All the hype about the baby boomer “silver wave” coming to senior living is focused on demographics and not consumer preference. Yes, we’ll have more older adults who will need senior supportive housing, but we’ll also have precious few who want it.
Successful organizations are built on meeting consumer preferences (wants), not simply on meeting their needs. The number of dominant brands that disappeared, or disappeared in the minds of consumers, when they failed to meet consumer preferences is long: Kmart, Blackberry, Sears, Circuit City, America Online, Yahoo.
What’s going to happen to senior living when your best consumer segment — those high-income, high-net-worth boomers — don’t need you anymore? This question is especially important because we know they already don’t want what you offer.
You’ve seen the studies: everyone, and I mean everyone, wants to grow older in their home — to age-in-place. Those desires couldn’t be met very cost-effectively in the past, but that’s changing, and quickly. It’s where all the money is flowing — toward delivering healthcare and aging services in the home.
Investments into aging-in-place services and technologies now are into the billions and across the board: to help with everyday assistance, sensory issues, mobility, monitoring, transportation, activities of daily living, cognitive care, social engagement, and so on.
Billion-dollar companies are spending billions themselves to buy access to older adults in their homes: CVS buys Signify for $8 billion, Humana invests close to $6 billion for Kindred Care, Walgreens buys CareCentrix. Hospitals are investing heavily into the “hospital at home” model. And recently, electronics giant Best Buy announces it is partnering with hospital systems to be the tech support for in-home equipment.
Follow the money. It’s going from senior living and care facilities to the home, where people want to stay. Senior living operators need to realize that this shift changes, well, everything. Services and tools once only accessible inside your community will exist in the home. Plus, your best prospect will be able to afford it. New entrants with huge pocketbooks will take your business right out from under your nose.
So what do you do? Many operators are investing in home-based services, understandably. But you have fixed assets (communities) that could end up empty in 10 years. The implication is obvious, once you see it. This overwhelming consumer preference to age-in-place, which the wealthiest will be able to do, will lead to a fundamental shift in senior living toward options for those of middle income.
Wait, what? Middle income?
Yes, middle income. That’s because that segment, which NORC has identified as some 11.5 million strong, will need senior supportive services and won’t be able to afford to have them delivered in their home. They will need to live where older adults are aggregated so that care services can be cost-effectively delivered. They will need to live together in community.
I believe the middle-income older adult will only be able to meet their age-related needs in senior living. Not with the product and price points that exists today, but something different, and less expensive. Something where older adults live in community as citizens, serving one another rather than simply being served.
My money is on senior living operators who are trying to seize this coming opportunity, which has the potential to be a market three or four times larger than the entire universe of supportive housing for older adults today.
Don’t hesitate. Get going. Remember, Steve Jobs once advised: “If you don’t cannibalize yourself, someone else will.”
Your best prospect is on the menu.
Matt Thornhill is founder and CEO of a middle-market solution called Cozy Home Community.
The opinions expressed in each McKnight’s Senior Living marketplace column are those of the author and are not necessarily those of McKnight’s Senior Living.
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