Marcum LLP
Thoughts of the Week

By Jeffrey M. Weiner, Chairman & CEO, Marcum LLP

 

Nursing Home Math

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Nursing Home Math
 

Hallo, aus Berlin (hello from Berlin.) Yes, that's Berlin, Germany. David Bukzin, our vice chairman, and I arrived here Wednesday morning for meetings on expanding the Marcum brand internationally. We are here until tomorrow at 9am local time, when we head back home.

I've got to hand it to Terry Robinson, the guy from Texas in the headlines who's planning to skip the nursing home and spend his golden years at a Holiday Inn instead. His Facebook post on this went viral. He did the math and concluded it's cheaper to live at the moderately priced hotel than at an average-priced nursing home, the cleaning help would come in handy, and it's probably more fun, thanks to the pool, spa, workout room and other extras like the free daily breakfast buffet. Plus, there's no waiting list if you want to check in, he said. "They treat you like a customer, not a patient," he wrote.

Wacky as it may sound, he may be on to something.

Marcum's Healthcare Services Group just released a five-year statistical analysis of long-term care industry trends, which looked at the 15,000 nursing homes in the U.S. Not surprisingly, they found that many Baby Boomers prefer facilities that offer private rooms and hotel-like amenities. Independent or assisted living anyone?

Today, 70 is the new 50, and many people who are lucky enough to enjoy good health stay active for decades past retirement. They're not looking to slow down, even if they need a little help with daily chores and activities. And with the U.N. predicting that the population of people ages 60 and over will more than double by 2050, whatever those of us in this generation (and caregivers thereof) choose to spend our money on is going to rock the business world everywhere.

The big challenge, as in every industry, is keeping pace with what customers want and still running a healthy business. Most seniors can't afford to pay for the equivalent of a five-star resort when they start needing care, even if they have long-term care insurance.

That's where smart strategic planning comes in. As we found in our report, everyone in the nursing home industry is facing obstacles to keeping the quality of care up and costs down, given shrinking reimbursements, rising labor costs, and intense competition from home healthcare and assisted living facilities. The operators who will succeed are those paying attention to what consumers are saying and who will find creative, cost-effective ways to make the customer experience better. By allowing providers to benchmark themselves against others in the industry, the report provides a reality check as nursing homes consider how to prepare themselves for tomorrow's residents.

How they deal with the talent shortage is another issue altogether - one that many of you with aging parents may have experienced first-hand. My instincts tell me the nursing home industry will become an early adopter when it comes to new technologies like robotic nurses. Robots are already standard equipment in the lab. Why not on the nursing floor? You might not like the thought of a robot rolling up to Mom or Dad's bedside, but who could argue against using them to help with routine tasks like dispensing medication? It's a good way to free up live personnel for the hands-on work that requires empathy, and TLC.

I won't be surprised if some of the best solutions to nursing homes' challenges will come from outside the industry. As Terry Robinson recognized, people in the hospitality industry are experts at making people feel at home, and doing it at scale. My guess is we'll see some interesting mergers in the next few years, as players in both industries spot all of the synergies and come up with hybrid approaches.

In the meantime, those of you who are nowhere near thinking about nursing homes may have to prepare for some competition next time you need to book a hotel room - from fun-loving retirees staying there permanently.

On another note, "Green Book" surprised many Sunday night by winning the Oscar for best picture. I watched it on the plane over to Berlin Tuesday night. I must say I haven't seen the presumed front-runner "Roma" yet, but I can certainly see why the Academy members voted the way they did. If you haven't seen "Green Book" yet, do so. You won't be disappointed.



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Disclaimer

The opinions expressed in this column are solely those of Jeffrey M. Weiner and do not represent those of Marcum LLP, its partners or its employees.

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