Senior living providers in the United States believe that their business model could be significantly disrupted by the trend toward older adults aging in their own homes, which is being enabled by new technologies.
This was a key finding of “The State of Senior Living: An Industry Grappling with Autonomy,” a new report from architecture firm Perkins Eastman. The survey gathered responses from about 200 senior living industry professionals, mostly C-suite leaders with nonprofit providers. These providers offer a variety of different types of housing and services, such as standalone independent living and assisted living buildings, as well as continuing care retirement communities (CCRCs).
Perkins Eastman has been conducting the survey on a biennial basis since 2015, but this was the first year that it included questions related to industry disruption. Specifically, Perkins Eastman identified four disruptive forces and asked respondents to rank them.
“Aging in the community — decentralized care and services” ranked as the biggest source of disruption, with 83% of respondents saying this is very or extremely impactful. Technology — ranging from artificial intelligence to virtual reality and home automation — came in next, with 76% of respondents ranking this as very or extremely impactful.
The other two disruptors were “third act,” which refers to alternative definitions of retirement, and paradigm shifts related to climate, politics and finance.
The disruptive forces are intertwined, the report authors noted. For instance, technology will enable more aging in the community and decentralized care. Indeed, nearly 80% of respondents said that tech that allows people to be autonomous in their care, such as grocery delivery or wearable monitors, will be extremely or very impactful.
“The striking insight from this survey is the interest in alternatives and options that enable the individual to control their own destiny and chart their own path, whether by accessing services in the broader community or creating communities that provide more autonomy and self-directed control of their housing and health care needs,” the authors wrote.
Preferences of aging baby boomers appear to be driving this disruption. Nearly 70% of respondents said that the ability to stay at home and access services would be the most important consideration for boomers as they look for supportive housing.
Still, that number is down somewhat from the 2017 version of the survey, when 75% of respondents said that this would be the boomers’ No. 1 priority.
Home health care providers, payers and managed care organizations are all driving the trend of decentralized services delivered in people’s homes. For instance, insurance giant Humana (NYSE: HUM) has been outspoken about its strategy to “own the home” — that is, the company intends to manage and pay for more at-home services for older adults, to drive down costs while improving consumer satisfaction and health outcomes. This strategy underpinned Humana acquiring a 40% stake in Kindred at Home, the nation’s largest home health provider.