Organizing For Aging—An Investment Imperative

5/5/14

Starting now, venture capitalists should reflect on an opportunity that probably occupies them very little.

They know they are in the medical progress business, having financed numerous hard-won successes in developing drugs and diagnostics for rare diseases. Along with general material progress, the application of DNA science and genomics in biotechnology is giving millions of us a longer, fitter old age. But, as Human Genome Sciences founding CEO Bill Haseltine noted in a talk to the Life Sciences Foundation in Cambridge on April 15, these magnificent advances also rapidly expand the numbers of Americans over 65 who, a few years from now, will suffer from multiple infirmities and diseases.

Obviously, older people will need a lot of help, just as the current largish supply of family caregivers begins to shrink. We will all need to pay a lot of attention to moderating the cost of that help to older people and the rest of the society.

Some numbers. There are somewhat more than 44 million Americans over 65. That is 14 percent of the U.S. Census’ 2013 estimate of 316 million for the total population. We are on track to an over-65 population of 72 million (nearly 20 percent of the total) as soon as 2030. A large share of the 4 million U.S. babies born in 1948 (plus some immigrants) made it to 65 last year, so Americans are reaching retirement age at the rate of 7 per minute. After subtracting those over 65 who die each year, the net increase in the nation’s silver cohort is 3 per minute. And in America and other wealthy economies, average life expectancy after 65 is at or near 20 years.

A massive demand for innovation lies in those numbers. And the needed changes are not just technological. We need to build organizations that handle the whole period of old age, not just piecemeal but across the board—and that provide a strong barrier against scams. We need to organize to help older people live the more self-sufficient, valuable lives they have been given. We need to free them for more service to family and community, and ensure that they are not isolated like those who died in heat waves in Chicago in 1995 and Paris in 2003.

The existing organizations to help older people tackle their challenges, both day- to-day and in emergencies small and large, are not sufficient. Subsidized housing aids some poorer Americans. About 6 million older Americans live with their children, some 1.25 million in nursing homes, 900,000 in Assisted Living communities of about 100 people on average, and 600,000 in about 2,000 Continuing Care Retirement Communities (CCRCs) across the nation. But even added together, those form only a small minority. Something like 3 out of 4 older U.S. residents live at home, alone, or with a partner. Most of them fervently want to stay home, even though their children worry.

And home is not just where the heart is, but, increasingly, where the health care is also. Today, as a study by AARP’s Public Policy Institute recently noted, there is a ratio of 7 to 1 of unpaid caregivers between 45 and 65 for each person over 85 (when disabilities and major illnesses pile up). As soon as 2030, the ratio will be only 4 to 1. How are we going to fill the caregiving gap?

Medical trends give this question extra edge. We already see a wave of hospital mergers. Doctors are flooding out of private practices and going on salary as employees of large organizations. More people’s future will surely include large health maintenance providers like Kaiser Permanente. Patients are paying a bigger share of their health bills. They face increasing pressure to do a lot of health monitoring at home, and thus to become a lot savvier about their health.

There is a very new but promising approach to such challenges: the “Aging-in-Community” Villages that have sprung up across the U.S. since the pioneering Beacon Hill Village in Boston started operations in 2002. Three more opened in 2007: Cambridge at Home (in MA), Staying Put in New Canaan, CT, and Capitol Hill Village in Washington, DC. Despite the crash of 2008 and continuing economic crisis, the number has grown to 125, with 100 more in formation.

The Villages are designed to help people remain confidently in their homes as they grow older. They offer access to background-checked suppliers, rides to grocery-shopping and doctors’ appointments requiring an escort, and free exercise classes, and they organize a wide range of cultural and social activities. With memberships of up to a few hundred households, the Villages essentially are a global tool for older people to get help when they need it both for coping with both practicalities and for finding social stimulation.

This no project for sissies. As their older members’ capacities fade very gradually, the Villages cannot endure without the energy and focus of a core group of civic activists in their 50s and 60s. To be sure, the Villages aren’t the only model for managing all this. They have competition. But by keeping people in their own homes, giving them frequent medical information, and encouraging a kind of medical citizenship, the Villages have a huge potential to help steer scarce medical money where we really need to use it.

Clearly, the Villages are very relevant to handling the cost pressures building up under the Affordable Care Act. These are forcing a growing push to reduce unnecessary bureaucracy, tests, and treatments. They also sharpen the discussion of the value of new drugs for rare diseases emerging from biotechnology companies. Villages can help make the most of home health care—by elders themselves and by trained, regulated home visitors. This work supplements the opinion-shaping role of organizations like AARP.

If one calculates that there are at least 25 million Americans over 65 who need a friendly, concierge-like manager at their elbow, then we could need tens of thousands of Villages quite soon.

But how to organize these Villages? So far, the 125 loosely linked local non-profits and the others in formation have each scraped together, say, $300K over several years to get going. The National Village-to-Village Network spurs the movement from a small office in Newton, MA.

A red-blooded free-enterpriser would ask: Is there room for a national, for-profit entity to organize, standardize, and professionalize Villages? But why not have AARP manage a non-profit network? Or do we try some mixture? Perhaps Villages could tie up with CCRCs. Or could non-profit boards hire management professionals from a company like Life Care Services of Des Moines, IA (which helps 100 or more retirement communities)?

Venture capitalists, particularly those focusing on applying life science, need to start thinking right now about such opportunities for organizational innovation. After all, older people are prime users of biotechnology products. The massive revolution in aging is tightly linked to the future success of their existing and potential high-tech ventures.

Victor McElheny, a science writer at MIT and Xconomist, is the former president of Cambridge at Home, one of the national network of Villages. Follow @

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  • anonymous123

    Consider ways to set up these networks more informally, as “caregiver-shares” in the community. I have a disabled spouse who needs about 30 minutes of assistance throughout the day while I work – our caregiving service (paid for out-of-pocket) books 4 hour minimums so he has too much care in the morning and not enough in the afternoon. It would be great if we could share this caregiver with someone else whose needs may not be met with the current paradigm. As 30/40-year-olds, we especially want to stay in our own community. (And we are the lucky ones, to be able to afford the care our family needs!)

  • Bill Ghormley

    Thanks, Victor for this article. The constituency you point to is a great target for innovation of all kinds.
    In helping my parents (88 & 90 years old) it has become clear that, as you say, “concierge services” are a must have — especially in that they need an outlet for their seemingly constant political agitations, if nothing else!
    As you imply, a good percentage of seniors are ready, willing, and able to try new technologies and services, and can make up “user groups” that can provide rapid concept evolution and commercialization.
    The point you make about the vacuum of structured leadership is HUGE — and the ratio of folks at home makes this a potent opportunity, just waiting for a more creative, practical model to pursue.
    Thanks for sharing these thoughts — a compelling call to action!