Happily Aging: International Opportunities in Independent/Assistive Living

Harry Wang, Director of Mobile and Health

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Graying is a Global Phenomenon & Challenge

U.S.: 65 years and older will double to more than 70 million by 2030

Europe: Senior population will increase 77% and 80+ subgroup will rise 174% by 2050

Japan: 65 years and older will rise to 32% in 2030 and 41% in 2055, up from 20% in 2000

China: 60 years and older will rise from 10% in 2000 to 16.6% in 2020 and 28.8% in 2050 and 100 million will be 85 years and older by 2050

Alarming Numbers

Is the World Readily Prepared?U.S.: Shortage of care workers and high cost of institutional care put its long-term care system in crisis

Europe: Government is under the gun to improve long-term care coverage, increase staff, and make the service affordable

Japan: Severe shortage of skilled care workers and threat of pension cut

China: Insufficient long-term care infrastructure and rapid rising expenditure on senior care services threaten quality and affordability of senior care

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Retirement is a Financial Choice

In the U.S., the average cost of an assisted living home is about $3,000 per month while the average amount of social security check is around $1,200 per month.

The continuing-care retirement community (CCRC) in the U.S. usually asks for an entry fee averaging $250,000, plus a monthly expense of $2,500 to $5,400

In Japan, a one-month stay in a municipally operated nursing home costs close to 366,000 yen (3,000 dollars); a private nursing home room cost a move-in fee of $3,500, plus $1,200 to $1,650 per month to cover rent, utilities, and food

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Institutional Long-Term Care is Supplementary in Nature

U.S., institutional long-term care facilities accommodate about 2.5 million seniors or 8-9% of the total senior population

Canada: about 200,000 live in government provided or private long-term care facilities, and shortage of nursing home beds leads to long waiting time for prospective residents

China: less than one million seniors are living in a long-term care facilitythe majority are living in with their grown-up children

Europe: although there has been quick expansion of private and public funded nursing homes across Europe, total number of residents remain small.

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A Home/Community-based Care Model for Seniors

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Consumers are Searching for Options

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Living in the Home: Needs and Wants

Health

Control symptoms

Prevent hospitalization

Manage medication

Comfort diagnosis

Connection

Family members

Circle of friends

Community access

Fun in life

Safety Fall detection & prevention

Safe environment

Emergency response

Contribution

Sense of fulfillment

Legacy left behind

Satisfaction of life

Basic NeedsEmotional Wants

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Miscues by Tech Vendors Selling to the Eldercare Market

Build it first mantra: Great engineering does not translate into market success

Underestimate the intricacies of the healthcare marketplace: Even in the direct-to-consumer market, rules of engagement are different from the traditional tech market

It helps manage your health condition (save your life)!: Nothing wrong in the message itself, but completely wrong for marketings sake

Dedicated home gateway: Another box in the home?

Recommended StepsSlide

Success Factors for Home-based Eldercare Models

Challenges

Technology complexity puts off seniors

Seniors live with limited financial resources

Compliance rate goes down over time

Low awareness and trust about solution

Opportunities

Bring learning fun into users experience and add killer apps like connecting to family

Lower prices to mass market levels

Auto-configurable, highly interactive, low maintenance, and constant feedback with rewards

Leverage partners influence to gain market advantages

Make it less about technology specs, but fun and immersive

Make it affordable or secure private or public reimbursement

Make it less intrusive or reward continuous use with incentives

Work with partners and care givers to nurture market

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Success Factor: Affordability

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Success Factor: Revolutionary Designs

Intel Health Guide10.4-inch screen and $500 and up

Features personalized care management, patient reminders, surveys, multimedia educational content, and communications tools

It is medical grade, but who cares in the consumer market?

