The United States Plans to Invest $400 Billion in Elder Care – What Does This Mean for Age Tech?
The U.S. economy is the largest economy on earth. So when newly-elected president Joe Biden’s $2.3 trillion infrastructure plan includes $400 billion to support elder-care – everyone should be paying attention.
In a fact-sheet released by the White House about “The American Jobs Plan”, they explain that this administration’s aim is to “Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers”
The administration’s acknowledgement of the fact that the caregiving crisis is partially caused by low-wages paid to caregivers, and that elder care is infrastructure, is incredibly important.
President Biden believes more people should have the opportunity to receive care at home, in a supportive community, or from a loved one.
The $400 billion will be used to do the following:
- Expand access to home and community-based services (HCBS) under Medicaid.
- Extend the longstanding Money Follows the Person program that supports innovations in the delivery of long-term care.
- Support well-paying caregiving jobs that include benefits and the ability to collectively bargain (form unions).
Two other parts of the plan that could prove especially impactful for the advancement of age tech are the plan to invest $180 billion in R&D and $100 billion to build high-speed broadband infrastructure to reach 100% coverage, reduce the cost of broadband internet service and promote more widespread adoption.
Who could benefit from these investments?
The significant $400 billion investment to expand home and community-based services and increase wages and benefits for caregivers, could be like rocket fuel to an industry that’s been steadily growing in recent years – the home care industry. With the national spending on home health topping $100 billion in 2019, the number of businesses providing home care has grown by double-digit percentages since 2016, and IBISWorld estimates that the market size itself has grown by ~1% per year during those same years.
Since many age tech companies view home care providers as either direct customers or important channels for distribution – a growth in that industry increases market size for those companies.
Supporting caregivers will promote age tech
The bill also includes support for creating more caregiving jobs, with higher wages and more benefits – with the purpose of solving the caregiving crisis.
The caregiving crisis is arguably the home care industry’s biggest challenge. Caregiver turnover rates that are higher than 60%, and the average cost of replacing one caregiver is $2600 – these numbers don’t leave providers with much time or financial resources to invest in technology. If the bill is successful in improving the status of caregivers – this should go a long way towards reducing these costs and freeing-up resources that providers could then invest in technology that could compliment their existing, labour-intensive service.
If the demand for caregiving jobs increases, there will be a need to train lots of new hires. Companies like CareAcademy and InTheKnow offer online state-approved caregiver training that could train large numbers of caregivers at scale.
Money follows the person
Entrepreneurs in age tech should view this bill as an opportunity from the Money Follows The Person (MFP) angle as well. This program specifically states that one of its goals is to “Increase the use of home and community-based services (HCBS) and reduce the use of institutionally-based services”. Medicare and Medicaid have been covering remote patient monitoring and other home health technologies for years, allowing clinicians to extend their services into the home. Regulatory changes during the pandemic have finally made telehealth widely available.
MFP’s emphasis is on aging in place, which today, more than ever, can be enabled with the use of multiple smart home technologies. Telehealth services, home sensors and wearables for fall detection and wellness monitoring, VR solutions for rehabilitation, online fitness programs and loneliness-reducing solutions – are just some examples for commercially available solutions, many of them are already reimbursable or covered by insurers. With the expansion of HCBS and MFP, it is highly likely that more government funding will be used to fund aging-in-place enabling tech.
Eliminating a major barrier for tech adoption by older adults
One of the barriers for adoption of these technologies today is the lack of internet broadband in many homes across the USA. According to a report published by OATS and the Humana foundation earlier this year, 22 million older Americans don’t have internet broadband at home. The plan to invest $100 billion in internet infrastructure that will cover 100% of the country and make internet more affordable, together with the Emergency Broadband Benefit program should fuel efforts to connect older Americans and effectively increase the market size available for age tech companies.
What are other countries doing to support age tech?
Australia’s aged-care reform places an emphasis on ag tech, and a report from the Royal Commission into Aged Care Quality and Safety recommends to “implement an assistive technology and home modifications category within the aged care program that provides goods, aids, equipment, technologies and services that promote a level of independence in daily living tasks and reduces risks to living safely at home”.
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Canada’s government invests in aging innovation, through organizations like Centre for Aging + Brain Health Innovation (CABHI) and AGE WELL, and also through the aging in place challenge program, which aims to reduce the number of older adults requiring nursing home care by 20% by 2031.
The EU has also been funding projects for technologies for aging well, and has been doing so for quite some time.
In conclusion, it appears that the Biden administration’s infrastructure bill, as well as similar moves by governments from other parts of the world, place a greater emphasis on the role of technology in promoting aging in place and the well-being of older adults. A timely investment that I’m sure will prove effective in advancing the age tech ecosystem.
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