COVID-19 has been a tremendous challenge for everyone, but it has shone an especially bright spotlight on how underserved our aging population really is. We sat down with Nexus Fellow and Senior Managing Partner at Longevity Venture Advisers, Jody Holtzman, to discuss trends, challenges and opportunities in the longevity and aging industry in this new world.
Jody is a well known leader in the aging and longevity world, having spent the past 15+ years in the field, preceded by a career in strategy consulting. His work in aging includes a 12 year stint at AARP where he ran research and was senior vice president of thought leadership and market innovation.
NEXUS INSIGHTS – You have spoken about Baby Boomers and their lack of interest in traditional long-term care communities, especially assisted living. Tell us more about that.
JH – First, it is hard to generalize when you are talking about a population of just over 70 million people, which is the current Boomer population in the US. That’s more people than in the UK, France, or Italy. So, let’s just establish that one size does not fit all and there will always be a segment of Boomers for whom traditional long-term care settings are attractive. However, even before the pandemic, occupancy rates across independent and assisted living already were at a low, while the age of new residents continued to climb well into the 80s. And the mental image and mental model of long-term care communities for Boomers was one of nursing homes where people are warehoused to die. Since the pandemic this image has only been deepened as Boomers saw nursing home death rates, as well as experienced such with their own older loved ones.
There also is something else going on when we look at how Boomers view long-term care. And that is, they simply do not see themselves in those settings. It does not jive with their own self-image. This came out in spades to me the first time I spoke to a LeadingAge conference and did this exercise with the audience. I asked everyone to stand if they proudly participate in the management of any type of long-term care community. Three hundred and fifty people jumped up. Smiles all around! Then, I asked them to remain standing “if you are looking forward to the day you live in your own facility.” And the overwhelming majority of the audience sat down. These were people on the front lines of senior living, committed to making life better for older people. But they also, overwhelmingly, were Baby Boomers. And they did not see themselves in senior living. So, something has to change.
There is something else going on when we look at how Boomers view long-term care. And that is, they simply do not see themselves in those settings. – Jody Holtzman
NEXUS INSIGHTS – You talk about how the pandemic has shaped how and where health and healthcare happen. Tell us about the trends that you are seeing.
JH – Trends over the past year, both within and outside senior living, have increasingly confirmed that the home is and will continue to be the focus of health, care, and connected living. The growing consensus across the healthcare community got a boost from the orientation embedded in the concept of social determinants of health (SDOH) which is encapsulated in the view that health is a function of one’s zip code and the conditions of life in a geographic area. Health is now, officially, “beyond medicine.”
In parallel with the new focus on SDOH over the past year, digital health has exploded. While the health benefits of home-based care were being proven, along comes COVID and people are told to lock down and remain in their homes. Telehealth, telemedicine, and other virtual communications, became the dominant market response in healthcare and society more broadly. All in combination reinforcing the centrality of the Home and further boosting demand for more home and community-based products and services.
NEXUS INSIGHTS – You work with a lot of healthcare companies in the aging space. How are they dealing with these new trends and market opportunities?
JH – In response to the pandemic, and to both longstanding needs and those recognized by looking at health through the lens of SDOH, CMS has added a growing list of non-traditional, supplemental benefits that may be reimbursed through Medicare Advantage, but not traditional Medicare. Startups and others have responded with an array of new offerings covered by new reimbursement codes. And MA plans have been increasingly adding them to services already offered in their plans. While payers have had the near-term benefit of attracting new customers through product/service-based competitive differentiation during Open Season, the longer-term health benefits and attendant cost savings have yet to be proven. And this brings us to a dilemma. While the need and availability of a growing list of technology-enabled products and services has been established, customer/patient adoption is still low, and returns on investment have been as well.
For startups, this is concerning because, in many cases, they are being directed by investors and others to build their channel strategies around Medicare Advantage. Even if the deals with payers are all gain-share arrangements without requiring cash outlays by the payers, they still are making an investment in time and dedicated resources, if only to track progress. The question needs to be asked and monitored – how long will MA plans include offerings that garner limited customer uptake? If nothing else, the current terrain calls for a diversified go-to-market strategy that is not solely dependent on Medicare Advantage.