investing in healthy aging

McKinsey Makes the Economic Case for Investing in Healthy Aging

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I like to highlight and promote new and innovative ideas around aging, senior living and care in this space. But I would not be surprised if some readers react by asking themselves, “Those ideas sound wonderful, but are they really practical?”

For those who have had that thought, I would point to a Sept. 2025 report from the McKinsey Health Institute that makes the economic case for investing in healthy aging in the U.S.

The report shows that initiatives that improve healthy aging often produce real social and economic benefits.

Many in our field — myself included — talk about the qualitative benefits of initiatives aimed at helping older Americans. But it’s good to see McKinsey take a quantitative approach to the issue.

McKinsey examined 18 interventions in eight categories (or “avenues,” as they call them), and estimated their potential return on investment. On average, for every $1 invested, the interventions produced a $3 return in economic and healthcare benefits.

In the chart shared below, McKinsey placed the interventions on a graph that rates their impact (x axis) and feasibility (y axis). The larger the circle, the greater the ROI.

mckinsey healthy aging interventions

Several interventions jumped out at me, led by the big blue circle in the upper-right corner: orchestrating volunteer-matching programs.

McKinsey gives that intervention an ROI multiple of 24.3 — significant benefit for minimal investment, in other words. On scales of 1 to 4, it rates above 3 in both impact and feasibility.

I’m not surprised this intervention would score well. It’s about engagement — pairing older adults with young people. And it’s about the power of volunteerism.

Those sorts of activities create connections and help older adults feel as though they’re making a difference. There’s no doubt that both are important factors in healthy aging.

Other interventions that stood out to me included:

▶️Subsidizing defensive driving courses (14.4 ROI multiple)

▶️Investing in at-home medication technology (7.6)

▶️Expanding scam awareness training programs (4.8)

▶️Enabling employment re-entry (4.3)

All of the interventions listed above scored a 3.0 or more on ROI, 2.25 or more on impact, and 2.0 or more on feasibility.

I couldn’t agree more with the assertion made in the report: We have reached the point where we need to make “a once-in-a-generation choice: adapt and reimagine systems to support longevity for all or risk stagnation with outdated structures.”

Or, as I often ask, will the longevity our society has gained in the last century be a triumph or a tragedy for older adults in the 21st century? Research like McKinsey’s can help chart the course toward a triumph.

new stage of life

Why Aren’t We Investing In Our New Stage of Life?

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Have you noticed:

• When funding for programs for young people is debated, we talk about “investing in our children.”

• When the defense budget is under consideration, we talk about “investing in national security.”

• But when subsidies for long-term care and other benefits for older adults are part of a government spending debate, the word “investment” seems to vanish.

This is a key reason that it’s difficult to secure additional, much-needed funding to support older adults. The public doesn’t see that increased longevity has created a new stage of life, nor that investing in that stage offers benefits to all of us.

Instead, as I wrote in a previous post, older adults are viewed as “net takers” in society. Few people see the possibilities created as large numbers of older adults enter a new, uncharted stage of life.

Some key points about this stage of life (which has been described so well by Laura Carstensen and the Stanford Center on Longevity):

• On average, Americans are living significantly longer now. The premise that most of us will retire in our 60s and die five or 10 years later is no longer operable.

• That means many older Americans have additional decades of potentially useful life. Some want (or need) to use those years to continue to work, some want to volunteer, some want to be mentors.

• The older Americans who still want a job comprise the largest untapped workforce available to us right now. Adding them to (or keeping them in) the labor pool provides experience and wisdom, which makes a difference. Studies show that multigenerational workforces perform better than chronologically homogenous teams.

• As Ken Dychtwald has written, we have the chance to convert the older Americans interested in volunteering into an army working on the most pressing social problems we have.

• Our vision of life after 50 is flawed, as Jonathan Rauch wrote recently in The Atlantic. Reaching this new stage of life “brings gains, too: greater equanimity, more emotional resilience, and what Carstensen and others have called the positivity effect, a heightened appreciation of life’s blessings.”

If we don’t recognize these gains, we won’t grasp the full extent of benefits that older adults can bring to society.

