What’s the best setting for seniors’ health and well-being, and what can be done to create more affordable options?
By Brian A. Lee
Age is just a number, the adage goes, but in this country’s unique demographic and healthcare environment it’s actually a lot of numbers: people, dollars and decisions.
Consider that about 10,000 Baby Boomers will retire every day from 2010 to 2029, according to the Pew Research Center.
A study by the National Conference of State Legislators (NCSL) and AARP Public Policy Institute found that nearly 90 percent of people over the age of 65 want to stay in their homes, or “age in place,” for as long as possible.
Aging is on just about everyone’s minds, perhaps now more than ever given that the 15.1 percent increase in the 65-and-older population between 2000 and 2010 has only continued to escalate. If lifestyle guru Martha Stewart is correct, and 70 is indeed the new 50, then the “aging in place” trend could send healthy shock waves through the seniors housing sector and beyond.
A holistic definition of aging in place
“Aging in place really is a relationship of function, identity and economics,” said Martha Pelaez, founder of Florida Health Networks. “I usually invite people to think for a minute how they’d like to celebrate their 90th birthday. If you do that, now you have a goal for aging in place, whatever place that might be.”
Florida Health Networks is a subsidiary of the Health Foundation of South Florida, which since 1993 has awarded more than $110 million to public and nonprofit organizations focused on improving health and health services in Broward, Miami-Dade and Monroe counties.
Pelaez’s comments came during a recent panel discussion in Miami hosted by the National Association of Real Estate Editors. Joining Pelaez on the panel — titled “Boomer Decisions: Aging in Place, Finding Affordable Urban & Senior Communities,” — were Joe Weisenburger, vice president of seniors housing at Toledo, Ohio-based Health Care REIT, and Richard Hutchinson, co-founder and president of Bonita Springs, Fla.-based Discovery Senior Living.
Given the long-term demographics and aging-in-place trends, it’s little surprise that the Bureau of Labor Statistics forecasts a 70 percent increase in home health and personal care aides from 2010 to 2020, resulting in more than 1.3 million jobs.
According to BCC Research, a Massachusetts-based firm analyzing business change driven by science and technology, the market for remote monitoring and telemedicine applications will more than double from $11.6 billion in 2011 to about $27.3 billion in 2016.
A matter of choice
“The driver is ultimately the consumer,” said Weisenburger of Health Care REIT, an S&P 500 company with a portfolio of more than 1,400 seniors housing and healthcare real estate properties in 46 states and internationally.
“Seniors housing has transformed in specialty and sophistication. There are far more amenities today and specialized programs that focus on mobility, nutrition and cognition,” adds Weisenburger. “These programs are hard to replicate with the aging-in-place model because it requires huge investments in people and infrastructure.”
Since 2008, Pelaez has led the Health Foundation of South Florida’s Healthy Aging Regional Collaborative. For the past six years, the organization has served as the main support organization for aging service providers to deliver “evidence-based health and wellness programs” to more than 38,000 individuals.
Today’s Boomers are predominantly focused on active-adult lifestyle choices now versus aging-in-place needs and beyond, but eventually they will need to begin planning for the next stage of their lives.
“At 20, we can survive almost any environment, but at 70 not so much,” said Pelaez. “So, how does my environment support my changing abilities and enable me to continue to do what I want to do? Envisioning what you want to do at 90 and doing that preliminary planning for how to get there is aging in place.”
Costs never seem to stay in place, however. Economics are not only a major factor for aging in place, but they also often constitute a major barrier. Medicare does not cover long-term housing needs for seniors and only covers home healthcare on a short-term, physician-prescribed basis.
“Remodeling a home [to age in place] is expensive, so it is important we really think about it in terms of universal design,” explained Pelaez. “I cannot afford to change my bathroom every 10 years. I really need to do it in a way that’s going to last because it’s a major investment, and that’s true for every room in your house.”
A personal case study
Pelaez said she was “very fortunate” when her 95-year-old mother came to live with her, a transition that served as a training run for aging in place. The focus turned to making the kitchen, bathrooms and other living spaces in her condo not only “age-friendly,” but also cost-effective. Specific modifications included de-emphasis of high kitchen cabinets, establishing thermostat-controlled showers and installing automatic appliances.
“Room by room I looked at how I could adapt that environment without any major expenses and focus on those types of things that are convenient today but tomorrow might be essential,” she said. “As we go through home modifications, basic principles really work. They’re good for 60-year-olds, and they’re great for 90-year-olds.”
Modifications to one’s home are a key component of aging in place, but the external environment is also of great importance for seniors. Community is very much a part of identity, Pelaez asserted. The “in thing” with regard to aging in place could stand for integration.
“We’re really thinking about a multi-purpose, mixed-use, urban space,” she added. “A two-story house was perfect in a community where you actually could go to a mall and drive to different places. Not so much when you’re 80. Age-friendly communities are ones that look at walkability and accessibility, as well as social environments. The problem is that many people moved to suburbia heaven at one point when they had three kids and three cars and they were looking for good schools.”
