Recognizing the Loneliness Crisis Among Older Adults Is a Vital First Step 

Posted by CC Andrews

Mar 4, 2018 10:00:00 AM

Being lonely is not a new phenomenon, just think of all the pop songs with the word lonely in them or the melodramas that play out on television and film in which characters feel isolated or lost in their own world. When it comes to reality and the issues of loneliness among older adults, however, the repercussions are rife with physical and emotional costs and are not cured by pep talks or Hollywood happy endings.

Nursing Home Stays_1920 copyA new study from the IBM Institute for Business Value and the IBM Aging Strategic Initiative puts the human and economic price of loneliness in perspective as a way to not only deal with the psychic toll of being lonely, but also to offer ideas to help limit the problem.

IBM’s research revealed, among other things, that families and caregivers of those affected by loneliness leaves them feeling overwhelmed by the chore of filling in for the social gaps in their loved one’s or patient’s life, while at the same time ensuring their medical care is top priority.

“Frequent visits by older adults to their physicians for social interaction also strain limited health care resources by diverting them from other acute needs,” IBM found. Often, this process leads to what doctors call “somaticizing,” which is defined as a person who converts anxiety into physical symptoms. There is no underlying ailment to cure, as the interaction with a doctor is instead a cry for social interaction.

Even with the knowledge of what loneliness does to older adults, there are barriers to knowing how to proceed, the report says, running the gamut from the stigma associated with the condition, the lack of a screening process, and inaccurate assumptions prioritizing technology over the personal and customized.

But, there is always hope. And, many communities around the country and world are offering solutions like in England where postal workers are trained to do call and checks to see how isolated residents are doing, or in Japan where specific communities are being constructed to cater to more social interaction allowing residents to age in place.

Professor Hiroko Akiyama of the Institute of Gerontology at University of Tokyo said in the report that society needs an entire redesign in order to address loneliness. Akiyama also noted that there is tremendous potential to engage with new and existing industries, organizations, and agencies to create more holistic solutions that better support the aging population and help them maintain social connections. Examples include:

  • Intergenerational living: Co-housing programs, as explained in a previous post, are shared living areas for older adults and younger generations can contribute to the exchange of support and companionship between residents.
  • Post-retirement careers and education opportunities: New partnerships among employers, universities, and government agencies that can create new work options, in addition to the opportunity to build new skills and associations.
  • Autonomous transportation: Older adults may be the most enthusiastic early adopters of self-driving vehicles, claims the report. This mobility option can restore their independence and re-open social engagement with the community.

All told, it’s going to take a new kind of village to make loneliness less prevalent, the report implies. In the longevity economy, that village must include entities that can come together to find solutions.

If you want a focused approach to staying relevant in the longevity economy that is facilitated by experts in the senior living field, contact Quantum Age today. 

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Topics: longevity economy, Business

Survey Finds Urbanites Confident About Staying in Cities as they Age

Posted by CC Andrews

Oct 18, 2017 11:05:00 AM

Cities—you either love ‘em or you hate ‘em. Whichever side you are on, there is no denying that urban areas in the United States and across the world are growing. Some expert futurists predict that by 2038, most QA blog welltower .jpgurban areas will become megacities that will be “major political forces in countries due to their embrace of smart technologies to manage transportation, energy, and waste.”

Welltower Real Estate Investment Trust apparently has a similar prediction because they recently conducted a survey that examines what city dwellers think about retirement and aging issues and it’s pretty interesting. The survey, which was conducted in the spring, “among an audience of 3,000 adult participants across 10 cities” (Boston, Chicago, Houston, Los Angeles, Miami, New York City, San Francisco, Seattle, Toronto, Washington, D.C.), included Millennials, Generation Xers, and Baby Boomers.

Titled “Aging in Cities 2017 Report,” the study yielded some interesting data about how different age groups feel about aging, health care, and their financial preparedness for retirement. It also identifies, for those of us plugged into the longevity economy, some new opportunities with regard to people who want to age in cities and how their attitudes may impact urban living for the years ahead.

