Ring the Alarm! There’s a Global Caregiver Shortage. Can Technology Help?
Let’s talk about the caregiver shortage. This topic always comes up in my conversations with elder-care providers. Hiring and retaining great caregivers is the #1 challenge.
This article comes at the heels of two events that have the potential to make a huge impact on the age tech ecosystem: the Biden administration’s plan to invest $400B in elder care, and Honor’s acquisition of Home Instead which creates a $2 billion home care giant.
What does it mean to have a global caregiver shortage? What are the underlying root causes? And how can technology solve it?
One of the causes for the caregiver shortage is the demographic shift our world is going through. A decrease in birth rates combined with an increase in life expectancy mean that people over the age of 65 already represent a significant portion of the population, as much as 28% (in Japan) and close to 20% in Europe. This is a global trend, and by 2050, 20% of the global population will be over 60. On the macro level, these demographic changes affect the dependency ratio – which is the number of dependents aged zero to 14 and over the age of 65, compared with the total population aged 15 to 64
How do these global changes impact the number of available caregivers? According to the Global Coalition on Aging report, “Across OECD countries, the number of elder care workers will need to increase by 60% by 2040 to maintain the current ratio of caregivers to older people” In numbers, that is 13.5 million new care workers. In the U.S., where, 70% of Americans who reach age 65 will need long-term services and support, there will be a national shortage of 151,000 care workers by 2030, and a 355,000-caregiver shortfall by 2040.
Without a robust professional caregiving workforce, the burden of caring for aging adults will inevitably fall on unpaid, untrained family caregivers
(Source: GCOA & Home Instead report – Building The Caregiving Workforce Our Aging World Needs)
Having unpaid caregivers take on the role of caring for their older loved ones is quite costly, and can add up to billions of dollars annually in lost productivity – which makes the caregiver shortage an issue that governments should care about. Since most older adults prefer to age in place, and it is also the most cost-effective option for families and taxpayers, there was an alignment of interests and a universal understanding (even before the pandemic), that we should do whatever we can to enable older adults to live in their home of choice, and bring care (both medical and non-medical) to them, rather then have them move into an institutional setting.
What exactly do caregivers do when they care for an older adult?
A caregiver, caretaker or carer is someone who takes care of someone who needs help with the activities of daily living – dressing, bathing, eating, etc’. Oftentimes, their role also includes providing companionship and emotional support, helping the care-recipient run errands, driving them to appointments, and in the case of financial caregivers (usually those would be family caregivers) – managing finances, paying the bills and overlooking the financial well-being of an older loved one.
How can technology help?
Home automation
While most of us don’t have Mark Zuckerberg’s coding skills or resources to pay Morgan Freeman to be the voice of your home AI butler, I suspect we’re not so far from having our homes automated in a similar way. Right now, most of us rely on manual labour to run a household, whether we outsource it or do it ourselves. At best, we have a robotic vacuum and a robotic mop to clean the floors, but that’s about it when it comes to household maintenance. Older adults who require assistance maintaining their home will usually get the help they need from a family or paid caregiver (or both).
This is far than ideal for two reasons: one, if you’re a family caregiver working a full-time job, managing a household and raising kids, having to help your older loved one with grocery shopping, meal preparation and household maintenance is a huge burden, and it also takes away from the precious time you have to spend with them in their later years. Second – for paid caregivers, who usually have a limited amount of time to spend with each client, spending the majority of it doing stuff that can (and will soon be) automated doesn’t leave them with a lot of time to do much of anything that isn’t on the task list – like providing companionship or going out for a stroll in the park.
We would be better off as soon as whatever can be automated is automated, thus freeing human caregivers to do the things that are uniquely human – like providing companionship, comfort and emotional support. How great would it be if all caregivers ever had to do was just be there and spend quality time with our elders, rather than handling the bills and washing the dishes? I suspect that reducing the physical load of caregiving will go a long way towards drawing more people into this profession. After all, most caregivers become caregiver
Training caregivers at scale
When you see the numbers and realize we’ll need millions of caregivers to enter the workforce in OECD countries alone, you have to ask yourself – how is it possible to train millions of people to perform a job that is so high-touch and demanding? The answer is – we already have the technology for that. Platforms like CareAcademy and In the Know have been providing online training for professional caregivers for several years, and have been used by some of the leading care-providers in the industry.
Delay dependency and increase health expectancy
By increasing health expectancy and not just life expectancy, we can reduce the number of older adults who require ADL assistance, and the number of years in which older adults require this type of assistance. This is no easy task, and insurers encourage older adults to pursue a healthier lifestyle by covering tech-enabled solutions like Bold, and Silver Sneakers.
Solutions like Apple’s gait assessment tools can also go a long way towards preventing falls and delaying dependency, by making users more aware of their own health and hopefully encouraging them to take action to mitigate the risk of falling.
Tech-enabled home care
Honor, which is a tech-enabled home care unicorn, recently acquired Home Instead, which is the largest network of independently owned & operated franchise owners in the world.
“This acquisition fundamentally transforms the senior care space, flipping it from analog to digital. Technology will drive operational efficiency and personalization at scale, which is the only way to meet the skyrocketing needs of the baby-boom generation. If we increase our capacity to care, the next generation – and those after – will reap the benefits as well.” (Marc Andreessen, cofounder and general partner of the venture capital firm Andreessen Horowitz and Honor Board of Directors member. Source: PR, Honor acquires Home Instead)
This acquisition creates a home-care giant worth $2.1B, making it the largest player in the projected $500B home care industry. It will enable Honor to distribute their operations platform and technology to care-pros across the Home Instead network, increasing operational efficienty and giving the joint venture a leg-up on the competition. Jeff Huber, Home Instead CEO, was quoted in the joint press release saying “Honor and Home Instead will continually enhance training opportunities for caregivers. Honor’s easy-to-use interactive app gives caregivers access to more hours and allows them to participate more in the process, which improves their overall satisfaction”
Will the rest of the home-care industry adopt, acquire or develop similar technology? That remains to be seen. I, however, believe that this acquisition is a turning point and will accelerate the race towards tech-enabled home care for all.
Any additional thoughts on this opportunity? Feel free to direct-message me using the contact page. You can follow me on LinkedIn, Twitter or subscribe to my YouTube channel!