Real life has got in the way of blogging

Those of you who follow this blog will have noticed the regularity of my posting has taken a dive. This has nothing to do with a failing interest in the subject or a lack of news but rather the limitation of there only being 24 hours in a day.

I have been really busy (which is good) but also cast into sorting out the life of an older relative (which is bad).

My posting about “Ageing in Place” have taken on a new meaning as I have been trying to make it a reality.

The only good thing that comes out of this situation is I now have a real understanding of incredible ineptitude that masquerades as the UK’s health and social support services. There have been many good deeds by kind individuals but the bottom line is that the way the NHS and Social Services manages the sick older person is not fit for purpose.

I will need to wait for the personal annoyance to subside before I start to unpick this situation in logical fashion. The big positive is that there are immense opportunities for private business to provide the services that the UK’s state is unable to provide.

I hope to be blogging more frequently. Lots to talk about. Dick Stroud

The cost of long term care something we would prefer to forget

You cannot blame Jo and Jolene public for putting their head in the sand and ignoring how the hell they will pay for their long term care. The Government has been doing it for the past few decades so why should its citizens be any different?

This item is from an online Independent Financial Adviser publication and spells the problems and the opportunities to the Finance Industry.

The marketing issues that have to be overcome are considerable. Most people reckon they have paid enough tax over their lifetime and hence the state should pay for their care. Most people don’t want to plan, 5 years into the future, let alone 50 years. Forgoing life’s pleasures today, for a better standard of care home, is not something to excite your average consumer.

Other than these factors it is a pretty straightforward marketing challenge. Dick Stroud

Where goeth the UK Residential Care Market

I have a particular interest in the dynamics of the UK residential and nursing care business. It is a business that is part consumer services, part property investment, part B2B and is about to be hit by the UK’s waking nightmare of plunging Government spending.

Mix into this concoction the fact that many care companies are wallowing under a mountain of private equity debt and even more are ill-equipped to tackle the required restructuring of their business models and processes and you have one hell of a mess. But, for the astute and entrepreneurial one hell of an opportunity.

Recently I "What’s going on in with UK residential care” that questioned if the Royal Bank of Scotland supposed £250 million of capital for the Care Industry was for new ventures or to support the numerous ill advised investments it had made in the past. Sorry, I keep writing Royal Bank of Scotland rather than its new name the UK Government (the UK taxpayers are about to own 83% of the bank).

I also wrote “Life’s going to be interesting in the UK care market” that talked about housing 21’s takeover of a domiciliary care company and what this means for the industry.

I have just finished reading two articles in the Health Investor (sorry subscription only). One of these quotes a lot from a report by Colliers that paints a rosy view of the industry, even though the profit margins are in decline.

What interested me was the correlation between GDP per capita and weekly fee for those in residential homes. As you can see the same strength of relationship does not exist with nursing homes. If my future business success was based on the healthiness of the UK's GDP per capita I would be seriously worried. This is exactly the emotion of the other article, as can be seen from this quote.

Professionals are nervous, individuals are nervous and the patients are nervous,” says Robbie Burns, chief executive of Clinovia, a home healthcare firm owned by Bupa. “There is an almost surreal nature to the situation – how banking systems can implode overnight is beyond comprehension to most people.” And the industry has every right to feel nervous. The latest government intervention to part-nationalise the UK’s leading banks is estimated to push public sector debt to above 50% of the annual national income.

Somehow I don’t think this is the last I will be writing about this subject. Dick Stroud

What’s going on in the UK residential care market?

I have written a lot about the perilous state of some of the biggest companies in the UK residential care business. Too much investment in property at too high a price creating too much debt with too little thought about the long term consequences.

Ooops nearly forgot. Too much faith in the simplistic notion that an increasing number of older people means that care home fees are on a one way journey in the upward direction.

The magazine Health Investor (subscription) has an article suggesting that Royal Bank of Scotland has: “earmarked some £250 million of capital for various development projects in the residential and social care sector.”