Herewith are some highlights from the report:

1. Health Care Services and Facilities for Aging in Cities

  • This section of the report found that six out of 10 (61 percent) of city dwellers felt that having a good doctor is their highest health care priority as they age. Distance from health care facilities was less important, according to 21 percent of respondents.
  • Nearly half (47 percent) of the respondents felt that there was a need for different options for aging at home, and 40 percent identified a need for more senior living communities within their cities. Not surprisingly, Baby Boomers were found to be most focused on senior housing options: 54 percent expressed the need for options to help aging citizens stay in their homes and 43 percent believed their cities were in need of more senior living communities.
  • Sixty-six percent of the respondents expressed concern about dementia and one-third (34 percent) wanted more options for dementia care in their cities. Forty percent said say their city needed more mental health providers for older people and 33 percent cited the need for more memory care communities.
  • Worth noting are the data around how dwellers of specific cities felt about health care services. In Chicago, for example, respondents wanted to focus on mental health providers and dementia care, while those in New York, Los Angeles, and San Francisco wanted more senior living communities and memory care facilities than the overall average.

2. Cost of Living and Financial Priorities

  • Two-thirds (66 percent) of respondents said they believe they will have the financial means to live in the city at 80-plus, with 75 percent of Millennials and 58 percent of Baby Boomers reported believing they will have enough money to live in the location and place of their choosing when they are 80-plus. Toronto, San Francisco, Houston, Boston, and Seattle residents who were asked to think about their 80-plus year-old selves said that maintaining their current quality of life in the area they live now was the top financial priority. In New York, Los Angeles, and Chicago, however, residents reported that lowering their cost of living and housing costs from what they pay now was their top priority for retirement yea
  • This may not be surprising but serves as an underscore to what many longevity economy operatives know: The top five activities that respondents expect to give them purpose at 80-plus years of age are: pursuing a hobby, volunteering, exercising/group or individual sports, caregiving for family and friends in need, and engagement with their religion and place of worship. One in five respondents said that full- or part-time work, either in their current occupation or a new field, would give them purpose at that age.

3. Home Features for Aging in the Cities

  • For 36 percent of the survey respondents, aging in place in their current home was the first choice when asked what they wanted in their 80-plus years. One-third said their preferred choice would be to move to an age-friendly home, either a smaller apartment designed with special features (18 percent) or a senior living community with full amenities and access to the city’s offerings (17 percent).

Welltower Executive Vice President Mercedes Kerr says in the afterword of the report that she hopes it will “spark new conversations to create positive change that benefits our senior population.” I couldn’t agree more. In addition, I hope the report will also illuminate the opportunities for innovation in aging services.

Contact us to learn how Quantum Age can help you leverage opportunities sparked by the longevity economy.

 

 

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Topics: senior living, longevity economy, cities

A Global Perspective on Aging & the Longevity Dividend

Posted by CC Andrews

Oct 2, 2017 10:00:00 AM

When The Economist covers your issue you know it must be a big one. It seems as though the rest of the world continues to catch onto the fact that there is a growing cohort of older adults around the globe,global aging.jpg mainstream media is beginning to ponder the collateral issues and recognize that there are legit news stories to be told.

So it is that The Economist recently published a special report, the title of which is descriptive enough: The New Old. It examines many of the same issue that those of us in the longevity field have already deconstructed and analyzed several times over. However, it also sheds light on some of them from new angles, including a much more global perspective, which is refreshing.

The paper covers the future of work, finance, technology, and dating for older adults. It also posits that the “longer, healthier lives that people in the rich world now enjoy (and which in the medium term are in prospect in the developing world as well) can be a boon, not just for the individuals concerned but for the economies and societies they are part of.”

The key to unlocking this longevity dividend, the authors assert, is to “turn the over-65s into more active economic participants.” Herewith is a sampling of topics covered in the report:

Work: It’s no surprise that older workers are delaying retirement and staying in the workforce longer. The report examines the work ethic of baby boomers, their use of the gig economy, and their entrepreneurial spirit. As the authors note, people between 55 and 65 are now 65 percent more likely to start up companies than those between 20 and 34. In Britain, 40 percent of new founders are over 50, while almost 60 percent of those 70 years and older who are still working are self-employed. 

