Ask HN: Why is senior care so expensive?

[sam345]

For example a dementia patient might pay $11,000 a month in the US for memory care. Staff members are very sparse maybe five people on the floor at any given time serving say 20 clients. Staff members may be making $50,000 a year. Medical Care is minimal it's all almost manual labor ADLs (activities of daily living) washing them bathing, dressing, feeding, behavioral redirection,etc. Staff complains that they don't have enough people to do one-on-one care which dementia patients often require. But with that kind of funding they could probably afford it at least a two to one ratio. Even given overhead which is minimal real estate cost and that's about it. We are not talking ICU or even general hospital care we are talking about ADLs for the most part. Please no complaints about greedy insurance companies etc. greedy insurance companies should want lower cost too plus long term senior care is normally funded mainly by patient themselves as I understand it. I am truly interested in the economics. Surely if it could be done cheaper people would do it to compete.

[mikewarot]

  $50,000 / year
  * 5 care takers at a time
  * 3 shifts 
  * 2 (staff, food service, laundry, billing, social services, etc.) 
  * 1.2 (employers part of taxes)
  ------
  $18,000,000 / year
  ÷ 20 patients
  ------
  $90,000 / year
  ÷ 12 months year
  ------
  $7,500 / month

That's just in labor/staff costs, let alone the fact that this is a highly regulated medical establishment.

Edit/correction - thanks subtra3t!

[toast0 → mikewarot]

You can't cover three shifts 7 days a week with three groups of people, unless there's a lot of overtime; that's 56 hours per person. Four groups of people covering a week is 42 hours per person, which you can either take the overtime, adjust individual shift start /stop to manage (assuming you don't need exactly 5 staff on duty at all times), or have managers provide coverage.

[p1esk → toast0]

Do you really need 24 hour coverage? Are these patients really such a danger to themselves or others that you have to keep an eye on them at all times day and night?

It seems to me that even 4 hour a day care would already result in a huge quality of life improvement over no care at all.

[toast0 → p1esk]

At a live in senior home facility? Almost certainly. At a memory care facility, even more so; some of these patients can't sleep normal hours, and they can do some pretty disruptive stuff in general.

Does it need to be the same staffing at night and during the day, probably not.

For seniors that are generally independent or cared for by family? 4 hours of care could be plenty, sure.

[muzani → p1esk]

It's usually not all but there's an outlier in there somewhere. Many are critically ill. Some are on dialysis. Many are sick and yet refuse to take their medicine, and yet insist on doing heavy labor.

There's also some who can't go to the bathroom without help. These aren't dangerous, but they require a lot of attention. There's dementia. There's people who poop on the ground then sort their shit.

But many overlap with the above - the ones who can't move about pick up all kinds of illnesses. Pills for both mental health and physical health damage the organs, and so on.

We do see them cutting costs where possible, but nobody can do this on their own in a shift. An old lady who has fallen off her bed can be carried by 1-2 strong people with the right technique, but you still have the others. There's also the question of nobody wanting to do so. We interviewed a bunch of maids to see if they'd take care of the elderly, and nearly all rated it as their last option, compared to watching kids, cleaning cat litter, cooking, etc. There's the legal liability of being the caretaker of a paying customer who's at death's door. Many of the people who leave them there do not care about them, won't even visit them during holidays, they're just paying someone else to watch them die.

[p1esk → muzani]

I'm guessing the vast majority of people with dementia cannot afford paying $11k/mo. What are their options? Is there an option of paying (much) less to receive a fraction of 24/7 care?

[muzani → p1esk]

What my wife did was quit her engineering job to take care of her mother (and the kids) full time. But mostly the mother; we can hire babysitters but not afford senior care.

I believe an economist called it an external dependency. The family structure is designed for this kind of thing. But we started outsourcing senior care, which led to retirement plans, etc. It fixes a lot of things, but it may not be sustainable with longer life spans etc.

I expect us to eventually cold turkey and go around back to family-based care, even if we as a society have to take a productivity hit.

[howard941 → p1esk]

The only options are draining all assets to qualify for Medicaid, or family care.

[pyb → mikewarot]

This. Night shift is probably fewer than 5 staff, but even then, 24 hour care is not cheap.

[solardev → mikewarot]

Would it be cheaper just to hire someone to be a full time, live in caretaker for them?

[toast0 → solardev]

If you need 24/7 coverage, that's a job for 4 people. And you need someone to coordinate and hire (probably a service).

[OnACoffeeBreak → solardev]

My partner does at-home one-on-one care for people with dementia. No degree. No qualifications other than she really cares and is amazing at it. $25 an hour cash (no taxes). 24-hour care, that comes out to over $18k per month.

[lastofus → OnACoffeeBreak]

Not judging here, but that’s some serious consequence tax fraud if caught.

[p1esk → OnACoffeeBreak]

Somehow I think if the standard salary for this kind of work is 50k/year (~4k/mo), it shouldn’t be too hard to find people willing to do it for double that (8k/mo) especially if it means living rent free.

[_kwef → mikewarot]

I think at the last stage you meant to write month and not year.

[Spooky23]

Most of the cost is borne by Medicaid because people exhaust their insurance and assets.

It’s a nasty business, the operators extract money through various means and labor costs are high. The facilities “lose” money but the owners make money through kickbacks from rehab, OT and other providers, who get better reimbursements from Medicare.

The way to lower cost is in-home care. A modern, well run operation providing at home care, rehab and other value ad services deliver higher quality care at lower cost and higher margins.