The argument goes that there could be a bonanza for companies, with cash, being able to buy land at greatly reduced costs and probably also get building work done at knock down prices.

I am not so sure. There are two elephants in the room. First, domiciliary care is definitely the flavour of the day. Older people want to stay in their home longer and Government loves it because it is cheap. Second elephant, is a massive pressure on funding for elder care that is about to hit as public expenditure is slashed.

The Health Investor article tempers its views with some pessimistic opinions from people in the Care Industry who say that it is impossible to raise funds for new developments.

I have another explanation why RBS might be freeing up a few millions for further investment in the Care Sector. This bank was the largest investor in the sector during the boom times and has consequently taken the biggest hit as asset prices tumble. The bank has funded a lot of development projects that are just about coming on stream and will start to eat more cash.

I suspect the new money is going to find its way in keeping the bank’s existing investments alive rather than funding new ventures. Anybody from RBS like to comment? Dick Stroud

Life’s going to be interesting in the UK care market

Housing 21 is a not-for-profit social housing landlord that has acquired the quoted homecare provider Claimar Care. You might wonder why this is interesting.

Reason one – you don’t often/ever get a non-profit organisation acquiring, via a takeover, a listed company. Reason two – it illustrates the potential of the care market for radical consolidation.

Domiciliary care is getting the same “one way bet” feel about it as residential care had prior to the credit crunch. Then companies were acquiring property assets funded by a perceived guaranteed income streams (i.e. property prices keep going up and there will always be old people).

Now companies see the combined desire of older people and government to “age in place” as the signal that this sector will become a sure fire winner. Individuals because they want their familiar surroundings, the government because it is the cheap option).

It remains to be seen whether or not Housing 21’s entry into the market will pave the way for other housing associations to become involved in the domiciliary sector. Already some of the not-for- profits do provide these types of services.

Most domiciliary care providers are very small, often local, family run companies. The guy that runs one of the larges companies reckons there are 3,000 care providers.

Now here is the big contradiction - or shall we say “challenge”. On one had local government and the local health trusts would sooner deal with a couple of large companies. However, the trend is for individuals to be given the ability to select where they acquire their care. This will undoubtedly be accelerated by the incoming Tory Government.

The marketing challenge is that you have companies that are used to being B2Bs (i.e. selling contracts to government or quasi government institutions) having to acquire a new set of skills and become B2Cs selling directly to consumers. It is even a bit more complex than that because there is/will be a protracted period when they will have to be both.

Such a situtation would try the resources of any marketing savvy organisation. Most care providers aren’t that marketing savvy or certainly don’t have a consumer conscious culture.
Interesting times ahead. Dick Stroud

A rare glimse into China

You don’t often get an insight into what is happening in China vis a vis the older market so it is particularly interesting to read about an organisation called Pinetree that says its mission is to be:

China's trusted brand for senior healthy living - whether it is their children seeking to provide their parents with quality home care solutions that help their parents enjoy independent living, or mature citizens themselves that are seeking trusted products and services (home care, wellness, insurance, travel), Pinetree aims to be their first destination.

A big focus of the company’s offering is its digital literacy services that: “helps seniors to access and enjoy the internet through tailored, quality and fun training courses that is integrated with Pinetree's online platform and training portal.” This all sounds very similar to the UK’s Digital Unite.

Pinetree certainly has a big and fast growing market. As China rises through the league table and towards the top, as the fastest ageing country, I bet there will be a few more Pintrees being established. Dick Stroud

Business opportunities in the Care Industry

A UK care charity, providing care homes for the elderly, is the first British charity to attempt the takeover over a listed company.

Housing 21 (the charity) is preparing a share offer to buy Claimar Care, the heavily indebted care services provider. Like a lot of care companies, Claimar was suckered during the crazy period, prior to the credit crunch, when it appeared that credit lines were infinite. It now finds itself wallowing in over £21 million of debt. There are a lot of Claimars around.

So here we have a boring old charity taking over a listed company.

