Posts Tagged ‘Seniors’

Lumina Group Newsletter Imminent!

Tuesday, October 25th, 2011

It’s been a long time coming (also one reason why there’s been a little bit of a drop off in my posting) but we will be in a position very shortly to launch our newsletter, called, perhaps a little unimaginatively, Industry Insights.

We have actually produced the first issue, focused on affordability in service-enriched housing environments. My colleague Carol Omstead and I have endless debates about this issue, focused on just how important affordability is in the grand scheme of things. That may sound ridiculous at first blush but remember that the private pay service-enriched sector appeals to a very small proportion of its target market—somewhere between 5% and 10% in most market areas. A very large proportion of the other 90% can afford what we are offering so to what extent will a more affordable product widen our target market? I think that is a very good question.

The first issue also lists 24 very exciting topics we will be addressing in future issues, ranging from operating expense ratios (how are YOU doing relative to industry norms?), to acquisition versus new construction analysis, to turnaround strategies for underperforming projects. And everything in between!

The details of how to get on the distribution list for the newsletter will be available within a week or two.

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Numbers: Canada vs. US Nursing Homes

Tuesday, August 16th, 2011

A recent study published by Brown University (July 2011 edition of Health Affairs) shows that between 1999 and 2008 the nursing home population in the US shrank by just over 6% while at the same time the population over the age of 70 increased by just over 8%. The shift is attributed largely to the growth of alternatives such as assisted living.

Here’s another interesting thing to note—in Canada, there were 250,000 nursing home residents in 2008/2009. In the US in the same year there were 1.2 million. Using the standard 10 to 1 ratio suggests that there are twice as many people in Canada in nursing homes as there are in the US on a per capita basis. That is undoubtedly due in large part to the lack of Canadian alternatives, assisted living in particular. Assisted living in the US is almost entirely a private pay phenomenon and when it comes to care, no matter how light, Canadians do not like to pay for it. As a result, the private pay assisted living market in Canada is a very thin one.

On the surface, the impact of twice as many nursing home residents and very few assisted living residents would seem to result in much higher public expenditures in Canada for the elderly compared to the US, particularly in light of recent dramatic cuts to US Medicare and Medicaid budgets (11% reductions). And maybe that is as it should be, although it seems inevitable that Canadian public expenditures on the elderly are going to be spread much more thinly in the future than they are now.

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CKNW Interview

Monday, June 27th, 2011

For all you non-Vancouverites following our blog, CKNW is the # 1 rated talk radio show in the region. I just did an interview with Jill Bennett, one of the hosts on the station. Before the interview started I was thinking about interesting ways to talk about the numbers—how our population is aging and what that really means. For example, the Vancouver metropolitan area is expected to grow by 1 million people between now and 2035. That’s a pretty interesting number in itself (where are they all going to live you might reasonably ask) but what is more interesting is that fully 40% of those 1 million people will be over the age of 65.

What does that really mean though? The fact is that there are lots of communities that already have much higher proportions of their population over the age of 65 than Vancouver will have in 2035 (22%). For example, Parksville-Qualicum at 33%, or Penticton at 24%. If you visit Penticton you do not get the sense that it is overrun with seniors. Parksville-Qualicum is a little different, partly because it is quite a lot smaller than Penticton. I know people who decided to retire in Nanaimo rather than Parksville-Qualicum because they got frustrated in grocery stores by slower-moving shoppers. Just imagine though what life would be like in Sun City Arizona, where 80% of the population is over the age of 65.

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Aging in Britain

Monday, June 6th, 2011

A recent article in the Economist (An age-old problem, May 28th, 2011) discusses the findings of a report from the Law Commission, an agency in Britain that helps Parliament “tidy up legislation”, in the inimitable words of the Economist. The report is focused on long term care and how to pay for it. At present, poor people have their care paid for by the state; wealthier people have to pay for it themselves, either by running down their savings or selling their home or both. This is a much different situation from Canada, where almost all long term care is paid for by the state. (Rich people pay a little more than poor people for subsidized care, but not much more. How long this can last is another question entirely.)

The Law Commission considered the fairness of the situation in Britain—should people who have worked hard all their lives, saved their money and bought property be faced with financial ruin if they require long term care? The Economist expects that further work by the Commission will recommend an insurance scheme of some sort, probably underwritten by the state, to help deal with these problems. Almost no one in Britain buys long term care insurance but as loyal readers of this blog will know, almost no one in any other country does either.

Another solution for aging Britons, suggested by the Joseph Rowntree Foundation, involves a home equity scheme. People would sell a stake in their houses, which would be reclaimed after death. The money so raised would be used to pay for home modifications designed to facilitate aging in place—showers instead of bathtubs and so on. A pilot project in North London has experienced only modest take-up so far but that is partly because a similar scheme in the 1980s did not work well and people remember.

