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Senior housing should lead with tech-enabled service to drive costs down

Assisted living cost structures are outrageous. Perhaps you saw it -- the New Old Age article about one family's encounter with ballooning costs in Assisted Living (year-over-year cost growth of 5.2% nationwide), now an 18% (additional $12,000) hike proposed for this 72-year-old gentleman because he 'needed the next level of care.' Then there's the nursing home story I heard recently of a woman who has been 'private pay' in a nursing home to the tune of $100,000/year for years -- because she had the ability to pay. She spends her days reading books in the hallway. Or another -- 12-hour/day non-facility companion aides to 'watch' and prevent wandering on top of $4600/month 'assisted living' charges, bringing the total expenditure to $11,000/month.  Another example: a locked memory care unit in a wealthy town, where a studio apartment starts at $7400/month. All of them have 'prices' of care completely out of proportion to the labor and actual delivery of the care itself. From the Times article: "The institutions often urge families to approach assisted living a bit more realistically." Yes, realism would be good -- regular meetings and clarity on future costs would also be good. "It’s important for people to remember that their loved one is moving into assisted living because they need services," said David Kyllo, executive director of the National Center for Assisted Living. "They’re not moving in because of a change in address. It’s needs-driven."  I find that to be a rather snippy comment on the circumstance of a family understandably appalled by price hikes.

You've got the customer -- where's the collaboration on cost? In other areas of our lives, we would simply not put up with this 'customer is captive' approach -- instead, we would expect to be treated like customers who have options. Even the funeral industry, where the customer is captive AND also completely freaked out, has been shaken to its core by Costco. But the senior housing industry is stuck in the past, with little useful online comparison or consumer review information available. Combine that with a frail resident and a worried family -- all ingredients that discourage a shopping mind set. Yet I predict that making prices and service value visible will happen in this industry as well. So why not reach out to family members with a menu of ways to lower the costs associated with care, rather than simply charge what private payers will tolerate until cash (or life expectancy) runs out. Amazingly, many organizations admit that they have no strategy for that, but simply discharge a resident who can no longer pay, even if they're in their mid-90s and have been living on site for 10 years! Don't we all want families to feel good about the care and recommend it to friends or online? What executives don't want -- but I strongly encourage -- is for customers to post reviews at The Senior List or OurParents.com, or even Yelp.

How can value be boosted or costs maintained or lowered? I am often told that non-profit senior housing organizations and state/federal funded housing can be creative in their use of technologies to maintain costs and improve services. Independent living organizations like SelfHelp, Volunteers of America and NewCourtland have demonstrated and published success with remote monitoring technologies that alert on exception rather than require on-premise continuous watching by aides. These systems detect pattern changes that may signal a problem rather than waiting for an emergency and calling 911.  Enabling residents who have Parkinson's by providing them with fall-detection technologies could also reduce staff-hours spent checking on residents. 

Today -- asset, restaurant, pet tracking and cameras -- they're standard everywhere. Tagging assets like trucks -- around for years. Putting a chip in the dog -- standard practice. Finding your friends and a restaurant via your smart phone -- about to be mainstream. Expecting to pass by a security camera in a public place or residence lobby -- no problem. Using any of these effectively for people in assisted living? Rarely happening. Yet enabling residents who are at risk of wandering with geofencing could reduce the cost per memory care resident. It could enable greater freedom of movement and switch resident monitoring into an exception-based world in which staff time is combined with volunteer time to focus on activities. Assign receptionists at the front door to receive alerts and watch a map or doorway video of who's where, freeing aides to provide direct and needed care to multiple residents at a lower cost.

Technology enables required transparency.  Let's see deliberate effort on the part of assisted living organizations (and their in-home alternative -- home care agencies) to directly relate costs to value. Make cost breakdowns (budget) more transparent, reporting to customer families about specific initiatives to keep costs flat or reduced. Identify ways to monitor and communicate exceptions to patterns rather than insist on continuous labor-intensive oversight. These tech-enabled processes can help residents feel and be safer. We know that in this economy, prospective residents are delaying move-in dates longer and longer -- entering independent living units in their 80's, assisted living as late as their 90's. But with costs rising faster than inflation, something has got to change -- and it will have to be radical and take advantage of technologies that promote efficiencies and effectiveness -- see these initiatives in Denmark, Ireland, and Singapore.  Why are these countries in such a hurry?  Because they recognize what we apparently can't -- that the current approaches are unsustainable and so last-century. As the population ages and the technology to support quality of life is either non-existent or rusting, labor alone will not serve -- it will only cost.

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As with so many things, costs are highest for those least likely to afford them as well as those in dire need of the special products or services. How can we change this paradigm?

I, too, have realized there is no way the rates charged at retirement communities is sustainable. It is completely unrealistic for most people. Facilitating ways for folks to age is place by using available technology is the way of the future. Even remodeling one's home to incorporate wider doorways, accessible kitchens and bathrooms, will be less expensive - and a one time expense - than paying the huge rental fees charged by facilities. There are devices to monitor movements, alert for falls, dispense medications that make staying at home even more realistic and cost effective.