The Care Industry is ripe for more of these acquisitions as the pressure on public spending screws the amounts of funding local authorities can pay for elder care.

Look at this story that shows how local authorities are itching to cut expenditure on care services. This is going to put severe pressure on the business models of the care companies. Dick Stroud

Care Industry conundrums

Four Seasons Healthcare has been teetering on the brink of oblivion since the beginning of the recession.

Yesterday it announced that it was writing of half its £1.5 bn of debt, in exchange The Royal Bank of Scotland (RBS), and funds it manages, becomes the largest single shareholder, with about a 40% stake. To all intents purposes it controls the company, although it forcibly denies this is the case.

We now have a weird situation.

The RBS controls Four Seasons (plus a pile of other care homes) – the Government controls RBS. In parallel to these shenanigans the dire state of public spending is putting the screws on the Care Industry to reduce the cost of care and hence profit margins.

You don’t have to be a Wittgenstein to work out that this means the Government is in fact financially screwing itself.

As a marketer I have not idea what you can do with this information but it gives you cause to think.

If the Care Industry is of interest to you then you should read this article by the guy who runs BUPA Care Homes. Dick Stroud

The UK Care market in crisis

Four Seasons is one of the UK’s largest providers of care for older people (15,000 people in 400 locations).

The company is also a high profile examples of what goes wrong when valuations plunge and the high levels of debt can not be refunded.

At the last minute it looks as if it has staved off going into administration but only at the cost of wiping out many of the creditors. There are a lot of companies in Four Season’s position.

The vulture funds are out there waiting to pounce and pick-up cheap assets. I don’t reckon they will have that much longer to wait.

I wonder if the Government authorities realise that a large part of the UK Care Industry is in such a precarious financial position and that this will undoubtedly be having a negative impact on the quality of care provided. Perhaps they don’t care? Dick Stroud

Homecare franchise

I have been amazed how long it has taken UK franchise companies to target the homecare sector. Brightstar, a US company, appears to have got the idea with 130 locations currently open the company has plans for an additional 500 locations in the next five years.

Maybe there are such operations running in the UK? Dick Stroud

Don't keep telling me about the problem give me a solution

Aviva is the UK’s largest insurance company and has taken to doing bits of research showing the dire financial straights of the UK’s over-50s as they reach retirement not having enough savings for their own wellbeing or that of their parents.

The most recent press release is: ‘Baby gloomers’ unprepared for parents’ retirement care.” The one before was: “A growing sandwich generation survives not thrives.”

I am sure the research is right on both accounts; however, it raises an interesting marketing question: “ Why keep telling people that they are, or will be poor, when they can’t do anything about it.” Maybe worse than that, why keep telling them about their lack of savings when they perceive the reason for their plight as being the fault, probably incorrectly, of the incompetence of finance companies like Aviva.

Aviva, don’t get me wrong, I totally understand why you are undertaking this PR research and I am sure the messages you are telling are true and sensible, but isn’t it counterproductive?

Now here is an idea for you. You rightly identify that there is a lack of knowledge about the costs and procedures of providing care. Why not divert your PR research budget into creating the definitive web site to help the sandwich generation navigate the unfathomable route between the NHS, social services and the charities who make up the elder care jigsaw. Dick Stroud.

Sustenance and hope for caregivers of elderly parents

When people talk to me about 50-plus marketing they invariably have one of two things in mind.

Most often they are thinking of age-silo products like stairlifts, walk-in baths, hearing aids, retirement properties etc. Alternatively they are thinking about age neutral marketing (i.e. selling more multi-age products to the older demographic).

There is a third group of activities that few people want to talk about and this involves providing care for the elderly and services to carers. In the past the responsibility for providing care was assumed by the state and the relatives of the old person. This is changing as the traditional family structure disappears.

Let’s face it, looking after an incontinent and confused 80 year-old is not the sexiest of subjects. The final phase of life issues are things none of want to face. We prefer to ignore them until reality intervenes and creates a crisis.

