Last week, China Daily published a story profiling the chronic shortage of skilled nurses for the country’s elderly. They noted, “China is lacking millions of nursing home employees to care for the country’s growing elderly population … many avoid the profession because of the heavy workload, low pay and social stigma attached to it.” Estimates range on how much of a disparity exists between supply and demand, but if you are trying to get a sense of the scale of the problem, China Daily put it this way: “the county has only 300,000 caregivers … estimate[es] that China needs about 11 million caregivers.” Call me crazy, but this seems like a pretty compelling business opportunity in and of its own right.
These sort of infrastructure needs can be easy to overlook. After all, the sort of financial returns that might be possible by emphasizing real estate plays, or on long term operating contracts to provide senior care services, are probably much greater than the return on investment that would come by focusing on basic training as a business model. But for the senior care industry to successfully develop in China, one of the basic predicates that must be addressed is the provision of trained staff.
High end operators are not immune from this problem: the more time and money it takes to find and train staff, the longer the runway is to get open and to turn a profit. Operators, both private and public, have even more chronic problems. Last week Xinhua profiled the problems senior care operators are having in China, with particular attention paid to operators like the Cunaochunhui Home for the Aged. Wang Xiaolong, the CEO of the Cunaochunhui Home commented that they have 40 nurses for 100 seniors, and that even at this ratio, the nurses were overwhelmed. Wang added, “We also feel a shortage of employees, as we cannot pay our nurses well enough.”
It can be an over-used analogy, but one that feels appropriate in thinking through the problem related to the paucity of trained healthcare senior care workers in China: while the gold rush in China’s senior care industry may be CCRC style models, prospective entrepreneurs may be overlooking the bigger picture opportunities to provide the infrastructure and services that enable the successful evolution of China’s senior care space. If you are familiar with the California Gold Rush, you may also know that when you net out the economic benefit of this period in America’s history, it was actually . The best example of this was Levi Strauss, whose denim empire started in San Francisco in the midst of the Gold Rush fever.
Training in particular is a difficult nut to crack in China, but analogs in other industries who have been successful with a stand-alone training model in China can be found. The challenge is thinking about whom in China is incentivized to pay for trained staff at such a scale as to be economically meaningful. This will inevitably be a market where both public and private operators will need to be brought to the table, as will academic institutions and other governmental agencies that have skin in the game. But, an entrepreneur that can bring together the various stakeholders who have a deep commitment to seeing China evolve a trained senior care workforce and illustrate how to monetize the training process might well be one of the first businesses to financially benefit from the mounting demographic crisis China faces.
By: Benjamin Shobert, ,
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