The Evolving Eldercare Models in China

Bloomberg’s recent BusinessWeek article on the looming eldercare crisis in China reinforces many of the points industry watchers already know:  the demographic need is immense and the list of interested people who want to get into the market grows longer every day.  Established eldercare operators of almost every stripe and flavor from around the developed world are eager to find a model that will work in China.  Many pivotal questions need to be answered about what the right model for China is, not least of which is the role retirement communities versus in-home care will play in meeting the country’s need.

While in-home care is in many ways complementary to formal retirement community living and care-giving, in-home care may also ultimately be a more flexible and cost-effective mechanism for addressing the overwhelming number of Chinese people who need care, many of whom may never have access to the financial critical mass necessary to move into caregiving facilities.  Equally of interest, the infrastructure necessary to successfully conceptualize, train and implement in-home eldercare may very well lay the groundwork for the same sort of home healthcare business model which is still evolving in the United States, but has application to the general populace, to gather steam in China.

One of the world’s leading in-home eldercare providers is Omaha, Nebraska based Right at Home.  , their Vice President of International Operations, very generously set aside an hour to speak with me last week about his company’s experience in China.  The services Right at Home provides include:  safety supervision, companionship, bathing and hygiene care, meal preparation and housekeeping from a few hours a day to 24 hours a day. Right at Home has international franchises in the United Kingdom, Brazil, and now China as well; but, as Blake acknowledged, China has presented them with some unique challenges that are being addressed as they continue expanding in the country.  At the simplest of levels, part of what Right at Home faces is what almost any business in pursuit of the Chinese market for any product quickly comes to terms with:  the size of the country makes your marketing team’s mouth water, but getting focused and picking the right strategy is a real operational challenge.  As Blake put it, “The shear numbers, the lack of available facility based care or any sort of residential care simply isn’t there, and the need is on a much greater scale than what we have seen in other developed nations.”

For all the differences, it helps Blake to see that there are actually many similarities between what motivates a North American family or independent senior to choose in-home care and what motivates a Chinese family when they make similar choices.  According to Blake, just like in the United States, “people want to stay in an environment they are familiar with.  They are going to face not only significant emotional strain, but also physiological stress from a move like this.  For them, the convenience and familiarity of being at home is a strong motivator.”

Blake was quick to point out that in-home care is in many ways complementary both to facility-based solutions, but also to families who may not have the financial bandwidth to either pay for relocating their parents to a stand-alone community, or for full-time in-home care.  As Blake put it, “many Chinese are living with or close to someone who is providing care.  The services that a home care agency like ours provides are simply supplements to what the family or their loved ones are capable of providing.  We are a respite.  The family is the primary care giver, we simply provide a break and relief.”

This remains one of, if not the most important, factors in determining which solution proves more adaptable in the Chinese market:  dedicated communities versus in-home care.  Both may well prove to be successful, but in terms of the ability to broaden beyond the high-wealth niche existing planned community developers are targeting with their initial expansions, into the middle and even lower-middle class Chinese families who need help but cannot afford a retirement home, in-home care like what Right at Home is offering may prove to be the more economical solution.  If so, in-home care could well find itself on a growth curve independent of, and asymmetrical to, the growth of residential eldercare communities.

Blake acknowledges that in order for the in-home care model to succeed, there are just as many cultural, familial and governmental issues that will need to be addressed and overcome.  He remains positive that the Chinese government will continue pushing forward positive regulatory changes that will benefit the industry at large.  Blake shared with me that they are watching the China National Committee on Aging as they “talk about how to best make the family part of the solution for eldercare.  This tells me there are some really smart folks at all levels of government who are not sure the hospital-centric, facility-centric model is going to be the best solution in China.”  Beyond this, Blake hopes to see the Chinese government implement what Right at Home calls “care transitions programs.”  According to Blake, this would be a model where state hospitals have “formalized departments to advise families on options to get their elderly family members into either in-home or residential services.”

Why is this so important?  Because, as Blake shared with me (and something I have heard from any number of Chinese eldercare operators), formalized eldercare either is largely unknown by Chinese, or if it is something they are aware of, many times it has a bad reputation.  As Blake put it to me, “the institutional structure and habits [of China’s hospitals] get in the way of this [education] being done.”  Successful in-home and residential care facilities will find a way to integrate themselves into Chinese hospitals, in much the same way US-based home healthcare providers locate on-site staff in American hospitals to grab referrals as patients are discharged from the hospital.  In the US it is a collaborative process that functions as both a cost containment tactic, while also educating housebound patients of their options for receiving healthcare at home.

This idea of education was woven tightly throughout our conversation:  educating the workers on how to best care for elderly people, as well as educating Chinese families on what is possible in terms of care.  I shared with him the example of my wife’s 90-year old grandmother who had a stroke several years ago but has since, through physical and speech therapy, had an amazing recovery.  In China, as Blake put it, they may not be aware that “grandma can get better.”  Sometimes, as Blake said, that is as simple as letting the family know what their options are, but sometimes it is as expansive and impactful as making a family aware that with a little bit of physical therapy their loved one can return to a quality of life they assumed was gone.

As industries ranging from consumer goods to industrial products have shown, the Chinese market is large enough to accommodate multiple solutions with different models, each catering to unique demographics and consumer preferences.  Eldercare will be no different.  Blake knows this and reiterated that their model is designed to be flexible enough to work purely in an in-home environment, but also as a supplement to facility-based healthcare.  Regardless of where the care takes place, Right at Home’s success will be determined not only by factors outside of its control (the role of the Chinese government), but by those that are firmly within its own grasp (quality, marketing, perceived value), a realization that every successful operator in China undoubtedly shares.

For more on Right at Home’s China operations, including photos, videos and presentations of their China opening, go to http://china.rightathome.net