[giantg2 → Spooky23]

Some states are filial responsibility states where they can force the children to pay for nursing home or other elderly care. Isn't that fun...

[giantg2]

Benefits are a significant cost not included in your salary number. Those are just the workers. You also have salary and benefit costs for administration. You have costs for contracted services such as food, maintenance, billing, legal. You have liability insurance, utilities, taxes, etc.

No joke, my dad has told me that if he ever gets as far gone as my grandma was, to just buy him a one-way ticket to Nome Alaska. It's unsurprising that the majority of the people I know who committed suicide were diagnosed with dementia and decided to end it.

[h2odragon]

Seems like an opportunity to build a business providing lower cost, higher quality Senior care, right?

Amazon and Uber have shown the way: ignore laws you don't like, taxes you'd rather not pay, and build your business in spite of the regulations that distort the current market. Once you've absorbed all the competition you're legal "by default" and accepted as an Institution that cannot be challenged. (Payoffs to politicians prolly help a lot here, too).

Imagine a Day Care facility for those under 5 and over 65. Let the kids take care of the old folks and vice versa. Most of the real work will be done by the customers and all you gotta do is sit back and let nature take its course. The real job an administrator at such a place would have would be keeping busybody regulators from destroying the shop.

[sam345 → h2odragon]

Can't tell if this is a serious answer? I never said anything about ignoring regulations why would you ignore regulations? I like the idea about children and seniors but what's the comment about sitting back and letting nature take its course?

[h2odragon → sam345]

"nature takes its course" means Kids and old people enjoy interacting with each other, in my experience.

Ignore regulations because regulatory compliance is a significant source of the expenses involved in Senior care, and "just ignore them" is a viable proven strategy for startups.

[sam345 → h2odragon]

Also for clarification my comment about liking the kids idea is about kids interaction not about them taking care of the elderly. Studies have shown and in my personal experience show a huge positive impact to the elderly as well as the young. The Uber comparison does not follow. Having an app match drivers and riders was an unregulated space. The senior care area is very much regulated you can't simply ignore state certification before you open doors.

[aborsy]

I’m curious, what happens to such patients in USA, when they have no one and no funding?

[solardev → aborsy]

They just live out lonely existences in cheap apartments or trailer parks under government assistance if they can get it, or freeze to death on the streets if they can't. In the USA we don't really care about our poor citizens; if you don't have money you're basically invisible and disposable and the most the middle class and up will care about is making sure you're not in their neighborhoods. Out of sight, out of mind.

I'm friends or family of several elderly people and it's really not a pretty existence at all. Basically you just work if you can, combine it with some government assistance, and eke out as much of a living as you can until you die.

Seeing them in these situations makes me really not want to grow old in the USA.

[aborsy → solardev]

It’s kinda scary. I’m not sure if it will be much better in other countries, given the growing aging population.

If one is unlucky and the process isn’t fast, it could be terrible. I can only hope it will end in less than 6 months, from the loss of independence.

[solardev → aborsy]

Yeah =/ I always think of those commercials for that suicide pill (Quietus?) in that movie Children of Men... the only retirement I'll be able to afford (maybe), lol.

[tucaz]

I recommend the book “Being Mortal” by Dr Atul Gawande. He is the same author of “The Checklist Manifesto” which I also recommend.

The book doesn’t touch the economics of elderly care but it offers a comprehensive explanation about how we got here. It also talks a lot about the operational details of dying which is something that the majority of people never thought about and is certainly eye opening.

[howard941]

> Staff members may be making $50,000 a year

That's high. Figure closer to $20/hr. And that doesn't buy someone who's able to dispense medication.

Memory care is not ADL - it's a 24x7 custodial job.

[toomuchtodo]

Because human time is expensive, and when this work is done uncompensated in the developed world, you don’t know it unless you’re in the situation.

I encourage you to make an attempt to deliver a cheaper model to understand the experience and the challenge. You either win or you learn. Find a senior care facility and volunteer for a week to understand the need.

https://www.aarp.org/pri/topics/ltss/family-caregiving/valui...

https://www.aarp.org/content/dam/aarp/ppi/2023/3/valuing-the...

> An AARP report from 2023 showed that the estimated economic value of uncompensated family caregiving was $600 billion in 2021, up from $470 billion in the previous study in 2017.

To note, this is estimated economic value of uncompensated. To understand the situation, you would need to add to this compensated care paid for by either Medicare or Medicaid in aggregate at the national level.

https://www.cms.gov/newsroom/fact-sheets/national-health-exp...

> Nursing Care Facilities and Continuing Care Retirement Communities (4% share): Spending for services provided at freestanding nursing care facilities and continuing care retirement communities rose in 2022 by 5.6% to $191.3 billion, compared to a decline of 7.8% in 2021. Medicaid, out-of-pocket, and Medicare account for over three quarters of total payments to these facilities and, in 2022, spending for these payers had strong growth following low growth or reduced spending in 2021.

> Home Health Care (3% share): Spending for services provided by freestanding home health care agencies increased 6.0% in 2022 to $132.9 billion, accelerating from growth of 0.3% in 2021. Private health insurance, out-of-pocket, and Medicaid home health spending contributed to the faster growth, while Medicare spending growth for home health care services slowed.

So, we're at close to ~$1T in annual spend, very roughly speaking. At the same time, there is a constant shortage of CNAs and other folks who do this work, because the work is very hard and underpaid.

Labor shortage citations:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9894029/

https://www.ahcancal.org/News-and-Communications/Fact-Sheets...

https://www.usnews.com/opinion/articles/2023-12-21/proposed-...