The Cost of Aging in Place

A New York Times article alerted me to a new study by the National Alliance for Caregiving and Evercare. This group’s research has documented the real costs of caregiving. Their work explains how business, industry government and community can save by helping caregivers with flexible schedule, information and other supports. The new report: Family Caregivers – What They Spend, What They Sacrifice breaks additional ground by spelling out the The Personal Financial Toll of Caring for a Loved One (report subtitle).

Data was gathered in two sections – a large sample telephone survey and smaller sample spending diaries. The findings are not shocking to folks in the field, but this is documentation. People spend too much of their own money and time on loved ones with implications for their own long term care. Equally important the ‘cost’ to caregivers’ careers, lives and emotional stress is revealed. The report found that caregivers are not complaining about their labor of love, but see the time commitment as a more serious burden than the financial commitment. That is not to say that the financial commitment is incidental. From the Key Findings: “Survey respondents reported that they had an estimated annual out of pocket expense of $5,531.00. This is more than 10% of the median income of the group which was $43,026.”

The report lists bold policy implications. Tax legislation giving caregivers relief from long term care expenses should be high priority. Paid leave, support services and other programs from government and employers should address a huge sleeper issue: “Are unpaid caregiver services as we know them sustainable over time as the population ages and longevity increases?” Asking this question makes the report bold, innovative and special.

There is substantial variation between spending guesstimates provided in the phone survey and the detailed spending details from the diaries. In contrast to the $5,531 annual expenses listed by telephone respondents, diarists reported 30 day expenses of $1,029. That works out to annual spending of $12,348. If nothing else this speaks to the importance of real financial data contrasted to off the cuff estimates. I know my guesses about construction costs and the price of the shirt I am wearing at any given time are usually below actual costs. People need to know the real story to act responsibly, to plan and to handle things well. Without real data people cannot plan. As longevity increases and is compounded by the random happenstance of health incidents it is very hard to make any plans at all.

This issue was pertinent when I was selling Aging in Place remodeling services. My competition, assisted living, had a monthly fee for basic services. Some facilities priced additional a la carte services as well. I could not compete. Potential clients wanted to compare the apples of my design and construction to the assisted living facility’s oranges. The quality, affordability and ease of engagement for home services needed to bring value to the design modifications was a large unknown.

Little has changed. In the few places where comprehensive management is available the cost is prohibitive. When other services will be needed, how much will be needed and for how long is too much to guess even if availability is assured. Most folks I engaged in this discussion were too smart to go down that road. Even though I lost the sales I had to respect their wisdom.

That leaves us with my closing charge to the research and policy community:

• We need to understand the financial mechanisms of Aging in Place.
• We need to develop the infrastructure to make Aging in Place work.
• We need a payment system that spreads the costs among the population.

We need to do this out of respect for the folks who want to Age in Place. They deserve to know what things cost and what resources are available. We need to do this for all of us who are taxpayers and buy insurance and will soon need the services. We need to do it for our kids who will otherwise be left with huge bills for an inefficient system that is not of their making but will be our folly.