Finance: The longevity of our society means that retirement accounts, pension funds, and savings are at much higher risk of being depleted before its beneficiaries die. And in Europe, public pensions are still the main source of income for those over 65. What’s more, in both America and Britain public provision replaces around 40 percent of previous earnings, but in some European countries it can be 80 percent or more, the report says. “Where it makes up a big share of total pension income, as in Italy, Portugal, and Greece, a shrinking workforce will increasingly struggle to finance a bulging group of pensioners.” Defined benefit plans are much more popular today as a way to offset the bleeding private pension schemes. Given this new societal conundrum, the authors assert that the financial industry needs an overhaul. First, they suggest that it should “update the rigid three-stage life-cycle model on which most of its products are based.” Second, there needs to be a solution to the chronic under saving during working life and over saving during retirement. Third, the report suggests that a more creative approach is needed to the range of assets that pensioners can draw on. Making matters more complicated is the fact that the longer people live, the more varied their life cycle will become. “Workers will take breaks to look after children or go back to school; pensioners will take up a new job or start a business.” Financial providers need to recognize these changing needs and address them, the report advises. “That includes helping to fund technology that could vastly improve the final stage of life.” 

Technology: Tablets, remote sensor technology, smart homes, and more all hold promise for elders as the numbers grow. But funding mechanisms will be needed, especially for those less able to pay for the technology outright. The authors suggest that both the government and insurance companies may consider taking this on, especially since they have much to gain from prevention.

In conclusion, the report conjures up concerns about human longevity and suggests that if technologies, research, and new treatments keep up and are not soon addressed, “it could prove highly disruptive.” According to the authors, economies could suffer, social tensions could erupt and progress on gender equality might be reversed as many more women were obliged to become caregivers for elders. 

To avoid this dilemma, the authors say, societies and economies must start in earnest to prepare for those longer lives right now. No kidding.

If you want a focused approach to your strategic decisions, facilitated by experts in the senior living field and candid feedback, contact Quantum Age today.

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Topics: Aging, longevity economy, global aging

Retirement Income, Healthcare Costs, and Homeownership—Food for Thought on the Future of the Longevity Economy

Posted by CC Andrews

Sep 20, 2017 11:00:00 AM

A recent National Investment Center for Seniors Housing and Care (NIC) blog post caught my eye because it covers some important topics and research relevant to senior living providers and their prospective thought-2123970_1920 copy.jpgcustomers. Author Lana Peck outlined studies on Social Security, medical spending, and retirement and security. Specifically, the post covers how Social Security will impact the behavior and consumption patterns of seniors and health costs and their impact on retirement security.

One study that examined how Social Security benefits are affected by out-of-pocket medical spending found that the average retiree spends a substantial share of his or her Social Security income to health expenses. What’s more, premiums make up largest share of medical spending for most retirees. Not really a surprise, I know, but consider the following additional stats from the study:

  • 75% is the average amount of social security benefit left for non-medical expenses for the average retiree.
  • 30% of retirees’ household income is spent on housing, taxes, and non-housing debt.
  • 10% of retirees (give or take) have less than one half of their OASI (Old Age Survivors Income) remaining for non-medical expenses.

Peck also noted that, in addition to these findings, Medicare beneficiaries also pay more out-of-pocket for health care as a share of household expenses than non-Medicare households, “and with health costs projected to rise more rapidly than Social Security income, these trends are likely to continue and worsen over time,” she said.

In another study, researchers determined the anticipated costs for “health shocks” (one or more of eight health conditions and three intensive health events) that they found specifically cause significant declines in net worth including stroke, cancer, lung disease, and health-related events such as hospital and nursing home stays, (including the loss of a spouse), and applied factors of net worth including home equity, other real estate, and business and financial holdings. Their findings:

  • Someone at age 65 could expect a decline of between $30,000 and $90,000 in overall wealth depending on their gender and marital status due to health conditions.
  • Some health shocks are more costly than others. Specifically, lung disease ($29,000), stroke ($25,000), nursing home care ($15,000), and spousal death ($30,000).
  • The “wealth cost” of health shocks is about 9% of household net worth at age 65 for married individuals and for single men, but about 22% of net worth for single women.

Yet another study looks at issues around using homeownership as an investment that can be used in late life as income for health costs in retirement. This may be a sure safety net for current, older homeowners but for future cohorts, the ability to buy homes is fast becoming more and more elusive.

As the blog’s author puts it: “This research is especially important because of the aging population, increased life expectancy, and increasing health costs which shed light on the need for retirement planning that includes preparing for late life health shocks.”

I couldn’t have said it any better. This research is worth a deeper dive to get at the heart of the relationship between consumer health and financial trends to help inform your strategic decisions.

If you want a focused approach to your strategic decisions, facilitated by experts in the senior living field and candid feedback, contact Quantum Age today.

