January/February 2016

January 3, 2016


How Will Technology Transform Retirement?

For the next generation of retirees, the question that will trump all others will be a simple one: How do you add life to longer lives?

As people live longer, and spend more time in retirement, the challenge will be to get more out of those years. How do you find a rewarding second career? How do you stay close with friends and family? How do you maintain independence and mobility? How do you embrace new experiences?  The equally simple answer: technology.

The next-generation retiree will have an unprecedented array of technologies and tech-enabled services to invent a new future for working part time, remaining social, having fun and staying healthy, says MIT AgeLab DirectorJoseph Coughlin.

The next-generation retiree will have an unprecedented array of technologies and tech-enabled services to invent a new future for working part time, remaining social, having fun, living at home, staying healthy and arranging care.

Many of the solutions will be driven by the “Internet of Things” — where household objects can use Internet connections to think, talk and communicate with one another, enabling an entirely new on-demand service industry for older adults. Kitchen appliances will monitor a person’s diet and relay that information to a doctor. Older people will order up services they need to handle chores that have become too difficult, everything from housecleaning to car rides. Even clothing will connect people to a larger network of services that will monitor, manage and motivate them well into older age.

This new world of retirement will come with plenty of challenges—among them, costs and possible loss of privacy. But if the challenges can be met, these innovations could transform retirement into a new and vibrant period of life that is about living better as much as it is about living longer.


NAHB Report Finds Strong Interest in 55+ Communities

According to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI), U.S. builder confidence in the single-family 55+ housing market remains strong in the third quarter of 2015 with a reading of 60, up three points from the previous quarter.

This is the sixth consecutive quarter with a reading above 50, and serves as evidence to why massive master-planned 55+ residential communities like The Villages in Central Florida continue to grow and thrive.

“Builders have a positive outlook on the 55+ housing market,” said Timothy McCarthy, chairman of NAHB’s 55+ Housing Industry Council and managing partner of Traditions of America in Radnor, Pa. “In fact, the markets for single-family, apartments and condos are all doing quite well, and we expect that trend to continue.”

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number above 50 indicates that more builders view conditions as good than poor.

All three components of the 55+ single-family HMI posted increases from the previous quarter: present sales increased three points to 65, expected sales for the next six months rose one point to 67 and traffic of prospective buyers increased three points to 46.

The 55+ multifamily condo HMI rose seven points to 50, which is the highest reading since the inception of the index in 2008. Two of the three components showed increases as well: present sales jumped 10 points to 54 and expected sales for the next six months rose seven points to 56 while traffic of prospective buyers edged down one point to 40.

All four indices tracking production and demand of 55+ multifamily rentals posted gains in the third quarter. Present production rose nine points to 55, expected future production and current demand for existing units jumped 11 points to 60 and 70, respectively, and future demand increased five points to 68.

“Like the overall housing market, we continue to see steady, positive growth in the 55+ market,” said NAHB Chief Economist David Crowe. “With the economy and job growth continuing to improve gradually, many consumers are now able to sell their current homes at a suitable price, enabling them to buy or rent in a 55+ community.”


Study: Rethinking Long-Term Care Financing Necessary to Create More Attractive Options

Although there is no ideal solution, more Americans would have a greater incentive to purchase long-term care plans if those plans were changed and their costs reduced, according to a new study that offers potential consumer choices by examining three new proposed insurance options.

The new study by the Urban Institute’s Melissa Favreault, Howard Gleckman, and Richard W. Johnson, released by Health Affairs at the National Press Club in Washington, DC, last month  offers three models: a program with a front-end benefit beginning after a 90-day waiting period and covering up to two years of need; catastrophic-only (or back-end) program beginning after a waiting period of two years but providing a lifetime benefit afterward; and a comprehensive program beginning after a 90-day waiting period and providing a lifetime benefit.

Each option outlined in the report “Financing Long-Term Services and Supports: Options Reflect Trade-Offs for Older Americans and Federal Spending” was presented as voluntary insurance – subsidized and unsubsidized – and as a universal mandatory program. When considering the major aims of reducing Medicaid costs or increasing insurance coverage, the researchers found that mandatory options were the most beneficial.

Under current policies, individuals fund approximately half of their paid care out-of-pocket. “Partly as a result of high costs and uncertainty, relatively few people purchase private long-term care insurance or save sufficiently to fully finance long term services and support. Many will eventually turn to Medicaid for help,” according to a study summary.

Urban Institute projections show that the average American turning 65 today will incur about $138,100 in future lifetime expenses for severe long-term needs. The institute also says that the number of older Americans with severe LTSS needs will increase 140 percent between 2015 and 2055, reaching 15.1 million. Over that same period, the report notes, there will be an 80 percent increase in the U.S. population ages 65 and older and a 190 percent increase in the population ages 85 and older.

