By princesses Annika, Tunuka, Iciar, Loes & Frog Gerasimos

By 2050 nearly 2.1 billion (approx. 20%) of the world’s population will be 60 years or older. And you will be one of them. How are you imagining your retirement years? Most people are looking forward to finally spending time with family and friends, having time for their hobbies, travelling and enjoying local cultural offerings.

Wake up!

In the USA 13.5% of the elderly who live in retirement homes are clinically depressed, and this number is not likely to be any different in other developed countries.

According the UN “Population aging is expected to become one of the most significant social transformations of the twenty-first century, with implications for nearly all sectors of society, including labour and financial markets, the demand for goods and services, such as housing, transportation and social protection, as well as family structures and intergenerational ties.” With an aging population and ongoing medical and scientific efforts to further increase longevity, we need to ensure that our elder years are not spent sitting out the extra time, but that they are a gratifying and meaningful chapter in our lives.

Population aging is especially relevant for the following global development goals:

In this post, we will discuss the social implications associated with a rapidly aging population. We will highlight several root causes and present a business model innovation to address this challenge.

1. Drivers of aging population

It is a common belief that an aging population is the result of longevity and lower mortality rates. Although these two factors play a role, the most important driver are decreasing birth rates, leading to an increase in the median age and drastically alters the age composition of our society.

Fertility rates in developed countries have declined steadily over the past years. Changes in social norms and the labor market have altered perceptions about family structures and composition as well as the costs and benefits of marriage and child rearing. Academic research highlights that many developed countries are in a so-called low-fertility trap[1], resulting from both demographic and sociological factors. Fewer potential mothers result in fewer births, and women who do become mothers are having smaller families due to the expenses associated with additional children and as a consequence of the lower childbearing they witnessed in previous generations.

2. Social implications of aging population

As life expectancy continues to increase and the younger population shrinks, sociologists and economists challenge the sustainability of current family and societal structures, as well as healthcare and pension systems.  Below, we discuss the key social implications of an aging population.

2.1 Changing family structures

Longevity is expected to increase the duration spent in family roles, such as parent, grandparent and non-dependent child. At the same time, falling fertility reduces the duration and/or the likelihood of other roles such as parent of dependent child or sibling. These changes in family structure have an important effect on the care provided for older people, which has been historically provided by their families.

2.2 Social isolation

As family sizes are showing a clear decreasing trend, people over the age of 65 will increasingly face social isolation which can lead in higher depression, morbidity and mortality. Elders who lose their partners or do not have children, will find it difficult to maintain access to their network of friends and acquaintances and stay involved in social activities. A study in the UK has shown “the prevalence of severe loneliness among older people living in care homes is at least double that of community-dwelling populations.[2] ”

2.3 Social care

With an increasing imbalance between the size of the population of working age and those of non-working age, there are significant implications for pensions and other policies, particularly in those cases where the current population of workers pays for the benefits of those who have retired. If governments do not take the required measures to reform their social security and healthcare system, the limitation of a shrinking pool of workers’ contribution to fund retiree’s entitlements will result in a service deterioration forcing many elders into poverty.

2.4 Generational fairness

Historically the contract between the generations was based on reciprocity. Adults provide for their children, and later on, when these dependents become adults they take care if their parents. For thousands of years this reciprocity has been maintained at both a family and societal level. However, with an aging population it becomes more and more challenging to see how the different generations can benefit equally from the proceeds of economic growth, by passing fairly the cost of such success from one cohort to the other.

3. Root causes of social risks

The older an individual gets, the more likely he or she is at risk of becoming clinically depressed, primarily due to developing chronic illnesses or decreasing bodily functions. In the United Sates, “more than two million of the 24 million Americans aged 65 or older suffer from some form of depression.[3]” This often goes undiagnosed or untreated, having severe societal consequences. Spending a significant time alone only magnifies this level of depression.

4. Business model innovation

4.1 Traditional way of elderly care

At the moment, there are numerous ways to support and care for elderly. Depending on their health and social network, elderly may receive services such as assisted living, adult day care, long-term care, nursing homes, hospice care, and home care.

While elderly care services strongly vary between countries, developed countries tend to have similar care offerings. For ease of discussion, we will illustrate the traditional way of elderly care by sharing examples from the Netherlands, a wealthy developed country with representative demographics. Similar to other developed countries, the Netherlands has experienced recent cultural changes which, together with the rise of working moms, have decreased the family support. As a result, most of the elderly population relies on public or private health care services for their day to day support. While the majority of the elderly continue to live independently (in their own home), around 4% require full time care in a nursing house.

There are nearly 400 nursing homes in the Netherlands. The cost per patient is comparatively high as new regulation increased the requirements to become eligible for nursing homes, decreasing the overall utilization of the homes.