I was recently sent a book to review called Sustenance and hope for caregivers of elderly parents by Author Gloria G. Barsamian. This is not a book about marketing but about the realities of being old and being a carer.

I have only just started reading it but it seems to provide a remarkably balanced and positive description of the subject. If you need a business reason to read such a book then consider the opportunities created by the rising 80+ population.

Another good and personal reason to read it is that a lot of us will be both a carer and the one being cared. Dick Stroud

Housing and the 50-plus

A couple of interesting takes on what is happening in the housing market for the 50-plus.

It appears that the "active adult communities" in the US – I guess we would call them retirement villages in the UK - have not powered ahead in the way that had been predicted.

Conventional wisdom had home builders anticipating a wave of early-retiring boomers jumping from their family homes to active adult communities, leaving lawn mowing behind as they spent their pre-golden years golfing and taking cooking classes.

So far, the wave has yet to build. Sales of homes in active adult communities are growing, but not by leaps and bounds. According to the National Association of Home Builders, the percentage of 55-plus home buyers (in the US) who opt for active adult living has grown from 2.2% in 2001 to 3% today. That means 97 percent of them currently are not moving to adult communities.

This article provides a very sound set of arguments why the growth in the market has not occurred, some are to do with the recession, some are not.

At the much older end of the 50-plus age spectrum, when people require care services, all is not well. The US has exactly the same problem as the UK with paid care being expensive and individuals and government lacking the funds to provide.

This post in AgeingPlaceTech spells out the reality.

All is not well in the world of housing and the 50-plus, but a place with zillions of business opportunities. Dick Stroud

Combining two problems doesn’t create a solution

The Royal Bank of Scotland acquired The Priory, the rehabilitation chain well known for treating troubled celebrities, when it took over ABN Amro. The company now has debts topping £800m and its equity is worthless.

The same bank is also lead lender to Four Seasons, the older people care home giant. Not only is it exposed to the debt, it owns about £100m of “piks” (payments in kind), which has no value.

So what do you do in such circumstances? How about combining the two and ending up with an even larger problem. Surely, nobody would be suggesting you do that would they? Yep, that is just what is happening. Dick Stroud

It’s not all doom and gloom - luxury with Sunrise Living

Following on from the previous post about the McKinsey research, I read this item about the venture between Sunrise Senior Living and Conrad Properties. They partnership is opening a new luxury independent senior living property.

They have transformed a year old luxury boutique hotel and apartments into a Sunrise Senior Living Residence, with 208 designer apartments and top amenities.

Sunrise expects to attract residents who want a top-flight building that's in many ways like a luxury hotel, but who also want special support services.

You need deep pockets. Rents begin at $2,800 a month for a studio and go up to $9,200 for the six three-bedroom, two-bathroom units. That includes housekeeping, laundry, utilities and "an incredible array of programs and services" - whatever that means.

I think this development and the previous posting illustrate the need for companies to take a highly targeted approach to the market. Dick Stroud

Caring for older people - seeing beyond the emotion

The phone rings – you answer – life changes. The mother of a friend, aged 84, went to visit her son. The family stood to go and eat dinner, the mother tripped, broke hip. At that instant life for brother and sister changed. Who would look after the father (mild dementia), who would look after the mother when she leaves hospital, can the parents live alone, who to contact, what about the parent’s house and pets……..

Who is going to do all of these things, who has the time?

This incident happens every day to people in their 50s and 60s as their parent’s reach the fragile part of their life.

In the UK, state provided services to assist in these circumstances are very much “hit and miss” and will be under funding pressure for as long as anybody can see.

Taking all of the emotion out of this situation you can’t help but see the business opportunities. I suspect I am not alone in this. Dick Stroud

The curse of private equity and the UK care home industry

Cheap money, a guaranteed demand, ever rising property prices and lots of cheap overseas labour to do the work –what more could any business want?

It is not surprising that shed loads of private equity poured into the care market since it seemed a one-way bet. The result is that some care suppliers have been more intent on financial engineering than their core business of providing care.