Something is going to have to work, in Canada as well as in Britain. State-funded long term care is most definitely a time-limited solution to emerging needs.

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Baby Boomers (one more time)

Thursday, April 28th, 2011

Emmylou Harris has just released a new record which, by all accounts, is excellent. Reading the reviews I learned that Emmylou, who is 64, lives with her mother, who is 89, just outside Nashville. That got me thinking, yet again, about the future housing behaviour of the boomers. Coincidentally we have been cleaning out files and found a 2005 article from Australia written by Val O’Toole called Baby Boomers Housing Demands. The article references psychologist Erik Erikson, who theorized that when people are enmeshed in one stage of life it is very hard to foresee the next. That is certainly true of the boomers—it is probably true of everyone. When you are, say, 60 and fit, how can you possibly foresee what you might want when you are 85 and frail? People are always saying the boomers will be different when they are 85 but I am not so sure. It’s one reason I am looking forward to actually being 85—finding out how the story ends.

The Australian article speculates about all the possibilities and concludes that typical older boomers, like Emmylou Harris and her mum will choose to remain in the family home no matter how inappropriate it may be. That certainly mirrors the situation in North America as well.

But that is partly a matter of options, or lack of options. Today there isn’t much choice for mobile seniors beyond active adult type housing and service-enriched type housing. There are a few cohousing communities around, but very few other examples of more communal type living arrangements. That is one area I think is going to be a much more prominent part of the landscape in future years.

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Social Media in the Seniors Housing Industry in Canada

Wednesday, April 20th, 2011

We here at Lumina Services are slowly moving into the 21st century. We have a blog on our website, we have podcasts on our website, we have a page on Facebook, and we have a twitter account, although we have yet to tweet anything. Part of the problem of course is that there is no one to tweet TO! We recently went through the websites of half the members of the BC Senior Living Association and found two tweeters (people who tweet?)and one Facebook page. I thought that was pretty amazing, although it also made me feel a lot better about being such a latecomer to the world of social media.

So stay tuned!

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Food and grab bars

Friday, April 8th, 2011

I realize that I have posted about these two issues on numerous occasions but they are both something of bêtes noires for me.

I have been travelling a lot and have eaten at several seniors’ projects. In one of them (which will remain nameless) the food was execrable. It isn’t often you get to use “execrable” in a sentence and I would have been glad of the opportunity if it weren’t for the fact that because I couldn’t eat the food I was extremely hungry.

I mentioned this to my good friend and colleague Rita Thibault at Westbridge Group Valuation Partner and she said: “Aren’t people trained to cook decent food for large numbers of people?” Good question. One of the residents at a sister project of the aforementioned community, where the food was much better but apparently still not up to snuff, commented that if the chef really were trained at some school the school ought to be shut down.

It consistently amazes and astonishes me that operators serve such lousy food. Even in projects that are fully funded and also full of people who can’t afford to move anywhere else, you would think simple human decency would lead these operators to serve decent food.

Then yesterday I ate a community that prides itself on its food and rightly so. My lunch was delicious. Food costs here are $7.50 per person per day, which is on the high side, but not only are the residents happy, the community generates a lot of revenue by catering outside events.

Enough said about food, at least for today, and on to grab bars. I have been in two seniors communities recently that have no grab bars in the bathroom because these communities are intended for “independent seniors”. That’s just dumb. Even hotels are better than that, or at least some hotels. I am currently staying in a brand new mid-range hotel and there is not a grab bar in site although the bathtub is very high. How many people do you think actually have baths in hotels? Very few I imagine. Why don’t they install showers instead? Even if there is some logic to the bathtubs, why no grab bars? Grab bars make tubs safer for everybody, to say nothing of the one in four British Columbians who are going to be over 65 in no time flat.

So there you have it – my rants for today.

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Housing Markets

Tuesday, March 29th, 2011

Here in Canada and especially in BC we have been subject to numerous warnings that our housing markets are overheated and about to collapse, much as they have in the US. All of us in the seniors’ housing industry are very aware of the impact of falling house prices on occupancy levels. So it was interesting to read an article in a recent Economist about international houses prices and the extent to which they are over or under-valued based on the long run average relationship of house prices to rents. The most over-valued market in the world is Australia’s, where current house prices are 56.4% above that long-run average relationship. Hong Kong is a close second at 53.7% followed by France (48%), Spain (43.7%), Sweden (39.5%) and then Britain, New Zealand and the Netherlands in the 20s. Canada is well down the list at only 11.4%. The US, after years of recession, is only 3% above its long-run average and poor Japan (pre-earthquake) is 35% below. Owning has been getting cheaper in Japan relative to renting for more than 20 years.