(Rauch’s piece also correctly credits thinkers like Andrew J. Scott, Phyllis Moen, Chip Conley, Marc Freedman and Ashton Applewhite for their important work on this subject.)

• It’s important to remember that not every American can count on this new stage of life. We are not seeing uniform increases in longevity across socioeconomic, racial or ethnic lines.

Add it all up, and it’s clear that an investment in older Americans could produce immense dividends. Our economy, our social fabric and our sense of community would benefit.

But the investment in the new stage of life will only happen if the public starts seeing it through that lens — as an investment.

golden girls

Why the ‘Cultural Narrative of Old Age’ Needs to Change

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Our “cultural narrative of advanced age” has changed in recent decades, and that change may explain why we as a society don’t take better care of older Americans — that’s the thought-provoking case made in a recent New Yorker book review.

I was intrigued by the piece, which was written by Daniel Immerwahr and reviewed Duke historian James Chappel’s “Golden Years.” But I think the call for increased government spending devoted to the care and support of older Americans, while needed and well-intentioned, is both naive and doomed to fail.

I agree that long-term care and other benefits for older adults need more public funding. But what both Immerwahr and Chappel miss is that we’re never going to earn public support for these subsidies if older adults are seen as “net takers.”

Sadly, that’s a widely-held perception now. Older adults are seen as a drain on scarce societal resources while contributing little after age 65 or 75. Programs that could benefit us are framed as “handouts,” competing for dollars alongside programs for the needy and children — not to mention the military.

The New Yorker review frames the “narrative” of aging in the U.S. as having two parts. The first could be called the “Golden Girls” stage, named after the popular sitcom of the 1980s and 90s. We want our older citizens to live like the Golden Girls: acting youthful and finding fulfillment as they age in place, while not needing any form of government assistance.

The second half of the narrative, meanwhile, is “where the more disabling, restrictive stage of old age begins,” as Susan Jacoby is quoted as saying in the piece. This is where the “taker” perception kicks in, as the perception of older adults goes from “Golden Girls” to infirm and helpless burdens on the rest of us.

Obviously, aging is not so black and white. But if society continues to look at it this way, adequate support for older Americans will remain elusive, especially in periods where budget-cutting is prioritized.

What’s the answer? I think it starts with defining a new stage of life and all that it offers everyone in society. That is the topic of another post I wrote recently.

Housing For Middle-Income Seniors

Middle-Income Seniors – The Forgotten Middle

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When it comes to senior housing, wealthy seniors can pay their own way and low-income seniors often qualify for Medicaid. The real problem is for those in the middle. They aren’t wealthy enough for private pay, yet they are too well-off for Medicaid. To make matters worse, the number of people stuck in the middle will nearly double over the next decade. Senior housing operators and policymakers have the opportunity to serve this new market, but how and to what extent?

Nexus founder and Fellow Bob Kramer discusses “The Forgotten Middle” with Nexus Fellow Caroline Pearson, senior vice president health care strategy, NORC at the University of Chicago in an episode of Foresight TV hosted by Steve Moran of Senior Living Foresight.

long-term care infrastructure op-ed in The Hill

America’s long-term care infrastructure: A road to nowhere – Op-ed in the Hill co-authored by Nexus Insights

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In a recent op-ed in The Hill, Nexus Insights Fellows Anne Tumlinson, David Grabowski and Robert Kramer, raise an important point that has been missing from recent discussions around transforming long-term care following the pandemic. The Biden Administration has proposed a $400B investment in home- and community-based services (HCBS). We assert this investment is necessary but not sufficient. Without additional spending on services to help families navigate and manage long-term care services, this HCBS investment is basically a “road to nowhere.” We argue for the need to create a network of long-term care service hubs across the country to help families navigate services.

As you know, there have been A LOT of thought pieces around improving long-term care going forward, but we have not seen this point made elsewhere. Thus, we believe it would be an ideal time to make this point as policymakers consider the Biden proposal.

Excerpt:

Long-term care is complex. Few Americans plan ahead and most wait until a crisis pushes them into a frantic search for solutions. It doesn’t have to be this way.

