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Yugo Budget & Mercedes Taste - The Boomers Senior Housing Conundrum

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By Steve Moran

I have written a number of articles about the escalating gap between what aging boomers want and expect vs. what they can afford. In truth, it is a problem that goes way beyond senior housing. It is a problem that threatens to implode the federal budget in the coming years.

Because it’s an issue I am passionate about, I am always on the lookout for people who are thinking about and working on this problem. I am looking for people who have ideas as to how we can find a way to create a senior housing community on a Yugo* budget and where seniors can live a Mercedes lifestyle. A few weeks ago, someone in the industry (sorry I forgot who, or I would give credit) told me to go Google some guy named Jeff Petty and SHIFT -- "Senior Health and Housing Initiative for Transformation" -- because he has some workable, simple, viable ideas on how to crack this this problem. I found him and last week we had a fascinating conversation.

The Challenges

Jeff is the CEO of Wesley Enhanced Living, a not-for-profit faith based, CCRC operator in Pennsylvania. They provide senior living services to more than 1,200 residents in 9 communities. He has a burning passion for solving the cost problem. Here is how he sees the problem:

  • The current CCRC model only serves seniors above the 70th or 80th percentile of income and assets.
  • Particularly because of declining investment returns, seniors -- even those who are able to afford the current CCRC model -- face the very real problem of spending down their assets.
  • Running out of money before running out of life is the most persistent fear seniors have.
  • For virtually all seniors, getting appropriate health and wellness services is a bit like having to buy a new car, one part at at time, then having to take all those parts home and assemble them yourself or with the assistance of an expensive consultant.
  • The current senior housing/senior healthcare model is frightfully complex, expensive and costs are growing much faster than the economy.
  • As the system exists today, there are no serious incentives to reduce costs. You might even be able to make a case that the incentives that do exist, result in increased costs.
  • The focus of the current system is almost entirely on repairing old frail broken bodies rather than preventing problems.
  • There are huge gaps in the payment system.

SHIFT Goals

The broad goals of the SHIFT concept include the following:

  • It is better to prevent disease and life sapping conditions rather than putting all our resources into treatment after the problems have become a surfaced.
  • It is impossible to realistically address senior healthcare issues unless the solutions are linked with senior housing.
  • Any approach needs to comprehensive/holistic.
  • It is possible to create a model that feels like a Mercedes and costs even less than a Yugo.
  • Solutions will require traditional provider sources and payor sources to think outside the box. These players will need to be willing to sacrifice their traditional turfs to achieve a better quality of life for seniors.
  • The solution needs to be targeted squarely at the middle class.

SHIFT does not yet exist in real life. There is a huge resistance because it is different. You can check out Part 2 of this article, which outlines the specifics of what SHIFT would look like in real life and how it would be paid for.

Questions for you, the Reader:

I want to close out this article with a couple of questions:

  1. How does Jeff’s description of the problem fit with your view?
  2. What do you think of the goals?  Are there things missing?  Are there things you think should not be in that list?

* In case you don’t remember the Yugo is often referred to as the “Worst car ever made”. Jokes abound such as: Why does the Yugo have a rear-window defroster? So you can keep your hands warm while you push it. You can read more here.

Some Past Articles on this subject:


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