I have several clients who live in retirement facilities, and the ratio of caregivers to the number of needy residents is never enough. When census falls and more rooms are vacant, what do these places do? They let caregivers go, and who pays the price for that? The residents. Of course, they must keep a certain number of caregivers by law, but there are never enough.

Another issue I find to be disturbing is the lack of reliable communication from one shift to the next as caregivers come on duty each day. Time and time again, I see instructions from family members or doctors that may or may not be relayed to the persons actually giving the care to the residents. There are so many mixed messages. I can ask a caregiver how a resident is doing on a particular day and get one answer; when I ask someone else, I get a different answer. That is a little scary, too. One of my clients who suffers from Alzheimer's is losing the ability to feed herself and has consequently began losing weight - too much weight. Her doctor sent written orders to the facility where she lives that she is to be fed at each meal. My observations have been that orders are being followed sporadically. Some caregivers just don't know about the orders, sometimes there just aren't enough caregivers at mealtime to help everyone who needs it and so the residents with the most needs are helped first. I report what I see to family and to the facility.

I'm all for aging in place! If socialization is the main concern for a senior who is isolated at home, there are many senior centers in communities with programs to accommodate them. Hiring someone part-time to help with activities of daily living (ADLs) and transportation is still less expensive.

I share your frustration. A problem with technology is that is does not replace assistance with activities of daily living. But the "captive" model is the business model of capitalism. Look at phone service, cable / satellite service. Software purchased from Microsoft. Ads purchased from Google. Banking...higher education....its everywhere. Examples: the iPhone's actual cost (parts and labor) is about $70-$80. But they "sell" it for $599, or $199 with a contract, for lots of airtime that we do not use. Television content: I watch maybe 8 channels, but pay for 900. Google, Apple and Microsoft are sitting on 40 billion in cash reserves - each. The software companies stop supporting their software after a few years to force purchase of updates, claiming new features most people will never use. Banks will make record profits this year partly from lending us money that they get from our government for 1%, and charge us substantially more (19% creditcards). Service providers encourage electronic billing, but do not pass on the savings.

Thanks, Dan. I don't quite agree with your comparisons.  Even if there is only one phone service provider available in a geography (or one bank or one TV provider), our frailty and care vulnerability are not part of those 'service' equations.  Assisted living alternatives when backed up against the wall of cost increases -- that's a whole different ballgame. I am sure I am not the only one who knows about an older person ejected from or needing to leave an assisted living or a nursing home, seeking an alternative option under duress and stress.  If you know of someone who has heard the phrase 'Sorry, but we can no longer care for...', you know the scenario.



I agree that it is unpleasant. I agree that it should not happen. My only point is that it is present in all areas of our economic model. Captive revenue models are being used by providers on this forum, so we are no strangers to the concept. Auto mechanics, general contractors - how many have experience with service providers starting a job, only to get hit up for more money half way through? Life, auto and health insurance companies routinely low ball first year policies then substantially increase the rate in later years....the list goes on.

I have personal experience with a family member who faced eviction from a nationally known assisted living facility because the third wife never paid the bills. The company never checked her credit references. The wife also emptied the bank account and went to Florida with a new partner - all under the auspices of a court appointed guardian and the Area Aging Agency. But that is another story.

You have hit on what might just be the driver that pushes aside the resistance to technology adoption. The high cost of living life the way we want often creates a willingness to consider solutions we would not otherwise. There will have to be some high profile early adopters with most of the solutions you discuss and some demonstration of security of access, but bit by bit we will likely see a breakdown of the barriers.

My brother and I developed a free, online report card and health information guide featuring hospitals, nursing homes and home health care agencies. The URL is http://www.advisormed.com. We created this website because one of our family members had a life changing experience that affected us personally. I’ve provided the link to our story here: http://www.advisormed.com/pages/our-story. I love your comment about having customers to post reviews....that is right on the money. I am also happy that other companies are creating that transparency as well (ie ourparents etc). The more information/resources the better. I believe our site adds to that list for people. Good article. Thanks for the post.

I just came across this article Laurie, and I completely agree. I'm an RN and I own a home health care agency called CalaCare in Oakville, ON. There is so much potential for technology to make aging in place (wherever that may be) more sustainable for older adults. I often get phone calls with a desperate daughter on the line sayings "Mom needs someone with her 24 hours a day, and I just can't be there all the time!" The truth is, it is a rare situation that the elderly person actually requires 24 hour supervision. By integrating technology into a traditional care plan I find that we can significantly reduce the number of hours a caregiver needs to be physically present. I haven't found the perfect solution yet, but with all of the innovative technology out there we seem to be able to find something to help simplify almost any situation. I'm going to continue to follow your blog- great information! Thanks.