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Topics: longevity economy, retirement, social security, health care costs

The Need for SNF Care Way More Likely for You and Me (and Everyone Else) But an Opportunity for Providers

Posted by CC Andrews

Aug 29, 2017 4:46:00 PM

FYI: most people who are now between 57 and 61 will experience short stays in skilled nursing facilities (SNFs). Yes, you read that correctly. According to new research from the RAND Corp., 56 percent of people within this age range will stay in a nursing home at least one night during their lifetime.

Why this isn’t getting more ink in the industry press, I don’t know, but the research asserts that the average American’s lifetime risk of needing SNF care is 60% greater than previously estimated. The U.S. Department 

204242-675x450-funelderlylady.jpgof Health and Human Services has previously estimated that only 35 percent of older Americans are likely to use a nursing home in their later years, and other studies have concurred with this finding.

Although the costs of the stays are expected to be “relatively affordable,” the RAND researchers expressed concerned that consumers be informed of their findings so they are prepared. But their message is also an important eye opener (and opportunity) for LTPAC operators.

To get to their conclusion, the researchers analyzed 18 years of data from the Health and Retirement Study, a longitudinal project of the National Institute on Aging and the Social Security Administration. They found that for most people, “nursing home care will be relatively affordable—about $7,300 per person over a lifetime.”

Also interesting about the finding is the fact that some 43 percent of Americans between 57 and 61 will be completely covered by private or public insurance for their nursing home stay, while about one-third will spend any of their money on nursing home care over their lifetimes.

What’s the reason behind this revelation? According to RAND, the cause could be the shift to shorter stays. The study found that nursing home stays of short duration (21 nights or fewer) rose from 28 percent in 1998 to nearly 34 percent in 2010.

In the release, head researcher on the study, Michael Hurd, posited that the increase may reflect efforts to control Medicare and Medicaid costs by more quickly discharging patients from hospitals to nursing homes, where rehabilitation costs are lower.

While the opportunity here for LTPAC operators is apparent, experts who have recently weighed in on the outlook for this segment point to the fact that CMS is on track to ensure that 50 percent of fee-for-service Medicare payments be made through alternative payments models by the end of 2018. Providers who have learned to adapt to this new climate and take on risk through bundled payment initiatives, accountable care organizations, managed care models, among others, will likely be better off in the long run.

If you would like to raise your profile and tap into the longevity economy, contact Quantum Age today.

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Topics: Senior care, long-term and post-acute care, longevity economy, nursing home

Life Expectancy Disparities Point to Opportunities for Aging Services Innovation

Posted by CC Andrews

May 12, 2017 11:33:21 AM

A Washington Post article about life expectancy in the United States caught my eye recently—not because it was about how people are living longer (in general, we are) but because there are several places in the country where life expectancy is reversing. In other words, as Reporter Joel Achenbach points out, in many pockets of the United States, life expectancy is more than 20 years lower. “Death rates are going Life expectancy and longevity economyconspicuously in the other direction,” he notes in the article, citing a recent study in the Journal of the American Medical Association.

There are of course a number of reasons why this indicator is troubling, but as a disciple of the longevity economy, I find it particularly unsettling given the massive opportunities that aging services innovators have and continue to offer older adults and their families and loved ones.

According to the JAMA study, “much of the variation in life expectancy among counties can be explained by a combination of socioeconomic and race/ethnicity factors, behavioral and metabolic risk factors, and health care factors.” Reversing the trend of increasing disparities may be helped by “policy action targeting socioeconomic factors and behavioral and metabolic risk factors,” the authors point out.

In his article, Achenbach points to other research showing that the United States is failing to keep up with improvements in longevity seen in other affluent nations. “In 2013, researchers described what they called a ‘health advantage’ in the United States when compared to peer countries,” he writes, adding that more recent research has focused on “diseases of despair” that have contributed to a precipitous rise in death rates among midlife working-class whites.

I appreciate that Achenbach calls attention to this issue. And although I am not an epidemiologist, it seems to me that with all of the shiny new technology and innovations coming from our beloved field there should be some fundamental steps we can take to include everyone in our journey toward longevity and leveling these disparities.

That said, there are also plenty of opportunities for aging services entrepreneurs to take on this challenge with success.

If you want a focused approach, facilitated by experts in the longevity economy, as well as honest feedback, contact Quantum Age today.