The same issue of the Economist contains a fascinating graph developed by Robert Shiller, of the famous Case-Shiller index that tracks house prices in the US. The graph charts real house prices (ie adjusted for the impact of inflation) in the US over the period from 1890 to 2010. For most of those 120 years, real house prices stayed relatively constant, with the exception of the depression and war years, when they fell well below 100. But the graph charts an astonishing rise in real house prices starting in the late 1990s. Over the next few years real houses prices doubled before falling precipitously in the recession. As the Economist puts it: “The run-up in values was not just unprecedented, it was obviously lunatic.” It’s funny how the human race seems completely unable to avoid market hysteria, whether it’s tulips or houses.

Find the article here:

http://www.economist.com/node/18250431?story_id=18250431

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An Asian Retirement Community

Thursday, March 17th, 2011

Readers of this blog are by now familiar with one of my many obsessions, that being the impact of multi-generational cultures on the demand for supportive seniors housing. The hypothesis is that in cultures where families look after their elders at home until they are so frail they need residential care, the intermediate step of supportive housing (IL, congregate care, service-enriched) is skipped. Here in very multi-cultural British Columbia, there is lots of evidence indicating that this hypothesis is a sound one. For example, in spite of a very large Chinese population (which typically cares for elders at home) there is only one small private pay supportive housing project targeted at the Chinese community.

But a recent issue of the Journal of Active Aging focuses on a retirement community targeted directly at the Asian community in Fremont, California that has been around for a decade. Fremont is a community of just over 200,000 people that is part of the much larger San Francisco Bay area (over 7 million people). The 64 unit project is owned and operated by Aegis Living and is called Aegis Gardens. The article is very positive, highlighting the linguistic skills of the staff (all, at a minimum, speak Cantonese or Mandarin or both), the design of the project (incorporating feng shui principles), and the activities (tai chi, mah-jong, origami). Food is not addressed in the article.

Outcomes have been extremely successful—80% of residents participate in physical activity programs, falls are a fraction of what they are at most communities, average age is older than at most other communities, staff turnover is extremely low.

The president of Aegis is quoted in the article as saying the company needed to negotiate a very steep learning curve on the way to success.

Part of that learning curve is described in an article in the San Jose Mercury News in 2004. That is a very long time ago but it is interesting to note that way back then, residents were upset. Here are some excerpts from the article:

But in the last few months, residents say, beloved Chinese staff members have resigned or been released, and replaced by employees who speak only English. The new staff members have implemented several culturally puzzling changes: buying wine for “happy hour,” moving a pingpong table into the tai chi space, and banning residents from cooking zong zi, a special rice dumpling prepared for the Chinese Dragon Boat Festival.

Residents have also complained that the center only spent $5.25 per resident a day on food. Though management has since raised the food budget to $5.75 a day, the food budget remains an issue. [note: $5.00 per day on food is quite common in 2011]

The Aegis Gardens situation is a “typical business problem” among companies trying to serve ethnic communities, said Felipe Korzenny, Florida State University professor of marketing communities and a local marketing consultant. The Aegis company has no Asian-American managers or corporate executives outside of its Chinese-oriented facility, Lucas said.

Note that was way back in 2004 and clearly, Aegis has addressed those issues. But the fact remains that in a metropolitan area of over 7 million people, where 20% are Asian, there is only one very small retirement community for those 1.5 million people.

Perhaps there are others and if any blog readers know of them please let me know.

Note: in US demographics “Asian-American” typically includes people of East, South East and South Asian descent.

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Live to 150?

Monday, March 14th, 2011

The latest Public Policy and Aging Report published by the American Aging Association includes several fascinating articles on the subject of longevity. Throughout history, many thinkers have postulated the theoretical existence of immortality but as the author of the article points out, they are all dead.

Dramatic increases in life expectancy occurred in the 20th century as a result of ameliorating communicable diseases that affected young people and old people alike. But saving the lives of young people adds many more years to average life expectancy than saving the lives of old people. Saving the life of a young person can add decades to their life; saving the life of an old person adds many fewer years. Now that the public health battle has shifted from communicable diseases to chronic diseases of old age, gains in life expectancy will slow.

Additionally, in the final third of life diseases and disorders rise exponentially, which is a rather depressing thought. If you escape one disease, another will get you. Even more depressingly, reducing the risk of disease has no impact on biological aging. People age in a biological sense no matter what, at least that’s the situation we are faced with in 2011.

Might this change? It could and it should according to one of the articles, but that will mean a shift in focus from increasing life expectancy to increasing “youthful vigor” at all ages—ie slowing the biological processes of aging. So you might not live to 150, but you could live a vigorous life until age 100 and then die falling off your horse.

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