Demographic Dip: An Excuse or an Imposing Reality?
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Transcript of Demographic Dip: An Excuse or an Imposing Reality?
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Demographic Dip: Excuse or Imposing Reality? Irving Stackpole & John Spooner
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How bad is it??
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Retooling for the Next Generation John Spooner | Co-Chief Executive Officer
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Life Span
25 68 Age
Vit
ality
80 92
100%
1965 2015 2050
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Morbidity Compression: Live Long, Die Fast
25 68 Age
Vit
ality
80 92
100%
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Health Span: Extending Wellness in Aging
25 68 Age
Vit
ality
80 92
100%
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U. S. Senior Population: 2010-2050
Total 65+ 75-84 85+
2010 296,000,000 39,561,000 7,104,000 (2.40%) 5,180,000 (1.75%)
2020 325,600,000 52,857,000 9,768,000 (3.00%) 6,512,000 (2.00%)
2030 358,200,000 68,345,000 15,223,500 (4.25%) 9,850,500 (2.75%)
2040 393,900,000 74,984,000 17,725,500 (4.50%) 13,786,500 (3.50%)
2050 438,000,000 81,100,000 17,520,000 (4.00%) 17,520,000 (4.00%)
Pew Research Center: U.S. Population Project
2005-2050
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Beyond the Picket Fence…
A NEW Senior is Emerging
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TOPIC
CCRC
Market
Life Span/ Health Span
Attitude
Health
Employees
RECENT PAST NOW
• Housing • Services • Health Care
“Oh, I Didn’t Think I Would Like It, But I Loved It!”
FUTURE
Institutional Image Hang-Over
Consumer Acceptance Increasing
• Housing • Hospitality • Wellness
Public Health Terminology
Longevity and Morbidity Compression
Entitlement Confusion
Directed Advice
Self-Directed
Job/Career Career
Demographics Double
Health Span: Focus on How Long One Lives Well
Consumer Activist
Engaged Self-Care
Profession
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TOPIC RECENT PAST NOW FUTURE
Hospitality
Who Pays?
Average Age
ILU/RLU
AL
SNF
MS
High Resident Satisfaction was Enough
• Ritz
• Four Seasons
• Disney
Medicare/Insurance Co-Pay/Deductible
• ILU: 78-85 • ALU: 80+ • HC: 80+
Convergence in Age
• Granite • Larger Apartments
• “Amenity Ladder” • Open Plan
AL and ILU Converge • Expand AL • Highly Competitive
HC and AL Converge • Downsize Nursing • Shift to Rehab
• Growing Most Recent Addition to Levels of Living
• Training
• Systemized Expectations
• Cross-Category Comparison
• Fluid Expectations
High Deductible
Longevity Blurs, Morbidity Defines
• Double Masters • Super Fridge • Casual Living
• Specialty AL • Efee AL • Deregulation
• Specialty HC • Rehab Spa
• Growth Market into the Future
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TOPIC RECENT PAST NOW FUTURE
CONTRACT TERMS
Terminology
• “Continuum”
• “Levels of Care”
• CCRC
• Independent
• Assisted • Memory Care • Nursing Care
• CCRC • Residential
• Levels of Living • Levels of Service
Transfers
Changes in Terms Due
to Changing Policy/Mark
ets
LTC Risk Allocatio
n
Contracts
• Defined • Sponsor Discretion • Cooperation Expected
Same
• Specifically Defined
• Sponsor Discretion
• Specific Acknowledgement by Resident/Advisors
• Consequences for Non-Cooperation
• Not Mentioned • Right to Amend
Same
• Specific Mention of Unknown Future Changes in Health Care Delivery May Require Change
• Types A, B, C • Closed Insurance Pool
• Modified
• Defined
• Resident Cost Sharing
• Closed Insurance Pool with High Deductibles
• Dynamic
• Control Cost with Full Recapture
• Cross-Level Benefit Use
• High Refund • Traditional
3-5 Alternates to Broaden Market
• Consumer Financial Profile
• Shift to “Asset Status”
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….…So,
TOPIC RECENT PAST NOW FUTURE
• NFP Status • “Green” • Marijuana Use • Assisted Suicide • Digital Privacy
• Social Accountability • Silver Tsunami
• ACO’s
• Property Tax Exemption
• Succession Planning
What’s Hot?
(The Cleaver’s) 48% of WWII Generation
(Modern Family) 37% of Baby Boomers Generation
(Kardashians) 25% of Millennium Generation
Traditional Family
Composition (U.S. Census
2013 Affluent Senior
Households)
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The New Language of Senior Living
1. “Care” is being excised
2. Evolving senior living language
− Health span
− Age compression
− Flex spending
− Long-term support and services
− Levels of Living
− Levels of Service
− Support days
− Connected-care technology
− Service Excellence
− Apartment-for-life
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Demographic Dip: Gravity is Unavoidable Irving Stackpole
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How bad is it??
• Numbers
• Negativity
• Money
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Realities
Occupancies are poor because • The age qualified markets are declining
• Increased options / choices
• Negative perception
• The economy
• The role of “Intermediaries”
The need for change is URGENT
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Currently
~83%
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Currently ~ 87%
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Stackpole & Associates, Inc. 22
2016
Born 1930
85 yoa
2020
Born 1934
85 yoa
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Negativity?
Sector NOT thought of as the valuable
resource it is …
They are seen as prisons – awful places
– The “F” word
– “Don’t want to put / place mom in a nursing
home.”
– “I’d rather be dead.”
Deep metaphor of negativity
Stackpole & Associates, Inc. 23
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Responding to a declining market
Defend, protect & fortify
• Manage to Loyalty
Increase Productivity / Efficiency
Innovate
Differentiate
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Stackpole &
Associates, Inc.
25
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Stackpole & Associates, Inc. 26
Efficiency
Technical, Productive, Allocative
– Technical Maximum improvement from resources
– Productive Best health outcome for given costs or
reduction in cost for the same outcome
– Allocative Best outcomes for society
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Facts of Life
The age qualified market is shrinking
Intense cultural negativity
Continued pressure on payments
Continued pressure on utilization
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Where is the demand?
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Demand for Arthroplasty
209 253
384
572 450 663
1520
3481
40.8 47.8
67.6 96.7 38.3 55.3 121
268
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2005 2010 2015 2020 2025 2030 2035
Nu
mb
er o
f p
ati
ents
(x 1
,00
0)
Year
Primary total hip
arthroplasty
Primary total knee
arthroplasty
Revision total hip
arthroplasty
Revision total knee
arthroplasty
29
We are Here
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Demand for ARD Care
-
200
400
600
800
1,000
1,200
1,400
1,600
2010 2015 2020 2025 2030
Medicare/Medicaid Costs per year (billions of dollars)
Inflection Point
We are Here
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QUESTIONS???