This is an excerpt from a longer piece I wrote about three rapidly growing industries in the 2020s.
There were a few things I never thought I’d say as a 5 year old. One of them was that I find the senior living industry to be extremely interesting and dynamic. But here we are. 36, thinning hair, getting sunburns on the top of my head and burning the midnight oil thinking about senior living. Life is so unpredictable.
The silver tsunami is coming. There are already over 50 million people in the US over the age of 65 and that number is skyrocketing because of the baby boomer generation. So what does that mean?
1) The tightasses from the 50s had more kids than their ‘free love’ baby boomers kids. Seems like coming back from a war gets your more in the child rearing mood than smoking some low end marijuana.
2) The number of older Americans in need of acute health care services is going to outstrip the supply of health care workers. This is a problem that needs solving.
3) The number of Americans suffering from cognitive diseases like Alzheimers, Dementia & Parkinson’s is going to continue to rise and is very sad (10M+ people are expected to suffer from Alzheimers and Dementia in the US in the next 5–10 years). How are we going to handle all these people in need of memory care services?
4) There is an ongoing loneliness pandemic amongst seniors that started well before COVID and is going to continue well after it’s over. When my grandmother was 90, she told me that when she was in a room with younger people she felt invisible. That’s very disheartening but I don’t think it’s uncommon. Maintaining a high standard of living for seniors is just as much about social interaction as it is about medical care.
So where are the opportunities in senior living?
1) People want to live at home. How do we make that viable for a larger segment of seniors including those who require some level of ongoing care? Will the future include smart home companies like www.vivint.com that do customized implementations specifically focused on seniors with care needs, monitoring of vitals, etc.
2) Train more care workers and enable them to get paid more. This is connected to #1 in that if the ratio of care workers to seniors can be increased, then one could imagine solutions combining caretakers and smart technology that enable a greater proportion of people to live at home.
Becoming a CNA (Certified Nursing Assistant) requires getting a certification that you pay for and then earning the honor of potentially cleaning feces, being treated poorly, receiving verbal abuse by people with dementia and more positively growing close to people who then die. And for all of these things, today you get paid less than a Starbucks barista. This is unreasonable and it’s why there is such high turnover in this field and a labor shortage in the senior living industry.
I could write an entire article about this one topic, but suffice it to say the model of ownership for large senior living operators and debt financing used in the industry makes it challenging to solve this in senior living facilities. An older person living at home does not have the same debt financing constraints and IRR targets as a senior living facility.
3) Caretaker + tech hybrid at home care. This is very closely related to #2. If the average monthly cost of an assisted living facility is $5000/mo (this assumes private pay, non-medicaid) which includes an hour or two of daily care for “Activities of Daily Living”, an apartment/room, meals and activities, then we have high level criteria for comparison. We can ask ourselves if there is an alternative model in the same cost range that lets someone stay at home, pays a CNA $20/hr (or a livable wage depending on where they live).
If we do the raw math problem, $5000/$20, we get 250 hours of available care if all the money were being spent on a CNA with someone staying in their home. Just for the sake of comparison, a full time professional job is 160 hours per month and there are ~720 total hours in a month if we wanted to understand what a 24/7 picture looks like. Let’s say a senior opted for 160 hours of home care. That leaves $1800/mo for food, entertainment, etc. Not bad.
So a solution that keeps cost equivalent for a senior who wants to stay at home will have some trade offs. They’d lose access to 24/7 care, but gain the comfort of being in their own home and would still be able to have a full time caretaker (160 hours per month). This begs the question of what technologies can mitigate health risks and send real time alerts when a caretaker is not there.
Can a model like this with innovative smart home & health monitoring technology & access to a direct and trustworthy caretaker marketplace offer a new, equivalent cost way to keep people in their homes, keep them happier and help raise the economic opportunity for caretakers?
4) AI, telehealth & preventive care innovations. It’s no secret that healthcare costs in the US are very high. I’ve learned a lot more about this over the past two years and feel a mix of disgust for the system and empathy for practitioners who want to do a good job. There are a few big problems.
a. Billing codes create strange incentives for provider visits and care plans. I don’t know a solution to this. I just wanted to point out how zany I’ve found our billing code system to be the more I’ve learned about it. This one requires a policy solution and based on the current Washington gridlock, it doesn’t seem like its happening anytime soon.
b. Specialized doctors (neurologists, cardiologists, etc) are very difficult to access and often do not have enough time to dedicate to each patient. I have had the opportunity to chat with a lot of neurologists over the past year because of a project I am working on. I am much more in awe of the human brain now after having learned more about it. But that can be the topic of another post. One of the recurring themes is how many patients each neurologist has to see and how little time they get to spend with each patient. Maybe 20 minutes every six months? Thats not ideal for anyone.
Innovations in telehealth are starting to solve this. One very cool company that I have worked with a bit is Sevaro Health. They make it easy for anyone to get connected for a virtual visit with a neurologist in a few minutes. Providing this type of online connectivity to a network of specialists can be a very efficient way to solve the scarcity issue and help more people with very specific issues get treated faster, earlier and with more attention.
c. AI for diagnostics and real time alerts. This is closely related to “b”. Another negative effect stemming from scarce access to specialists is that major problems often are not detected until a catastrophic event or well after preventative care measures could have been taken to resolve or improve the underlying issue. This produces two bad outcomes. Bad things happen to more people and because bad things happen to more people, care costs skyrocket.
Here is an example. The starting point for the diagnosis of Alzheimer’s is to take a short test called MoCA or MMSE that takes 15 minutes and is administered by a doctor if they suspect a person might have a cognitive disease. These tests are so basic that someone would only fail years after they’ into their cognitive decline. Taken together, if an older person sees a neurologist once a year for 20 minutes and the diagnostic tests used are so basic, we are diagnosing cognitive diseases years after their onset so any potential preventative measures are moot. Could we use data collected from their every day life or their performance of cognitive tasks to provide alerts when there appears to be a pattern moving in a concerning direction? Or how else can we automate the diagnostic work of specialists with data collection?
A company based in Israeli called K Health is taking an intriguing approach to diagnostics using AI (but not focused on senior living). Their AI technology uses data from your peer group to suggest the potential issues you are facing so you can get feedback without always needing to incur the costs and delays of seeing a doctor.
d. Clinical trial tools for geriatric conditions. There are platforms which connect patients with trials for specific conditions or diseases, but how about building an opt-in database of all people over 65 who are interested in access to clinical trials for any disease that disproportionately impacts older people. The cost of facilitating clinical trials is very high and part of that is finding qualified participants, especially older participants, since they are not accessible through as many communication channels.