June 20, 2019 | Written by: David Kwon
Categorized: Cognitive Computing
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Medical advances have lengthened the average American lifespan. In 1950, the average American was expected to live 68 years, according to the CDC, and by the late 1970s, Americans were living well into their 70s. By 2016, the average American could expect to live to be nearly 79 years old.
But longevity poses a significant financial challenge to older Americans, and rising costs in long-term care threaten to drive retirees into financial ruin. A digital experience can help mitigate the problem.
Insurers responded to increases in American longevity in the 1970s by introducing long-term care insurance. It reimbursed policyholders a daily amount (over many years) for services to assist them with activities of daily living, such as bathing, dressing or eating. In addition, its affordability helped to protect homes and financial assets. As long as the premium was paid, the policy was locked in.
Today, long-term care insurance is harder to find. Rising life expectancies and falling interest rates have deteriorated long-term care insurance’s profitability, and costs are rising. A semiprivate room in a nursing home costs more than $88,000 per year, according to the Association for Long Term Care Planning, and the Alzheimer’s Association calculates lifetime care for patients with Alzheimer’s or dementia at more than $341,000.
IBM currently estimates the financial shortfall in long-term care to be around $4 trillion and rising in the U.S. For retirees, Medicare won’t help with these rising costs; it only covers short-term stays in skilled nursing facilities, and even then, coverage ends after 100 days.
The solution to this problem lies in the senior population’s increasing digital presence. Seniors aren’t just living longer; they’re becoming more tech-savvy, too.
According to Pew Research, 42 percent of adults 65 and older own smartphones — up from 18 percent in 2013. Internet use among this group has risen 55 percentage points over the past two decades; 67 percent of the senior population is now online. Fifty-eight percent of adults ages 65 and older say technology has had a mostly positive impact on society, and roughly three-quarters of internet-using seniors say they go online every day.
Why are these Silver Surfers important? Because they are the core of the long-term care target segment. Digital is now a viable and effective channel to influence seniors toward healthier lifestyles, help them stay home longer and recover faster from a health event.
In partnership with Apple, IBM created a suite of iOS-based tools that provide personalized digital long-term care engagement and ensure that seniors can stay at home for longer by promoting cognitive, physical and emotional health.
By improving memory, thinking, learning, recognition and communication, we can keep elders sharp and focused, and we can keep their bodies healthy with individualized physical fitness programs.
Loneliness can be an issue for elders living alone. By encouraging social engagement through things like community events, we can help keep people connected and happy.
The digital experience for long-term care should help seniors manage their nutrition, medication regimen and home services. The IBM app suite contains three tools that satisfy those needs.
- Elder at Home: This iPad app helps with tasks such as pill management, grocery orders and the booking of services, such as yard cleaning. It also displays community events to help elders stay connected, and lets them chat with their families via internet video.
- Elder Support: This iPad app helps visiting caretakers organize and document elder visits by filling out key information that indicates a senior’s health, such as their sleep patterns and trips outside. It also integrates with the Elder at Home app and can monitor multiple seniors throughout the day.
- Elder Advocate: This iPhone app is designed for family members; it gives them real-time access to caretaker reports, shows them what their senior has been doing at home on his or her iPad and gives them access to the caregiver’s observation reports.
The suite, which has been in use in Japan for 18 months, can help long-term care insurers better care for policyholders and improve their quality of life while keeping costs down. The tools feed critical data to back-end analytics systems that can help insurers to detect high-risk policyholders early and intervene with individualized support programs. Even a modest improvement translates to major reduction in claim costs and reserves.
The digital revolution provides an innovative new path toward solving our long-term care challenge. The digital experience journey begins, as always, with people — gaining deep appreciation of older Americans’ wants, needs and challenges in long-term care.
With great digital experiences, supported by analytics, we can turn the long-term care crisis into a major business opportunity — by engaging policyholders toward healthier and happier lives.
Learn more about IBM’s capabilities and research in cognitive elder care.