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Topics: longevity economy, innovations, thought leadership

Wide-Reaching CMS Rule Opens the Door for Innovation

Posted by CC Andrews

Feb 15, 2017 12:24:00 PM

The final rule on the requirements for nursing homes to participate in Medicare and Medicaid is a bit of a behemoth, but it’s an important one since it touches nearly every aspect of a facility’s operations. In particular, there are many implications—as well as opportunities—within the longevity ecpexels-photo-52910.jpegonomy, especially for vendors in the long-term and post-acute care space.

Thanks to the agency’s willingness to meet with providers and educate the public about the rule, we have an idea of what to expect from it, current politics notwithstanding. Karen Tritz, head of the Centers for Medicare & Medicaid Services’ (CMS’) Division of Nursing Homes, offered an inside scoop on the rule at the Jan. 31 meeting of the Advancing Excellence in Long Term Care Collaborative (AELTCC).

Other than the fact that the requirements have not been updated since 1991, Tritz reported that CMS overhauled the rule to further advance its efforts in person-centered care and resident quality of care and quality of life. “Think of rule as raising the bar on quality,” she said.

The first thing to know about the rule is that it will be rolled out in three phases. The deadline for implementation of Phase III is slated for November 2019 (Phase I, which ended Nov. 28, is allegedly complete).

A look at some of these requirements should tell you that some of them may not be easy for providers to track or even implement. Vendors should seize this opportunity to develop solutions and innovations that can make providers’ and operators’ work easier:

The following items are scheduled for release or completion by the end of Phase II (Nov. 28, 2017):
  • New interpretive guidance, as contained in the State Operations Manual (SOM). An advance copy of the SOM will be available to the public early this summer. It will also include an overhaul of the F-tag numbers.
  • Development and testing of a new survey process will begin.
  • Implementation of the Quality Assurance and Performance Improvement (QAPI) program.
  • Update of infection prevention and control programs, which requires an infection-prevention and control officer and an antibiotic stewardship program that uses antibiotic-use protocols and a system to monitor antibiotic use.
  • Care planning improvements for discharge planning for all residents, with involvement of the facility’s interdisciplinary team and consideration of the caregiver’s capacity; giving residents information they need for follow-up after discharge; and ensuring that instructions are transmitted to any receiving facilities or services.
Following are the Phase III items:
  • Finalization of the QAPI implementation and discharge planning and infection control requirements.
  • Implementation of the requirement that call lights must be present at the bedside of all residents.
  • Implementation of new compliance and ethics programs to bring current programs into compliance. Programs must include written policies and procedures to reduce criminal, civil, and administrative violations and must be reviewed and revised annually. For organizations with five or more facilities, programs must include annual training, a compliance officer, and a designated liaison located at each facility.

There are obviously a number of provisions where long-term and post-acute care vendors, such as software solution providers, consultants,  and more can offer solutions and opportunities to make navigating the process easier.

It’s also worth noting that as the rule is rolled out, CMS will implement a new, common survey for all providers by the end of Phase III. The new survey will include elements from both the traditional and the newer Quality Improvement Survey process that has been implemented in more than two-dozen states since 2007. Also part of the new survey will be “new and innovative approaches” and a “balance between structure and surveyor autonomy,” Tritz noted.

I will post more updates as implementation of the rule moves forward. In the meantime, you can read the entire rule here.

If you want a focused approach to creating innovative solutions for elder care, facilitated by experts in the field and candid feedback, contact Quantum Age today. 

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Topics: long-term and post-acute care, quality, longevity economy

Competition & Reinvestment: the Future of CCRCs & Senior Living

Posted by CC Andrews

Jan 17, 2017 8:00:00 AM

No matter how often the stats about the impending wave of aging Baby Boomers are cited, it seems that senior living providers, policy makers, and even society as a whole have yet to heed them.QA Blog Photo future senior living.jpg

A session at the recent LeadingAge conference highlighted this fact, and the presenters’ message was clear: if you don’t do something now to shift your paradigm and focus on consumers’ needs and desires, among other things, you will miss out on a golden opportunity to not only thrive in the longevity economy but also stay true to your organization’s mission.

Mark Andrews, co-CEO of Irving, Texas-based Greystone Communities, led the session, which was aimed at identifying opportunities and challenges for providers while at the same time maintaining a margin that “enables long-term mission growth.” According to him, the current landscape of the industry is as follows:

  • High growth curve and a demographic shift;
  • A long economic recovery;
  • A strong real estate market and improved household wealth;
  • Low interest rates;
  • Increasing competition;
  • Evolving and changing customers;
  • Aging CCRCs; and
  • A growing number of providers.

