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.

Comments welcome!