While demographics of an aging population present favorable growth opportunity for the senior living industry, demographics alone will not be enough for providers to boost senior housing’s value proposition to future consumers, senior living experts say.
The age 65 and older population is growing rapidly. In 2010, these older Americans comprised 13% of the U.S. population, according to Administration on Aging data. By 2030, the 65 and older population will represent 19% of the U.S. population, or an estimated 72 million older adults.
Senior living operators and providers are going to have to analyze psychographics, such as attitudes, values and fears, rather than simply looking at the large demographic numbers when attracting residents in the months and years going forward, said Ryan Frederick, principal at Point Forward Solutions, during the 23rd National Investment Center (NIC) for the Seniors Housing & Care Industry conference in Chicago on Friday.
“It isn’t hard to see that the demographics in the [senior housing industry] are changing,” Frederick said. “This is an upside and a downside of our field. As a result, providers need to look instead at the psychographics of consumers.”
Studying variables among trends that are less tangible than traditional demographics can be useful in attracting future residents, especially during a time when consumers have a variety of options to choose from, said Frederick.
“As new options come onto the market, senior living providers will have to focus on more consumer-oriented needs to find ways to innovate around that consumer, or else others are going to do that for you,” he said.
For today’s operators, finding ways to experiment in service deliveries and care practices to see how current residents respond can help prepare for the next wave of consumers who might not want the same services as older generations, agreed panelists during the “Senior Housing Snapshot—Communicating Today’s and Tomorrow’s Value Proposition” discussion.
While looking at other metrics and demographic trends can provide some additional perspective in the way the industry is headed, population size still cannot be ignored in terms of absorption rate for senior housing.
“The 85-plus population has been growing stronger than we’ve been seeing an increase in occupied units,” said Chuck Harry, managing director at NIC and director of research & analytics.
Population growth has exceeded demand for senior housing, as the age 85+ population has increased 28%, while occupied units have increased 13%, according to NIC data.
But as today’s senior population ages with higher acuity needs and multiple chronic conditions than previous generations, providers might also want to think about converting some of their units, if independent living, to accommodate assisted living residents’ needs.
“As we think about the future it’s important that we look at the metrics we have,” Frederick said. “However, we need to be mindful of things that we can only anticipate today.”
Written by Jason Oliva