Retirement villages: great idea, but let’s think about their business model

This article come to use from The Guardian, a UK-based news source.

Let me just say, when I read this tag line, my first thought was “of course developers of retirement villages would say that, their business is developing villages and care homes are their competition.” So, I read this article with a skeptical mind, expecting to find some bias to support my initial opinion.

I think this exemplifies one aspect of the booming elder market and the dementia industry. Smart business people have realized that there is an increasing number of older adults and many of these will need some type of care as they continue to age. It really is a booming market and there are people who are profiting – it IS business, after all – but many of these people new to this market don’t have the compassion or the knowledge to understand what housing and care is and means to people. I get a little queasy when I realize that businesses see these wonderful elders in society as revenue and not as individuals with wants and needs and personalities. My best hope for these types of care homes and villages that are started by people new to the market and looking at the growing profit, is that they hire and continue to educate compassionate, knowledgeable staff who will make the place somewhere that is not only financially sustainable but also a good place to live.

Retirement villages offer a better quality of life for older people, survey finds

Developer of retirement villages says that most care homes fall short of modern standards and expectations and should close

New research suggests that residents in retirement villages experience only half the levels of loneliness reported by older people living independently elsewhere.

Three in every four care homes for older people should be shut down because they fall short of modern standards and expectations, according to a developer of retirement villages.

Nick Sanderson, chief executive of Audley Retirement, said demand for his company’s form of extra-care housing – where people have their own home with 24-hour care support available – was so strong that he could not build schemes fast enough. “I started by developing and operating care homes and saw a lot of people moving in who frankly should not have been there,” Sanderson said.

“That’s how we started housing with care. There is a need for care homes. There always will be. But it should be a specialist and, dare I say it, end-of-life provision, particularly around issues like dementia. They are not somewhere where people with low-dependency needs should be. There are 500,000 care home beds. Personally, [I think] 75% of them should be shut. They do not meet modern standards and they do not meet the expectations of our customers.”

Sanderson was speaking at the launch of research funded by Audley and care group Bupa on the wellbeing of residents of retirement communities run by Audley and Anchor Trust. The research by ageing population think tank ILC-UK suggests that residents experience only half the levels of loneliness reported by older people living independently elsewhere. It claims they have a higher quality of life and feel more in control of things. The findings are based on 201 completed surveys, a response rate of 27%, and only 6% of respondents reported experiencing “poor” or “very poor” health.

This is a very low response rate and a small representation of the aging population, also primarily older adults who are in decent to good health and presumably cognitively healthy enough to understand the questions and respond. Also, living in a group situation will obviously provide more occasions for socialization when compared to adults living independently in private dwellings, so it’s not really ground-breaking research to claim that people who live with others are less lonely than people who live alone. Furthermore, I would be very interested to know which quality of life assessment was used in the research, as there are many of them out there and they can measure many different things. Check out my post Are Danes the Happiest in the World? for a discussion of different things that QOL assessments can measure.

Audley runs eight retirement villages and is developing four more. Residents buy a house or apartment and share facilities said by the company to “rival any country house hotel”. They pay a monthly fee plus any care costs and, on selling the property, a separate management fee of up to 15% of the sale price.

Sanderson said: “We can’t build fast enough at this particular time. We can’t find the land to meet our objectives. We could sell everything we build several times over. It’s an idea whose time has come.”

Jeremy Porteus, director of the Housing Learning and Improvement Network, which promotes extra-care housing, said central and local government needed to forge stronger partnerships with developers like Audley to get more schemes off the ground.

The extra-care model was equally successful with homes built for rent, Porteus stressed, although capital investment for those was in shorter supply.

Martin Green, chief executive of Care England, which represents leading care home operators, said Sanderson was ignoring both the high level of dependency of the typical care home resident in 2015 and the fact that most people could not afford to buy into Audley’s model of housing with care. “I think he was rather foolish not to acknowledge the reality that in the 21st century there is a chronic need for very high dependency care of people who would not be able to live in one of his care villages,” Green said. “They are not options for anybody but the very rich.”

I also thought one of the comments on The Guardian article was thought provoking, and wanted to include it here as well:

Sounds great for people who are in early retirement and perhaps a bit physically frail, but who remain mentally able (and have sufficient resources to meet the costs). However, it’s a huge leap to extrapolate that positive results from a very small sample of able retirees (canvassed by a commercial company to prove its own agenda) means that 75% of current care homes could and should be shut down.

According to Alzheimer’s Society figures, 80% of people currently living in care homes have some form of dementia (my mum included):

These are generally the 80+ age bracket, whose needs are hugely labour-intensive and would not be met by such residential schemes. Furthermore, it should be remembered that the population is not divided into a clear “them” and “us” (with/without mental capacity) in old age. Those who move into assisted living may well develop more intense needs over time – what happens to them then?

At present, they often have to move out of these developments into secure nursing homes, not only when they themselves require more care, but when their behaviour becomes disruptive to other residents and is deemed to pose a risk.

It’s this high-dependency dementia end of the market that is in desperate need of investment – but of course it’s harder to make profit here. That’s not to denigrate this company, which may well provide an excellent product for those whose level of need is suitable for it; but what about the rest?


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