Historically, Andrews noted, providers have had a paternalistic approach to their business model. “We knew what was best for the consumer and we would make it available when we thought they needed it.” With that, Andrews outlined some things that providers should do (and know) to ensure success going forward: 

  1. Your business model needs to change to be more consumer-focused and resident-centered. The new model, Andrews explained, must wrap the continuum around seniors’ needs and offer services “when they think they need it,” versus the provider making that decision.
  1. Communities with lifestyles of engagement, purpose, and connectedness will thrive. In addition, you will have strong demand if you have the right product, right location, and the right approach to services.
  1. Services need to be priced in a way that suits the consumers’ economic circumstances. It will require a different mindset and the ability to serve the upcoming generation of seniors, who will want much more flexibility and programming than the current model offers.
  1. The labor pool will be a significant factor. Movement to a $15 minimum wage will affect providers’ ability to recruit and retain staff. “It will have a profound impact on the economics of senior living and your ability to afford it,” which will lead to some stress, said Andrews.
  1. Reinvest and remodel your aging physical plant. One-quarter of all CCRCs are between 20 and 35 years old and 22 percent are between 15 and 25 years old, while 12 percent are more than 35 years old. Knowledge is power in this case, Andrews noted: if your CCRC is relatively young, you will have an advantage over most CCRCs in the country.
  1. A large number of replacement independent living units will be required over the next 15 years. Between 175,000 and 200,000 additional incremental and replacement independent living units will be needed between now and 2030 to keep up with replacing aging physical plants as the demand for them grows.
  1. Competition is on the rise. A growing number of providers nationwide are investing in expansion and repositioning and/or growth. Behind this development are the following factors: more capital availability, aging communities, and growth in for-profit rentals in assisted living, memory care, and more.

Whatever your tax status, it’s a good idea to consider how you might strategize and reposition your community—time may not be on your side if you wait much longer.

If you want a focused approach, facilitated by experts in the senior living field and honest feedback, contact Quantum Age today.

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Topics: senior living, longevity economy, CCRC, life plan community

The Longevity Economy: Observations & Opportunities

Posted by CC Andrews

Nov 23, 2016 4:18:00 PM

A new report from AARP is taking the long view on the longevity economy with its astute observation about Gen Xers and Millennials. By 2050 these cohorts will join the 50-plus age group. Photo AARP LE-091494-edited.jpgThis of course is not rocket science—you can do the math. The point is that the opportunities driven by these groups, including the products and services they purchase and the additional economic activity this spending generates will extend into the latter part of this century.

In other words, the longevity economy and the opportunities it presents will be around for a very long time.

Today, the 50-plus cohort is comprised of approximately 35 percent of the U.S. population, and it crosses four generations:

  • The GI Generation, born between 1901 and 1926 

  • The Silent Generation, born between 1927 and 1945 

  • Baby Boomers, born between 1946 and 1964, and 

  • Generation X (Gen X), born between 1965 and 1980—the eldest of whom turned 50 years old in 2015 


Titled “The Longevity Economy: How People Over 50 Are Driving Economic and Social Value in the U.S.,” the report notes that the number of adults age 50 and older is projected to grow by 45 percent between 2015 and 2050, while the under-50 population will increase by just 13 percent. As a result, the 50 and older crowd’s share of the total population will reach 40 percent.

“As the size and productivity of this cohort increases over time, so will the economic returns,” the report states. That’s a big deal—a very big deal. Here are some more stats about the 50-plus age group that underscore the enormity of this group’s impact:

  • They hold a whopping 83 percent of U.S. household wealth;
  • They spend more overall than their under-50 counterparts;
  • They account for a majority of the spending
 in several categories of goods and services, including healthcare, nondurable goods, durable goods, utilities, motor vehicles and parts, financial services and household goods;
  • Their direct spending on consumer goods and services, including healthcare, amounted to $5.6 trillion in 2015, while the under-50 population spent $4.9 trillion during the same period.

Notable in the report is that, while white people now make up the majority of those in the longevity cohort, immigration and birth rates by race and ethnicity will change this picture in the coming years. According to the U.S. Census Bureau, by 2050, Black, Hispanic, Asian, and other non-white groups will make up 45 percent of the 50-plus cohort, compared with 26 percent in 2015.

Also interesting is AARP’s analysis of the Internet of Things (IoT), which is defined as “the network of connected, electronic devices able to transmit data in real time—and its transformative potential, offering a new market opportunity, social benefits and cost savings.”

