Why Seniors Housing Can’t Ignore Disruptive Technology

by Christian Sweetser

It’s 2025. Imagine your morning routine.

As you awake, your day’s appointments are displayed on your glasses. Your digital assistant begins to speak, giving you a quick rundown of important meetings and reminding you that your refrigerator is low on milk and eggs. You have a message from your doctor because your biosensor has alerted your physician’s digital assistant to a change in your blood pressure. Your vital signs have continued to be monitored and your physician indicates you won’t need a medication, but you need to stop eating fast food and skipping time at the gym. Your personal trainer is alerted and a salad is pre-ordered from your favorite restaurant to be delivered to your house for dinner.

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The above envisions a world not of smart devices but a smart environment that makes our lives more convenient and effortless. It’s also not far away, including in seniors housing real estate.

Though seniors housing has not traditionally viewed itself as health care, technology is moving so quickly that it could challenge the necessity and very business model of seniors housing today. Some advances do in fact have the potential to disrupt the status quo, and seniors housing should be paying close attention. This rapid technology evolution is behind the two highly influential themes in health care today: accountable care and consumerism, and seniors housing has the unique opportunity to connect the two.

Driving innovation, transforming care

This new wave of technological innovation is being driven by an abundance of cheap data.

Exactitude in data used to matter when information was costly, but myriads of messy information often provide more revealing results. The harnessing of this data has enabled companies such as IBM and Google to produce intelligent software systems that can perform knowledge work tasks involving unstructured commands and subtle judgments.

For instance, IBM is turning its Watson clinical artificial intelligence into a cloud-based tool that will be accessed by clinical sites around the world. With this level of access and diagnosis power available anywhere, it completely opens up how the practice of medicine and care is organized and performed. Additionally, numerous companies, including Apple, are working on cheaper and better sensors such as ingestible health monitors and implantable devices.

Currently, more than 9 billion devices around the world are connected to the Internet; the number is expected to increase to somewhere between 50 billion and 1 trillion in the coming decade.1 The terabytes of raw data produced by these numerous connected devices will help address care coordination gaps and identify new treatment pathways. This “Internet of Things” has the potential to improve the health of patients with chronic illnesses through efficient remote monitoring, to empower patients to more effectively manage their own health with customized messages and reminders, and to enhance the business model for seniors housing via active dialogue with one’s physician and personalized care components.

Health care behind

As exciting as some of these advances may be, health care has been slow to incorporate mobile and/or automated knowledge technology.

Although many health care organizations have assumed the financial risk related to patient outcomes under accountable care, few have translated this risk into effective alternatives for treating and monitoring patients. Yet, there is no shortage of potential technology solutions available: An estimated $4.5 billion has been invested in digital health technologies in 2015 supporting the creation of more than 150,000 iOS and Android health-related apps.2,3 This increasing supply of digital health has been met or exceeded by growing demand, as more than 3 billion downloads of digital health apps occurred in 2015 alone.3 Apart from electronic medical records, health care has not embraced new electronic or technology health tools. The potential reductions in costs associated with fewer hospital readmissions, as compliance with treatment protocols can be easily monitored, are huge. Similarly, further hospital cost reductions could be realized through shorter lengths of stay generally necessitated by observation.

The primary obstacle for more widespread adoption across health care is that very few applications have undergone rigorous study. Well-conducted trials have shown that mobile health interventions, even simple ones, can influence patient behaviors.4 However, what is still needed is evidence that these digital technologies can indeed facilitate improvements in health.

The mobile and digital development world is built on speed and market penetration. Developers and pioneers in this space need to be accepted by the medical profession, a field which is most influenced by evidence and rigorous study, before these technologies will be recommended to patients. Moreover, health care providers and payors are unlikely to either consider implementing or reimbursing for these novel interventions until there is good evidence that these approaches have clinical/outcomes benefits.

Seniors housing as the solution

Despite the promise to significantly reduce costs once integrated into the health care system, the digital health market is almost exclusively technology and consumer driven. The health care system needs to be capable of testing novel, low-risk interventions such as text messaging or remote monitoring in the context of care and potential outcomes. By making seniors housing an agile and rigorous health technology testing ground, the industry could solve the dilemma between health and wellness tech developers and health care practitioners that require “evidence-based solutions.”

Seniors housing can and should bridge the divide between the health services delivery system and the consumer-driven health market. Not only will this put seniors housing in the driver’s seat for access to the most innovative health technologies, but it will also strategically position the industry as a critical component of the post-acute environment. The post-acute care environment has been identified as driving more than 75% of the variation in Medicare spending,5 so both providers and payors want to know if any of the new health tech interventions are worthwhile. With seniors housing providing much needed outcomes data collected in an unbiased and robust way, health systems and payors will have the tools to predict important outcomes, including identifying patients likely to require expensive care, be readmitted, or experience a specific type of adverse event.

Housing for seniors will always be needed, but not necessarily seniors housing. Let’s not kid ourselves: as an industry, seniors housing struggles with the widespread adoption of WiFi, let alone having the capacity to integrate clinical research into existing footprints or supporting the systems needed for the management and documentation of a clinical trial.

However, none of these issues is insurmountable from a cost basis or expertise perspective. As an industry, seniors housing has a venerable history of innovation of its own. The services and care provided continue to evolve within the industry. Expectations of boomers and future generations will continue to change and progress, and we must be ready for it. The pace of technological progress is not slowing down. Large data sets continue to be utilized to connect, simplify, and digitize processes across every sector of everyday life, private industry, and even the public sector, enabling more efficient delivery of many services. The winners will be those that embrace and facilitate the shift. Those that don’t risk becoming irrelevant to their customers—not someday, not maybe, but definitely, and starting now.

1Halpern S. The Creepy New Wave of the Internet. New York Review. November 20, 2014

2mHealth App Developer Economics 2015: The Current Status and Trends of the mHealth app Market. http://research2guidance.com. Nov 2015

3Rock Health. Digital Health Funding 2015 Year in Review. http://rockhealth.com/reports/digital-health-funding-2015-year-in-review/

4George Institute for Global Health. Tobacco, Exercise and Diet Messages (TEXT ME). http://www.georgeinstitute.org/projects/tobacco-exercise-and-diet-messages-text-me

5Institute of Medicine. Variation in Health Care Spending: Target Decision Making Not Geography. Washington DC: National Academies Press 2013

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Christian Sweetser is Vice President of International at Welltower (NYSE: HCN). He serves as a director on all international joint venture boards and oversees foreign currency transactions and risk-hedging positions for a $4B international real estate portfolio across four countries. His responsibilities also include providing analytic and implementation support for multi-country and multi-jurisdictional investment transactions and portfolio management. Mr. Sweetser holds an MBA from the University of Chicago Booth School of Business and a BA from Cornell University. In addition, Mr. Sweetser is a CFA Charterholder.

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