Examining and providing recommendations addressing the nation’s long-term care financing crisis is a key imperative of Argentum and its members. Argentum is the new name for the Assisted Living Federation of America.  It will be addressed through educational sessions and by speakers at the upcoming Senior Living 2025 roadmap for senior living and Argentum’s Annual Conference and Expo, May 9-12 in Denver at the Colorado Convention Center.


Older Adult Population Growth Surges in Certain States

The pressure that the aging of America places on the nation is not evenly distributed among all states, according to a new report on healthiest states from the United Health Foundation and the American Public Health Association.

By 2030, it’s projected that more than 20 percent of the population will be age 65 and older, up from 13 percent in 2010 and just under 10 percent in 1970.

The report examines the healthiest states overall and those with a good environment for seniors. It also ranks states that are projected to have the greatest growth in populations of older adults. While Hawaii ranks number one in the America’s Health Rankings report for overall healthiest state, Vermont took the top spot when measuring the healthiest state for seniors. In the senior category, Vermont was followed by New Hampshire, Minnesota, Hawaii, and Utah.

Vermont’s top spot was largely due to a 10 percent decrease in chronic drinking and a 13 percent rise in hospice care. Louisiana ranked last of all states. Its strengths have been a high prevalence of flu vaccination and ready availability of home health care providers. However, its high prevalence of smoking, obesity, and physical inactivity are challenges. The other bottom states are Mississippi, Kentucky, Arizona and Oklahoma.

In a look at projected 15-year population increases in adults age 65 and older by state based on 2015 and 2030 projections, Arizona will see a 101 percent increase over the next 15 years. Coming in second with an 89 percent increase is Nevada, followed by Florida with 88 percent, Alaska with 70 percent, Texas with 67 percent, and Idaho with a 64 percent increase.

Nationally, across the states (the report does not include Washington, DC), hip fractures are down 15 percent from last year. However, physical inactivity is up 15 percent.

“This seniors surge threatens to swamp the health care system at state and national levels,” reads the report. “Adults aged 65 and older are the largest consumers of health care because aging carries with it the need for more frequent care. The projected growth of the senior population in the United States will pose challenges to policymakers, Medicare, Medicaid, and Social Security not to mention the effect it will have on families, businesses and health care providers.”


Higher Occupancy to Drive CCRC Expansions in 2016

It appears that continuing care retirement communities (CCRCs) are in for another strong year.  Coming off a rebound in 2015, nonprofit CCRCs are expected to continue robust financial performances and high occupancy levels, a 2016 outlook from statistical rating organization Fitch Ratings revealed.

Fitch analysts noted that while CCRCs took a beating during the economic downturn, the operating environment has been revived over the last few years. A more stable residential real estate market, high occupancy levels and more favorable payment systems have contributed to a stronger environment, even with interest rate tightening from the Federal Reserve and potentially mounting wage pressures.

Changing health care payment models and shifting dynamics from the Affordable Care Act (ACA) have benefitted CCRCs, the outlook revealed, though not all the new initiatives have had an impact.

“While CCRCs have little direct exposure to the changes under the Affordable Care Act, the emphasis on reducing hospital admissions and delivering high-quality post-acute/rehabilitation care has benefited many CCRCs, positioning them as desirable partners,” the 2016 outlook reads.

A focus on reducing hospital readmissions from the Centers for Medicare & Medicaid Services (CMS) has led to stronger partnerships with area hospitals for many CCRCs looking to become a preferred provider of post-acute services. The strategies include increasing their post-acute exposure to capitalize on higher reimbursements in this space.

Gary Sokolow, a director at Fitch Ratings and one of the authors of the outlook, told Senior Housing News (SHN) that CCRCs with a bigger post-acute presence are positioning themselves with strong quality measures to partner with hospitals.

“The better ones have electronic records and can track their patients,” Sokolow told SHN. “They can show their outcomes and quality indicators. Given hospitals are looking to become as efficient as they can be, I think they are really anxious to find good post-acute partners. However, a recent report from the Office of the Inspector General (OIG) that recommended greater scrutiny by CMS over reimbursements for rehab services has cast a shadow of doubt over the future of this service line.

“It’s been a good service line for the industry, this short-term post-acute rehab,” Sokolow said. “Medicare, like a lot of other service lines, is beginning to look at whether they are getting the most for the dollars they are spending in this area largely driven by the highest levels of rehabilitation therapy that allow for higher reimbursements.

The OIG’s report recommended a reevaluation for how these services are billed.  If acted upon, a change in reimbursement by Medicare could impact the profit margins for CCRCs, analysts noted. As a result, some CCRCs are anticipating some “headwinds” along this service line, said Sokolow, which marks a notable shift from just a few years ago.

Another challenge some CCRCs are anticipating are rising labor costs as the economy continues to improve.  “If wages begin to rise and the job market get more competitive, that could be a minor stressor on some budgets, “Some CCRCs are building increases into their budgets for those already in certain markets, which wasn’t the case a few years ago.”


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