Apple iPad9.7-inch screen and between $499 to $749

Numerous apps will surface to support self-care needs of all kind of people, including seniors

It is not a medical device, but who cares in the consumer market if it offers easy and immersive experience

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Success Factor: Partners

A Good Partner Must:

Have a long-term vested interest in the eldercare market instead of short-term financial gains

Have resources to reach out to potential users or payers of eldercare

Have expertise or a platform to drive down total solution costs

Have channels to support feasible business models

Have expertise to guide through regulatory and policy landmines

Types of Partners Include:

Health plans or employers

Healthcare provider groups or retail operators

Existing popular device/service platforms

Have channels to support feasible business models

ACOs, retirement communities, medical home centers

Industry associations and consortia

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Example 1: Grandcare Systems

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Example 2: Halo Monitoring

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Example 3: American Medical Alert Corp.

Basic/Mobile PERS: Emergency response made more convenient with built-in mobility

MedSmart: Medication reminder and dispensing system

Health monitoring: Daily health symptom monitoring adds additional value

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Market Opportunity: United States

Near-Term:

PERS Upgrade: slower industry growth encourage PERS providers to diversify revenues

Telecom and broadband service providers: eager to launch value added services to mitigate revenue loss on fixed line or voice services

Residential and retirement home builders: independent living is a strong selling point of new breed of retirement homes/communities

Post-discharge at-home rehabilitation: reduce re-admission by keeping patients in the home

Longer-Term

Obama health reform provisions reward care coordination through payment model innovations

Cash benefits for long-term care beneficiaries may spur higher usage of in-home safety and health monitoring for independent living

Self-insured employers begin to understand caregivings impact on employee productivity, thus willing to subsidize independent living solutions

Expansion of Medicare/Medicaid long-term care benefits to cover independent living solutions

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Market Opportunity: Canada

Longer-Term

Plan to offer integrated care services will increase seniors appetite for aging-in-place technologies

Expansion of the Veteran Independence Program (VIP) to seniors

Expansion of the compassionate care benefit will provide better incentive to caregivers for adopting independent living solutions

Governments inability to meet fast growing demand for independent living housing could lead to a private boom of senior retirement housing market

Near-Term:

PERS Upgrade: slower industry growth encourage PERS providers to diversify revenues

Telecom and broadband service providers: eager to launch value added services to mitigate revenue loss on fixed line or voice services

Provincial government s interest in pilot programs that solicit private and public sectors collaboration to address seniors independent needs

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Market Opportunity: Japan, South Korea, China

Longer-Term

Expansion of coverage of house call program as part of long-term insurance scheme (Japan)

Reorganization of informal care as reimbursable within the long-term insurance scheme (Japan & Korea)

Urban housing project and retirement home for seniors (China)

Near-Term:

Fast growing of private nursing homes for home-alone seniors (Japan)

Employer market as employment benefits for expatriates who are concerned about elderly parents (Japan & South Korea)

Telecom and broadband service providers: eager to launch value added services leveraging their existing infrastructure and client devices as part of their smart home initiative (Japan & South Korea)

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Market Opportunity: Europe

Longer-Term

Consumer allocation of personal budget to independent living technology acquisition

Adoption of technology by government-owned or subsidized long-term care facilities

Expansion of the informal care benefit will provide better incentive to caregivers for adopting independent living solutions

Near-Term:

EU-sponsored independent living pilots and research programs

Government sponsored senior housing programs and/or grant programs (e.g. U.K.s Preventive Technology Grant)

Private nursing home builders and operators and home care agencies in Europe

Telecom and broadband service providers: eager to launch value added services leveraging their existing infrastructure and client devices as part of their smart home initiative

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Concluding Thoughts

From Passive Aging to Active Aging: New wave of retirees are much more well-versed with technology and have a different perspective on aging than the previous generation

From Episodic Solutions to Continuum Solutions: from early aging to late aging, consumer needs shift

Business Models, Business Models: whats the right price point for whom? What partners matter most to you?

Interest Alignment: Who gets the benefits and who gets paid? Will we cross the chasm between private pay and insurer reimbursement?

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Thank You

Harry WangDirector, Health & Mobile

Parks Associates5310 Harvest Hill Road, Suite 235Dallas, Texas 75230

Direct: 972-996-0227Harry@parksassociates.com

Parks Associates expertise is derived from a combination of primary research and industry analysis. Each year, Parks conducts a number of primary research surveys to understand the connected home and consumer digital lifestyles.

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