 

The nursing homes themselves provide around the clock care and support; residents usually live in a small private room and share a living area with approximately 15 other residents. Three meals are provided to residents per day and staff is available for more challenging tasks, such as showering, administering medication and disease monitoring.

While the basic care in the nursing homes is rated as sufficient, there is significant room for improvement in terms of social care and activities. 40% of the residents feel that nurses are hasty and the staff has insufficient time for a confidential conversation. 75% of the residents cannot go for a stroll for some fresh air without the support of staff.

Staff appears to agree, with 51% of staff stating that there is too much time pressure which prevents them from providing all the required care, in particular simple, but time-consuming tasks, such as social engagement. 61% of all staff finds there is no time offer personalized care for the residents.

 

4.2 The new nursing homes

So how could a new and improved future look? One such suggestion is to offer students looking for cheap accommodation lodging in the spare rooms of the care homes in return for (social) volunteer work. This new match between supply (under-utilized nursing home rooms) and demand (cheap accommodation for students) increases social welfare, battles the increasing loneliness of the elderly and allows them to enjoy their retirement years. By offering cheap housing in return for a fixed amount of volunteering work, nursing homes and students can collectively benefit.

4.2.1 Business model innovation tools

4.2.1.1. Pooling

Whereas the traditional nursing home only fulfilled the demand for accommodation of the elderly, the new model will pool the demand for housing of both elderly people and students. Due to this increase in demand and reduction of demand variability, utilization rates of nursing homes will increase. Although students will not be subject to the usual nursing home tariff rates, they will be providing other services for free that will reduce the nursing homes’ staff needs and thus reducing the nursing homes SG&A costs.

4.2.1.2. Splitting

One of the main advantages of the new nursing home model is the shifting and splitting of risk, students need to commit to their housing allocation before the start of the school/university year (typically during August / September). Even more so, students can be offered discounts, dependent on how early in the year they can commitment. This will enable the nursing homes to reduce their demand variability and fill the spare capacity in the nursing homes with elderly people as usual.

4.2.1.2. Resequencing

This elderly care model will use the resequencing business model innovation tool in two different ways:

– As students spend a certain amount of hours help out the nursing home stuff with their daily tasks that do not require specific training, and potentially even taking over entire sections of the day (such as afternoon entertainment, physical activity, delivering meals, the amount of trained staff required by the nursing homes will be reduced.

– The nursing homes are also able to train the students in regards to specific tasks in order to be able to provide better and safer care for the elderly. This exposure could additionally, spark the student’s interest in pursuing a career in the medical or social sciences, thus resequencing the traditional way of career election.

4.2.2 Benefits for the elderly

Research shows reducing loneliness and social isolation improves wellbeing and significantly extends the life expectancy in older people. The current nursing homes clearly have an unmet demand in social activities, due to lack of resources. By mixing young students in the elderly community, the environment is expected to become much livelier, more stimulating and engaging. Students can take the elderly out for a walk, read together or discuss the news. Not only will they have more company, the nature of their conversations is also expected to change. Where the elderly amongst each other may quickly run out of fresh conversation topics – besides discussing their diseases or who of their friends have recently passed away – students provide a whole new range of topics, such as their studies, social or even their love life. The students can even support the elderly when learning and using new technologies, such as email, social media and Skype. In addition, the time spent together, getting to know each other and spending time together on a daily basis will create strong bonds between the elderly and the students.

4.2.3 Benefits for the students

Having a limited budget, students are known for being extremely price sensitive. Offering cheap accommodation taps directly into this price sensitivity, allowing the students to spend their limited budget on other expenses, like social activities, basic utilities or additional training. In addition, the new generation of students are well-known for their preference of purpose in what they do, rather than financial gains, always searching for ways to be meaningful asset to society. Working with the elderly allows students to improve their social skills, which will be relevant in many future positions. Due to the bond created between the elderly and the students, the students may gain a support system away from home. Someone who is there for them during this first excursion into adult life.

4.2.4 Benefits for the nursing home

The scarce resources of the nursing homes can be re-allocated to where they are most needed, while a lot of the mundane tasks, or those that no training is necessary for, can be taken on by the students. This change has the potential to drastically improve the service provided by the nursing homes and their care givers, as well as reducing costs for the home as a whole. In addition, the nursing homes have the opportunity to train students to take on even more challenging / advanced tasks, such as administering first aid and providing extra support in case of emergency.

4.2.5 Risks / Costs

Of course, a multitude of risks come to mind when considering mixing “sex, drugs & rock ‘n roll” students with the elderly who tend to value peace and quiet. But careful analysis highlights that the risks are not as impactful as initially expected.