AARP asserts that even within the context of IoT, there is a major market opportunity in the challenge of providing high-quality healthcare at a lower cost. According to the report, venture capitalists invested some $18 billion in start-up healthcare businesses in 2015—a 350 percent increase from 2010. These investments range from coordinating care services and improving clinical workflows to mobile health care, smart homes, “ambient assisted living” and the use of big data analytics.

Whatever the product, solution, or service you offer within the longevity economy, Quantum Age Collaborative is dedicated to helping create innovative and unique solutions that tap into this opportunity to meet consumer demands in new and relevant ways.

If you want a focused approach, facilitated by experts in the senior living field and honest feedback, contact Quantum Age today.

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Topics: Aging, longevity economy

Aging Population, Shrinking Economy?

Posted by CC Andrews

Sep 22, 2016 7:47:47 AM

Hung on the door of Bill Clinton’s Little Rock headquarters and originally meant as some levity for fellow campaign workers, campaign strategist James Carville made the phrase, “The economy, stupid,” a battle cry for the 1992 Clinton presidential campaign that still resonates today.elderly_hands.jpg

Reasons often cited for the current stagnant economy of the United States include debt hangover from the housing bubble, a slowdown of new technologies, and government over-regulation. A recent academic study from the National Bureau of Economic Research provides another explanation for the country’s lagging economic growth: an aging population.

“The fraction of the United States population age 60 and older will increase by 21 percent between 2010 and 2020,” says the study, which was coauthored by economists Nicole Maestas of Harvard Medical School and Kathleen Mullen and David Powell of the Rand Corp., a public policy think tank. “Our results imply that [Gross Domestic Product or GDP] growth will slow to 0.68% this decade and 1.28% next decade.”

A recent Washington Post article explained that from the 1950s to 2007, the U.S. GDP grew to about 3 percent per year. Since 2010, however, annual growth has averaged about 2 percent. Adding the paper’s dismal prediction of 1.2 percent annual growth lost to aging would keep the GDP at roughly 3 percent.

The rise of the U.S. population aging today is the result of a decline in the birth rate in the 1960s, which marked the end of the Baby Boom era, and the long-running decline in mortality rates. While it is becoming widely recognized (as highlighted in a previous blog) that Baby Boomers are a consumer force to be reckoned with, the new study paints a gloomier picture. Using 1980, 1990, and 2000 Census data and 2009-2011 American Community Surveys from the Census bureau to compare U.S. states with fast- and slow-growing populations, this study finds that states with the fastest increases in the elderly had the poorest economic performances.

The paper suggests that only one-third of the economic slowdown can be attributed to slower labor force growth. Curiously, the remaining two-thirds is due to reduced worker productivity—workers young and old have become less efficient. However, no clear reason is given for the latter finding. The paper postulates that the best workers may be leaving the workforce, despite other studies claiming that the most skilled older workers stay in their jobs longer.

Aging populations in other countries have produced similar results. Take, for instance, Japan, which has the highest percentage of people age 60 and older (35 percent), according to the United Nations. The aging of the Japanese population is due to its low fertility rate (about 1.4 children born to each woman) as well as its highest life expectancy (87 for women, 80 for men). In 2014, sales of adult diapers surpassed those of baby diapers. The country's economy is currently at a tailspin, with a GDP of 1.4 percent.

East Asian countries, such as China and South Korea are following suit. A recent World Bank report predicted that shrinking labor forces in these two countries will increase health and pension spending, as well as wreak havoc on their respective annual economies.

Europe’s economy is also not immune. A similar labor shortage caused by an increasing aging population in Austria, Germany, Greece, Italy, Spain, and Sweden will depress the E.U.’s annual growth by 0.4 percentage points from 2000 to 2025, states a study from the Organisation for Economic Cooperation and Development.

The World Economic Forum’s Global Agenda Council on Ageing predicts that over the next four decades, “rapid ageing of populations will be one of the most powerful transformative forces affecting society … This will have a significant impact in areas such as social welfare, public health and economic prosperity.”

As if it hasn’t been said enough—the aging of our population will have a momentous affect on all aspects of society. What’s more, aging guru Ken Dychtwald, PhD, may disagree with these studies’ conclusions, as a previous post in this space indicates.

Whatever the future holds, it’s important to be aware that an aging population will create a longevity economy that has the potential to be a tremendous asset to our society.

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Topics: Aging, longevity economy, baby boomers

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