Some mention of use of tech as a competitive advantage.
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Six trends that signal change in all things aging and health
Stick versus carrot: re-admission penalties emerge October 1st. This may be much ado about nothing – but October is the month that hospitals begin being 'penalized' for readmitting the same patients within 30 days of discharge. What’s that mean in dollars and cents? Well, by forcing hospitals to focus on what are euphemistically called 'transitions' -- cuts of anywhere from 0.42 percent to 1 percent in revenue loom. Or look at the flip side: CMS gets back $280 million from 2200 hospitals immediately. And who are those pesky people who have been re-admitted? Surprise, they are disproportionately comprised of seniors, initially with diseases like pneumonia, heart attack and heart failure, with more diagnoses added each year.
Government expectations: CMS recently allocated nearly $1B in innovation grants. In the grant invitation process earlier this year, CMS received 3000 proposals, ultimately awarding 3-year grants to 81 of the submitting organizations. While most of these were outside of the realm of technology -- fit within the definition of job creation -- some included telehealth, new patient-friendly websites and/or technology components within their scope. The significance of the investment by CMS in this 3-year grant program, however, should be viewed in the context of the looming costs of longevity ahead of us, signaling growing interest in, and eventually reimbursement for remote monitoring of those most at risk of readmission, heightened expectations of families and consumers, and the looming cost of care.
Growing longevity: Data is muddled, but the consumer trend is inexorable. My conclusion from too much information is that if you have the money and health, you’re going to live long enough to benefit from something within the technology palette. Apparently calculating longevity is very difficult – even when it is influenced by actual data. Look at the Social Security Administration projections (83 for men, 85 for women who survive to age 65) or actual mortality data (80.4 for college-educated men, 84 for college-educated women). But either way, we are going to live a long time if we fall outside of the realm of great poverty or specific life-threatening diseases.
End of life: Most of health expenses are at end of life – for consumers, not just CMS. It turns out that consumers are spending out of pocket more than they have as assets during their last five years of care – according to a new study from Mt. Sinai School of Medicine. "In the last five years of life, out-of-pocket co-payments and deductibles, and the high cost of home care services, assisted living and long-term nursing home care cause 25 percent of seniors to spend more than their total non-housing assets."
Dementia: Disappearing nursing homes boosted assisted living and dementia care. On the one hand, the nursing home has become an increasingly extinct care species, with more than 1000 of them closing in less than a decade, 'shuttering 80,000 beds from 2000-2009 alone.' This has created a business opportunity for assisted living (82% of which are for-profit), and particularly for dementia units within assisted living. These are potentially the most profitable (price-to-service ratio) offerings on the campus. Plus, combine a likelihood of some sort of dementia at age 85+ with the growth rate of that age segment (fastest growing in the US) and the recipe indicates greater demand for that type of care. Although what exactly that type of care should be is yet to be determined.
Home care: Big, profitable, just getting started. The survival-of-the-fittest phenomenon continues to apply itself to senior care. Assisted living has supplanted nursing homes over the past decade; now home care is encroaching on assisted living. Maybe that's because of the economy, contracted real estate values, or the ever-popular AARP-surveyed desire to age in place (however dubious.) The average age at move in to AL is mid-80's and the average age of residents is now 89. Meanwhile, the fastest growing job categories – non-medical home care and home health care aides – represent the most profitable franchise opportunity today. High job turnover (typically 60-100%), low pay, likelihood of part-time versus full-time employment together make this a challenging industry that has yet to broadly deploy technology for care recipients and families.
Bottom line: there's opportunity, it is not going away, and it's not as mobile as hype would have it. I was contacted this week by a venture capitalist who offered the thought that the aging tech industry had 'structural' problems that inhibit growth. Really? Are the problems structural? Is the industry of tech that meets the needs of older adults inappropriately named? (After all, Medicare by any other name is still not for young people.) Perhaps we should call it, let's say, Digital Health? If that were so, would VCs and other investors believe it to be an opportunity they could not pass up? Call me cynical about the so-called and misnamed digital or mHealth opportunity. If you have a smart phone (or a Fitbit) and you are wandering around, longing for a good map, struggling to find useful directions, looking for a restaurant, trying to find your hotel, you are not going be quantifying yourself -- unless you just think it's something to do for fun. And if you, yourself, or your mother really need to have a self that is quantified and monitored - actually alerting someone or some thing, oh well, too bad, you don't have a smart phone, you aren't uploading any data. You just need help.