The NCSL and the AARP Public Policy Institute examined state land use, transportation and housing policies that could better support aging in place. The policies include integration of those three key components: efficient delivery of home services; more transportation choices; and “improving affordable, accessible housing to prevent social isolation.”
“Seniors today want to be with their same generation, mixing and mingling,” said Leo Griffin, a vice president at Atlanta-based HealthAmerica Realty Group, who has more than 30 years of experience serving the healthcare community, including the real estate and technology segments. “The active seniors lifestyle demands options, engagement and more focus on community.”
A healthy senior community is one that is near day-to-day resources such as grocery and pharmacy outlets, and open with regard to spaces that foster more opportunities for socialization.
“Generally, a community where I could age in place would have multiple transportation services,” said Pelaez. “That community will be walkable, so that I can actually move safely from where I am to where I need to buy my milk or fill my prescription and get my basic needs met. It is really going to be a livable community, and today we’re looking at communities that have those ‘complete streets’ and those open spaces that have good transportation.”
A survey of “livability policies and practices” conducted by NCSL and the AARP Public Policy Institute found that 25 states — plus Washington, D.C. and Puerto Rico — have “complete streets” policies, which ensure safe thoroughfares for walkers, bicyclers, motorists, public transportation users and delivery service professionals.
On the housing front, the study emphasized seniors accessing the federal Low-Income Housing Tax Credit program, encouraging developers to create more accessible buildings, and supporting neighborhoods with large populations of older adults active in their communities.
Dollars and decisions
Weisenburger told the NAREE audience in Miami that aging in place is a great option for those with the financial means, giving a nod to Pelaez’s enlightening example, but the benefits of other seniors housing options should be considered.
“Each senior has a different decision that he or she is going to have to make,” said Weisenburger. “But for a lot of others, the more institutional setting is going to be a better avenue for them. It’s where we can more cost effectively as a country and an economy take care of people.”
Hutchinson of Discovery Senior Living, which develops and manages a host of senior living community brands across the Southeast and also provides Medicare-certified home healthcare services, underscored the institutional advantages.
“Frankly, when Martha was describing the things you need to consider in your own home to age in place, those are all of things we consider in our [seniors housing] design aspects,” he said. “The delivery of that can be much more efficient, and you don’t have to struggle to think of all these things yourself.”
Not surprisingly, the last but certainly not least component in Pelaez’s function-identity-economics formula for aging in place takes little time to resurface in the discussion about senior living and care. “There’s always going to be that gap between those who don’t qualify for Medicaid and those who can’t afford the high-end care,” she said.
“The biggest challenge we have is on the affordability side,” said Weisenburger of Health Care REIT’s target tenants.
“We’re very much [focused on] middle-income to upper-middle income and above just because that’s the cost of developing product. Home health is a great option, but it’s very expensive to take care of 50 different people who all live in 50 different places, and to truly care for them in the appropriate way.”
An evolving product
Hutchinson said today’s seniors industry offers a “plethora of senior apartments” and thus different cost entry points. With optional or “a la carte” services, seniors can find housing for approximately $1,500 per month versus $2,800 to $3,000 for full-service facilities.
Weisenburger asserted that to “really get to the crux of the [cost] issue” changes to the Medicaid and Medicare reimbursement systems will be required “to allow the money to travel with the person and put them in the most appropriate setting and to allow more people to have dollars for their care.”
Hutchinson singled out the Illinois reimbursement program as one that allows “Medicare dollars to follow the patient.” He also touched on the power and influence of the nursing home contingent in maintaining the status quo in senior care.
“The issue and challenge has been the nursing home lobbies that don’t want to lose those patients because they need to keep their facilities full,” he said. “If you put Resident A in a nursing home that charges $200 a day, that’s $6,000 per month. If you can take care of him in assisted living for $3,000, you’ve now saved the state $3,000 a month. That person is in a more appropriate setting, but also a more cost-effective setting.”
Funding based more on function and identity, Pelaez’s pillars supporting aging in place, would give seniors healthy options and provide the states with much-needed budget savings. The Congressional Budget Office reported that by 2039, spending on healthcare programs will account for 14 percent of GDP versus the 7 percent average during the past 40 years.
“Everyone has a choice, and they should have that choice,” Hutchinson said. “They need to have a way like they do in Germany where the care is provided by the state, or they’ll give you money for the [private] care.”
Germany provides long-term care coverage for nearly all of its population. Thus, more private home care service providers and new residential options arose; fewer German families were forced to care for the elderly in their homes.
Demographic tsunami still to come
Retirement for the Boomers, who are expected to live longer than any previous generation, will be a market revolution in and of itself, according to Hutchinson.
“Baby Boomers are not direct consumers of what we’re providing today,” Hutchinson said. “Obviously, 10 years from now when they reach our prospects’ age they’re certainly going to have an impact on supply. We don’t have nearly the supply to handle that demand.”
Add to the equation the expanded Medicaid coverage and continued technological innovation in the sector. Enhanced vision and planning will undoubtedly be required.
The housing industry won’t satisfy the surge with product quantity alone. Boomers will bring many dynamics to the equation and, given the aging-in-place momentum, will set their own pace.