Here is another thoughtful blog post from Bob O’Toole, contributing author to Cathy Cress’s Handbook of Geriatric Care Management, Third Edition.
Rethinking the Private Geriatric Care Management Business: A 3 Part Series, Part 1 by Bob O’Toole
In recent years, numerous entrepreneurs have ‘discovered” the eldercare market, determined it was a veritable gold mine and developed various business models to mine the mother lode.
In their May 26th, 2011, issue, Wall Street Daily Research published an article that described the eldercare services industry as “The Big Business of America’s Graying Population.”
“The business of caring for the elderly  is growing, as Americans’ busy lives and distant locations make it tougher to take on the hands-on care often needed for loved ones.”
Some have been successful; many have failed, losing –collectively- millions of dollars in the process.
The biggest mistake these spectacular failures have made is to assume that the market for eldercare services, such as professional geriatric care management and private duty home care services is huge. After all, 76 million baby boomers faced with elder care issues with their aging parents are going to need these services to manage parent care issues. Medicare and other forms of insurance don’t generally cover the costs of these services, so families will have no choice but to pay for them out of pocket.
Professional geriatric care management and private duty home care services along with the services of elder law attorneys and other service providers all have the same basic payment model. The billable hour.
How Large is the Market for Fee-based Elder Services that are Billed by the Hour?
Those 76 million plus baby boomers are now in their 50’s and 60’s. Due to unprecedented longevity, many have aging parents who are now in their 80’s and 90’s. The pressures of work, geographic distance, or other demands, makes it challenging for concerned family members to navigate our very complex maze of services and payment mechanisms and eligibility rules. With so many service providers and facilities, how can they make an informed decision about finding the best care for elders who need care?
The uninsured costs of such care can place a strain on the financial resources of those needing care, as well as those caring for them. They clearly need the advice, experience, skill set and knowledge base of a fee based geriatric care manager. Family caregivers are overwhelmed and need a professional to provide a thorough assessment of their situation and create a care plan that addresses the full range of medical, emotional, financial and legal needs.
In our increasingly mobile society, long-distance caregivers also need help to implement the care plan and monitor the care, allowing them to proceed with their lives.
According to the recently published "long-term care cost study" funded by insurance giant Genworth: "Home care rates have remained flat in part because of increased competition. If a person needs only 6 hours per day of care to stay at home the annual cost is about $41,000."
A person needing round the clock care at home due to the limitations caused by Alzheimer's disease, Parkinson's disease and stroke. Will need $73,000 at $200 per day and $109,000 at $300 per day to pay for just 1 year of care in 2012.
In other words by 2030, there will be about 72.1 million older persons, but less than 7 million of them will be able to pay for home or facility care if they should need it.
Next: In Part two of this series we’ll discuss taking a fresh look at the “billable hour”. To serve the growing population of frail elders and family caregivers eldercare professionals need to “think different” about creative ways to deliver services and how they price these services.
Bob O’Toole, LICSW, is an experienced Professional Geriatric Care Specialist, and an expert in private alternatives to pay for the cost of long-term and chronic care. He is the author of “Private Revenue Sources for the Fee Based Care Manager: Need vs. Demand in the Private Eldercare Market” Which is chapter 17 in the Handbook of Geriatric Care Management, third edition, published by Jones and Bartlett.
Read about the Third Edition of Handbook of Geriatric Care Management and more on author Cathy Cress’s website and blog.