this article, in future articles we will explore the impact of these technological and societal changes on our industry so that collectively, we will not only survive tumultuous changes, we will thrive.