The marvellous old saying: “trends go on until they stop” has resulted in some of the UK’s largest care suppliers teetering on the brink of financial disaster.

The article in the Sunday Telegraph details the plight of Four Seasons Healthcare and other highly geared UK care companies. The moral of the story is that once management’s attention is more intent on balance sheet manipulation than running the fundamentals of the business the result can be disastrous. The dreadful thing about this saga is that the poor souls involved in the fall-out from the mess are some of the weakest and most fragile members of society. Dick Stroud

Medicine and care - how the Web can help

I received a couple of really interesting responses to my last blog posting about the way the Web can assist in the areas of medicine.

The University of California has teamed up with scientists at The University of California, San Francisco to launch an Internet video channel dedicated to improving understanding of incurable neurodegenerative brain diseases. See the above video.

The channel is intended to increase awareness among patients, their families -- and physicians about the various forms of dementia. The goal is to promote earlier diagnoses and to get more patients into research studies and clinical trials. The site is also intended to educate caregivers, and provide support through caregiver testimonials.

The UCSF team is also reaching out with two other forms of online communication. They've created a widget, containing links to the YouTube channel and the UCSF Memory and Aging Center web site that will help the viral promotion of the facility.They have also created a Facebook group, "Defeat Dementia."

The second contact was from OnTimeRX, a company that is all about reminding people about their medication. Look at the comment on the previous blog posting. How interesting that Microsoft includes OnTimeRx software in their generation-specific “Senior PC” Vista systems for Assistive Technology.

Isn’t it great we live in the Web era.

My guess is that this is just the start. The amount of VC funding that will flow into resolving issues created by the ageing population has yet to start. Dick Stroud

The future shape of health and care management

My Outlook inbox contained two totally disconnected e-mails containing links that illustrate how care and health management in the future might (will) be managed.

I don’t know what it is like outside the UK but the health and care services provided by the Government, and much of the private sector, use a level of IT that Noah would toss out of the Ark and demand something more modern.

Every shrill article in the media about the ageing population is accompanied by dire predictions of how the health and care services will implode and that people (mainly 50-plus) must take more responsibility for their own health and care. They may be right.

One thing that could make a big difference is the application of the latest concepts of the Web.
Arjan in't Veld told me about a US outfit called Lotsa Helping Hands that is a free online volunteer caregiving coordination tool. Basically it applies social networking functionality to a specific issue of coordinating care for an individual. What a brilliant idea.

So far there are 8,000 Lotsa Helping Hands communities. The company has partnered with organisations like the Alzheimer’s Association, American Lung Association, Lance Armstrong Foundation and the National Multiple Sclerosis Society providing co-branded services they offer to their members.

The other development is the concept of owning your own medical data and using Google or Microsoft tools for its management. This appeared in an article in Technology Review.
Google and Microsoft want to do the same thing for personal health that software such as Quicken has already done for people's personal finances. Google Health (released in May) and Microsoft HealthVault (launched last October) allow consumers to store and manage their personal medical data online. Users will be able to gather information from doctors, hospitals, and testing laboratories and share it with new medical providers, making it easier to coordinate care for complicated conditions and spot potential drug interactions or other problems. Both Google and Microsoft will also offer links to third-party services like medication reminders and programs that track users' blood-­pressure and glucose readings over time.

Are you getting the picture? It looks to me like we will have the providers of care and health services using clapped out IT whilst consumers will be expecting/demanding/needing to use Web 2.0 and Cloud technologies. Dick Stroud

The Eden Alternative

For the last couple of days I have been attending a conference of the managers of the UK’s largest not for profit provider of care and property for older people (more of that term in a moment). The keynote speaker at the conference was Bill Thomas, the founder of the Eden Alternative. Bill was named (by the WSJ) as one of the 12 people who are changing retirement in the US. You can see him perform in the above video.

Bill gave a great presentation, one that was aimed at both the head and the stomach. If you don’t know about the Eden Alternative (nothing to do with the Eden Project) then you should. Here is the web site and Bill’s blog.