Nuisance – Naturally students will enjoy spending their social time going out and returning late at night, potentially intoxicated. Their return to the home may wake up the elderly residents. This can be helped, by allocating rooms to the students, that are as far away from the most sensitive patients and rather place those that are hard of hearing in closer proximity to the students’ rooms. Of course there also need to be clear behavioural guidelines that accommodates for both the students and the elderly to ensure peaceful and enjoyable co-habitation.

Crime – Students might be tempted to take advantage of the lower alertness of the elderly and steal their personal belongings. While this will always remain a risk, we believe this may be sufficiently mitigated with a rigorous selection process.

Negligence – Students may fail to live up to the expectations and refrain from fulfilling their volunteering hours, enjoying the free housing without delivering on their share of the agreement in return. We believe that this risk can also be sufficiently mitigated by a rigorous selection process, as well as a continuous monitoring process. Overall the nursing staff will continue to be responsible for the well-being of the elderly in their care. Furthermore, students should only be allocated those elderly residents that they are capable of taking sufficient care of. More challenging patients, whether for physical or psychological reasons need to remain under the care of the nursing staff.

Resistance of the elderly – So far, one of the major assumptions for this new business model has been that the elderly will welcome the students with open arms and enjoy their company. There is a risk of course that not all the residents will enjoy the appearance of the young, potentially noisy and active residents. To accommodate all, the more sensitive patients (as suggested in the Nuisance section above) can be allocated rooms and social areas, further away from the social life of the students.

Costs – The rooms used to habit the students will only be those that are currently not needed by the elderly. By either paying a small rent contribution, or even habiting for free students take on their share of expenses by taking on duties within the nursing home. As the students will be responsible for providing their own food (or potentially be able to purchase a meal plan from the nursing home kitchen) they will not incur any additional costs that are specific to the elderly.

4.3 Exemplary Implementation

The Netherlands were not only used earlier in this blog as an example of an aging population, but also because they are already currently implementing a similar model in several of their nursing homes.[4] In the Dutch model a nursing home has established a system of rent-free housing in the nursing homes for university students for 30 hours of social work “acting as neighbors” to the elderly residents. While research on the benefits on mental and physical health of both the elderly and the students is still ongoing, it seems there is a trend for increased well-being, as well as increasing chances of students to continue donating their time to social causes after they leave the nursing home and university.

In particular dementia sufferers seem to benefit from shared reading exercises with the students. As many of them learned poetry off by heart when they were young, revisiting such texts provides them with comfort and reassurance by hearing and reciting familiar poems.

The elderly in these situations have also been particularly receptive to engaging with the students and sharing experiences with them. While there are no studies available yet to prove an increase in their well-being, reports from the nursing home say that the interaction with the students have increased and seem to be successfully combatting social isolation within the elderly nursing home population.

5. Conclusion

In today’s rapidly aging world it is not only governments and social services that need to reconsider the care we give to our society’s most vulnerable members. It is something we, as a whole, are responsible for. We believe that by combining the two demands illustrated above, the need for social interaction and care by the elderly, and the need for housing by the students, does more than just ensure our elderly are better taken care of. The students themselves are able to take away a significant learning. One day, not that far off, we may well be in the same situation and we would be grateful for a society that ensures we get to spend our aging years with dignity and respect.

Overall, we believe that the benefits of inviting students into the nursing homes far outweighs the potential risks. By bringing the young and old together, we are simply re-creating what had been the norm for centuries before and one of societies more challenging problems (how to make elderly care manageable and affordable) is taken care of. (2940 words)

 

6. Sources

• http://pure.iiasa.ac.at/8465/1/RP-07-001.pdf
• http://www.futuremedicine.com/doi/full/10.2217/ahe.12.65
• https://www.cdc.gov/aging/mentalhealth/depression.htm
• http://www.un.org/en/development/desa/population/publications/pdf/ageing/WPA2015_Report.pdf
• http://www.mentalhealthamerica.net/conditions/depression-older-adults-more-facts
• SCP, Ouderen in instellingen, ESB zorg 2012 (Dutch)
• https://www.ouderenfonds.nl/onze-organisatie/feiten-en-cijfers/ (Dutch)
• http://theconversation.com/heres-why-some-dutch-university-students-are-living-in-nursing-homes-68253

 

[1] http://pure.iiasa.ac.at/8465/1/RP-07-001.pdf

[2] http://www.futuremedicine.com/doi/full/10.2217/ahe.12.65

[3] National Institute of Mental Health: “Older Adults: Depression and Suicide Fact Sheet.” Accessed August 1999. Netscape: http://www.nimh.nih.gov/publicat/elderlydepsuicide.cfm

[4] http://theconversation.com/heres-why-some-dutch-university-students-are-living-in-nursing-homes-68253