Every day older adults lose their ability to care for themselves. Often, they are discharged from the hospital too weak or confused to be left alone or care for themselves. Now what? Who will take care of them? Is home- or facility-based care the best option? How much will it cost and who will pay? Does Medicare cover it? Does Medicaid? If home care is the answer, how do you find a qualified and affordable caregiver? Where do you even start? Life-changing decisions must be made, and fast.

Read the full op-ed in The Hill.

Anne Tumlinson is CEO of ATI Advisory and the Founder of Daughterhood. David Grabowski is Professor in the Department of Health Care Policy, Harvard Medical School. Robert Kramer is the founder of Nexus Insights, and the co-founder and Strategic Advisor & former CEO of the National Investment Center for Seniors Housing & Care (NIC).

Bob Kramer and Anne Tumlinson discuss HCBS

Foresight TV: Bob Kramer & Anne Tumlinson – What Does HCBS Mean For LTC?

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With the federal government considering an investment in the country’s infrastructure, a new light has been shed on the importance of infrastructure. And from the resulting discussion, a broader understanding of what is vital infrastructure is emerging. That infrastructure necessarily includes a system of long-term care for the nation’s aging population and a trained workforce to deliver that care.

“We have an outdated, crumbling infrastructure in nursing homes. We have non-existent infrastructure in home and community-based services (HCBS). And we have millions of older adults living longer, many of whom will need services and supports,” said Bob Kramer, Founder and Fellow for Nexus Insights, and Co-Founder and Strategic Advisor for the National Investment Center for Seniors Housing & Care (NIC).

Kramer recently interviewed long-term care expert Anne Tumlinson about the importance of long-term care and changes needed in how it’s delivered and how it’s paid for. Tumlinson, the Founder and CEO of ATI Advisory, and Founder of daughterhood.org, offered recommendations for the policy changes needed to make long-term care financially viable for more seniors and their families. Her recommendations also addressed the critical need for a living wage for the shrinking pool of caregivers who work in long-term care, and the important role of HCBS in helping seniors thrive.

“We don’t have a system; instead, every single family has to create their own system, over and over again. What is out there that could help me? How do I find it, set it up, coordinate it? There is currently no system or function in our society to handle that,“ said Tumlinson.

The interview was hosted by Senior Living Foresight. View the entire discussion.

meaningful reform in nursing homes

Seize the moment: Bob Kramer lays out path for meaningful reform in nursing homes in new Health Affairs blog

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“The American long-term care system, particularly in skilled nursing facilities, has been exposed as deeply flawed, chronically underfunded, and in need of reform.” This bold statement is from Bob Kramer, Founder and Fellow of Nexus Insights, and Co-Founder and Strategic Advisor for NIC. It’s the opening line of his recent blog in Health Affairs.

Kramer delves deeply into the urgent problems facing nursing homes that have been spotlighted on the national stage by the pandemic and its tragic death toll among nursing home residents and staff. Kramer predicts the likely responses we can expect to see from nursing home operators, federal and state regulators and policy makers, and seniors and their families. But he urges, instead, a more thoughtful, complex and multi-faceted approach to solving the challenges of long-term care in nursing homes that involves dispensing with out-of-date assumptions, acknowledging the problems, and aligning the different stakeholders involved.

The problems he sees stem from undervaluing and undercompensating the work of caregivers, and the too-narrow focus of regulatory metrics on physical care needs, rather than the personal goals and aspirations of the residents themselves, and their quality of life. Other challenging problems include the long-term shortage of caregivers for a rapidly growing population of seniors, the lack of financial transparency, inadequate reimbursement models that incentivize the wrong behaviors, the age of nursing home infrastructure, and the financial impact of the COVID-19-related lawsuits that are certain to hit the beleaguered industry as the pandemic winds down.

“Every stakeholder must understand that this is a disruptive moment.” – Bob Kramer

The solutions Kramer proposes will require thoughtful cooperation and coordination among all the players in the industry, including industry providers, organized labor, consumer advocates, investors, and regulators. And it won’t be easy. But as Kramer points out, “Every stakeholder must understand that this is a disruptive moment. SNFs and long-term care are, for a moment, center stage. Those of us who care about this sector, and the millions of Americans it serves, must seize this moment.”

Link to full blog

 

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