Conventional Senior Living Needs Rethinking
CEO at Caspar.AI; MIT TR35; Co-founder Katapult; Sloan Fellow; Microsoft Fellow; Stanford CS PhD; SF Business Times 40 under 40.
There’s currently an alarming intersection of two demographic trends that real estate investors and developers should take note of as they will directly impact senior housing developments:
Trend No. 1: People are living longer in the United States. According to the U.S. Census Bureau, between 1960 and 2015, the average life expectancy increased from 67.7 years to 79.4 years. By 2040, life expectancy in the U.S. is likely to be 85 years or higher.
Trend No. 2: According to estimates by the AARP, the number of caregivers to senior ratio is also changing dramatically. In 2010, there were seven potential caregivers for every senior in need of care or support. By 2030, the ratio is expected to be 4:1, and by 2050 it is expected to be less than 3:1.
The combination of these two trends is disconcerting. If a decreasing number of younger people are available to support an increasing number of older people, something’s got to give. But even before we reach this future, we’re in need of more solutions here and now as senior communities have struggled over the last year under the weight of the pandemic.
Last spring, owners and operators of retirement communities in the U.S. came up short when their residents were suddenly isolated in their residences. Without the necessary resources and care providers, senior living facilities tragically suffered the brunt of Covid-19. Whether it’s to address future shortages or current pain points, conventional senior living needs rethinking.
Develop More Communities For Senior Living
The first step in dealing with these trends is by increasing the development and construction of new retirement community products. The biggest increases in this area should be residential communities of various types such as assisted living communities, memory support communities and other iterations that combine multiple levels of living. While Continuing Care Retirement Communities and Life Plan Communities are not on the rise, there is some movement to incrementally increase capacity and improve the basic service package.
Equip Senior Living Communities With AI Technology
The second step will be to create innovative technologies that will extend the ability of the caregiver workforce to support increasing demand. In many forms, technology will need to plug the service gap for the owners and sponsors of retirement communities, for the managers and staff at those communities and for the residents and their families who rely on service and care provided.
Current shortages in staffing and management efficiency become the opportunity for many applications of technology in the retirement community of the near future. Some of these technological advances have already been realized with AI-enabled apartments, which are equipped with voice-command technology and automated notifications, including remote detection of falls, so family, staff and management can stay on top of residents’ health and safety, even from a distance.
These technologies can help attract and retain prospective residents, operate these communities efficiently and thus provide a return on investment crucial for bottom-line health.
Offer Community Residents Telehealth Options
The third step senior living communities should take is to implement a robust healthcare system with telehealth playing a key role. In the pandemic, the use of a wide variety of telehealth programs was rapidly adopted across the country, increasing the likelihood that residents are already familiar with the technology. Many communities are already integrating telehealth into their service offerings, providing much-needed care within the comforts of the home while keeping the costs down for various stakeholders.
The Future Is Here
The impending intersection of market size versus adequate staffing makes it imperative that communities continue to expand and artificial intelligence applications and telehealth options are introduced sooner rather than later. We have seen a rapid increase in the adoption of technology by Americans over the age of 65, and as prospects seek retirement communities, they’ll look for those that offer the latest technology, giving them comfort and peace of mind. Developers, owners and managers of communities need to be ready to answer the demand.
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