The intro to his speech involved an interview style session with the head of the company’s Care Services. One of the topics discussed was the differences in language between the US and the UK. Whilst I have seen the term ‘elders’ used I haven’t thought about the positive connotations that it has compared with “older people”. A small thing you might think but fundamental to the way society positions ‘elders’ on the positive, rather than negative side of the balance sheet, where it pigeonholes “old people”.

I am sure I will write some more about Bill Thomas – a very interesting guy – even though he has the strangest taste in footwear! Dick Stroud

Getting grandpa wired

The FT is still a subscription publication so I am not sure how long this article will be accessible.

As the name suggests it is all about technology and the old. Not their use of the Internet but the supportive technologies that enable them to “age in place” (i.e. remain in their own homes).

The above video is from the Center for Ageing Services Technologies. It goes on too long and could be cut in half to still convey the same messages but it does show what is already possible.
As the article says.

The goal is to enable the elderly to live safely and independently at home for longer. For their adult children, the point is peace of mind.

I think the benefits of the technology for the kids are probably more than for the parent. It is all about minimizing the ‘guilt’ of not being able to physically do more to help the aged parent.

From a marketing point of view it is clear to me who the customer is for these technologies. Let me give you a clue – it is not the parent.

A couple of the companies mentioned in the article are Grandcare and AttentiveCare. Worth checking out the products and services they provide. Dick Stroud

Off-shoring care

The US and Europe have got themselves into a real tizzy over the loss of manufacturing jobs to China and service jobs to India.

There is another loss of employment that we will see in the next couple of decades. As the cost of caring for old people rockets, the attraction of packing your bags and heading for a low cost area increases.

It is estimated that 40,000 to 80,000 American retirees already live in Mexico, many of them in enclaves like San Miguel de Allende or the Chapala area.

For $1,300 a month — a quarter of what an average nursing home costs in the US - you can get a studio apartment, three meals a day, laundry and cleaning service, and 24-hour care from an attentive staff, many of whom speak English.

This article (with video) from USA today gives a taste of things to come. Dick Stroud

The Care Market – the unexciting, exciting market

Give a marketer the choice between becoming a brand manager for some techno wizzy zillion pixel ultra wireless thingy or a care service for infirmed oldies and I think I know what they are likely to choose. But, that would be the wrong decision.

The provision of the multiple formats of care, is, and will become even more, a mega, multinational business.

You are going to see a lot more of these types of announcements as companies try and claim the language and standards of the care.

A new Web site has been launched to assist care home professionals – notice this is the workers not the recipients.Launched by Help the Aged, but funded by BUPA (one of the UK’s large providers of care and medical insurance) the site, www.myhomelife.org.uk enables care home professionals – from assistants to inspectors – to share best practice on key topics such as creating a sense of community within care homes and staff training. In addition care homes will be profiled.

This is a smart move by BUPA, linking up with Age Concern (the UK’s leading charity for old people). Watch this space. Dick Stroud

Care.com – this is a smart idea

Thanks to Rick Hartley for telling me about this web site.

This is a great example of a Web site that has a very distinct product offering that is enabled by social networking functionality.

Care.com is a simple concept. Somebody needs a service – somebody wants to provide a service – Care.com acts as the matching engine PLUS provide the tools to improve the decision of both buyer and seller. Great idea.

In addition, the company looks to make money out of a subscription charge.

Most of the types of care are relevant to the 50-plus both as providers and sellers.

It is also worth looking at from a Web site design viewpoint. It is simple and uses Web 2.0 stuff in a supportive rather than overt way. Dick Stroud

Ecumen - an interesting looking care company

I have done a lot of work at the old-old end of the 50-plus market in the residential and care sector. This is an overlooked part of the market but one that will is becoming increasingly important.

The people from Ecumen contacted me to tell me about their web site. They look an interesting outfit.

I was amused at their choice of “The top five web sites that are changing aging” Why they chose Zimmers is beyond me. Other than that, if you are interested in the care market then this site is worth a visit. Dick Stroud