Believe it or not, we are quickly approaching the third decade of the 21st century. This is the decade when we are supposed to see explosive demand for seniors housing, with the first baby boomers hitting 80 years old by mid-decade. Perhaps we should say 80 years young. This is the wave of demand we have all been waiting for, and some counting on, for the past 20 years. This is what is supposed to produce an unmet need for an additional 200,000 seniors housing units if new development “only” continues at its current pace. Perhaps we should begin re-thinking the thesis.
If you think back just 20 years ago, assisted living was the disruptor in the seniors housing and care field. It had no new technology, very few bells and whistles, and several different models within the model. What it had was attractive residential settings that filled a void between skilled nursing (and intermediate care nursing) and independent living retirement communities, and that void was large and growing. The only question we have is, what took you so long? Perhaps it was simply the natural evolution of the sector. This was the proverbial no-brainer, but it took a change in mind set. That change needs to come again. While it would be harsh to quote Jon Snow that “Winter is coming,” we may be on the doorstep of a new era.
So, what is going to be the disruptor as we head into the 2020s and beyond?
While it has been common to say that the boomers will be the disruptors, it is not that simple. They are just the end users, and it will be all the other changes in the next 10 years that will have a profound impact on the market, and shape the decision-making process of this huge bubble.
Take technology. Some of the earliest technologies were for the senior living providers themselves, partly because it was an easier market to target with multiple end users at one site. In many cases, the technologies were meant to help the providers keep the residents safe, as opposed to helping the residents stay independent. While good, they were never really mind-blowing, and certainly not transformative. We have to applaud Aging2.0 for their efforts to help fund and publicize new technologies for the senior care industry, but so far, many of them have been underwhelming. Interesting, yes. Helpful, yes. Transformative? No. At least, not yet. One of the problems is that technology is changing so quickly that what’s hot today could be outdated in just a few years.
We were an early crowd-funder of Jibo, the first table-top companion robot that would have emotional qualities. This would be perfect for that elderly person living alone, whether in their original home or their new home in a senior living community. The original idea of the brilliant Cynthia Breazeal, Jibo was supposed to make its debut in late 2015. That was pushed back once, twice and a third time, as it ran into design issues and, we suspect, necessary updates as competitive devices (not just for use in the senior market) surpassed Jibo in technology updates. New technology is just not new for very long, which is why we have to start thinking about technologies not designed for the elderly, but for an even larger market, and adapt them. Think Uber, Lyft, driverless cars, PurFoods. Who?
PurFoods is a portfolio company of Cressey & Company, and it delivers prepared food to the home, wherever that may be. It operates under the name “Mom’s Meals,” but it is very low-tech, at least for now. It delivers prepared food for the week, usually frozen. But here is the rub. Not only does it deliver meals (think Meals on Wheels but better), but it can tailor those meals to the nutritional needs of each recipient (think someone with diabetes). Medicaid is already funding these deliveries under various state waiver programs in order to keep the recipients (mostly elderly) out of institutional care settings because they believe it will save Medicaid money over the long term.
Proper nutrition is one of the reasons touted for the elderly moving into seniors housing. Well, think if the changing health status of someone living alone can be plugged into a program to change that person’s diet, delivered and fully prepared. This is not rocket science, but some of the best innovations often are not, and they often are not created with just the elderly in mind.
The point is that many technologies, and services, are being created to keep the elderly at home.
We all have to keep in mind that when asked, the majority (if not the vast majority) of elderly and boomers say they want to remain in their homes for as long as possible. While initiatives such as ASHA’s “Where You Live Matters” help, they are currently overwhelmed by the push for home- and community-based supports and services.
We are obviously not doom and gloom over the future of seniors housing, but we strongly believe that as an industry we need to take our beer goggles off when it comes to the boomer generation that is expected to fill all those empty units. We all know the current problem: overdevelopment, occupancy declines, labor costs and staff poaching. These are not going away any time soon. But when we see stories that claim that even with the current pace of development there will be a 200,000-unit shortage by the late 2020s, all we can say is, don’t bet the ranch on it. In the following months we will present our thesis, and before you get your knickers in a knot, take those goggles off and think like a technology-savvy baby boomer who may or may not be thinking about where he or she is going to live at age 85….or 95. Better yet, ask a friend or two who are not in seniors housing. Stay tuned.
