Cascade Healthcare, a Seattle-based joint venture between Columbia Pacific Advisors and Emeritus Corp. (NYSE:ESC), recently received permission from the Shanghai government to open the first foreign-owned, for-profit senior care facility in China.
“The need for senior care in China is staggering,” said Dan Baty, a principal investor in Columbia Pacific Advisors and Chairman of Emeritus, in a statement. “Over the next 10 years China’s senior population will grow to 280 million people according to its census, and there are virtually no senior care facilities. It has long been a tradition in China that the family cared for the elderly in the home, but the rapidly expanding economy dictates that people now need more help to provide for the elderly.”
The company has partnered with a local real estate development firm, and construction for the 100-bed facility is set to begin in October and be completed by May 2012. As Cascade Healthcare is a joint venture, Columbia Pacific’s role in the facility’s development will draw on its experience in building and operating hospitals in Asia under a related company, Columbia Asia, since 1994.
Cascade Healthcare has been authorized to develop a prototype care facility in a building it’s leasing in Shanghai, said Baty. The company plans on spending almost $5 million to remodel the building into a skilled and rehab senior care facility, similar to what Emeritus operates in the U.S.
“This first project is a prototype in the truest sense of the word,” Baty said. “It will allow us to refine our facility design and staffing to meet the specific desires of the population that we are going to serve.”
The need for senior-specific care facilities is evident as currently, seniors are crowding into Shanghai’s tertiary hospitals. The volume of people who need care is straining the ability of government-run hospitals to adequately serve the elderly, said Serena Xie, a Shanghai native who is now the managing director of Cascade Healthcare, in a statement.
The Chinese government’s one child policy, along with a strengthened economy, contribute to why senior care facilities are becoming necessary, Xie said.
“It used to be that big families could take care of their elderly members, but with fewer children who are expected to work harder, there often is not enough time. Our care center will provide families a better option,” she said.
Unlike in the U.S., payment for senior care will come mostly from families rather than government assistance. Care costs in China will be similar to U.S. rates, and will be based on the level of care that is needed.
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Written by Alyssa Gerace