A Bank and Caregiving, Huh?

11/02/2017 04:49 pm ET Updated Nov 03, 2017

While we’re used to the idea that technology disrupts markets and daily lives, it turns out that our 21st-century megatrend of population aging is changing how we live and do business in ways just as profound as tech. Disruption indeed. Exhibit A is this week’s Bank of America Merrill Lynch (BAML) release of its research study with Ken Dychtwald’s Age Wave on caregiving. The report, The Journey of Caregiving: Honor, Responsibility and Financial Complexity, examines the huge gap between the need/demand and supply of elder caregivers, as Americans live long lives to 100 and across the nation there are increasingly more old than young.

So why would a financial institution spend time on elder caregiving? The answer, as demonstrated by the report, is that caregiving, and population aging more broadly, is disrupting everything around us, including the financial services industry. And the effects aren’t limited to the US – this is a global phenomenon impacting super-aged societies such as Japan, across Europe, and in China, where the caregiving mess is even more pronounced.

Let’s be clear, we’ve always had caregiving, and we’ve always had challenges for caregivers, who are the multitude of family and loving neighbors who provide largely unpaid care for those they know. But what’s new here – what makes this a society-wide issue of enormous magnitude – is the aging of society. This aging will dramatically increase the number of older people who need elder caregiving – those caring for parents, grandparents, neighbors, and loved ones who, in earlier times, would not have been alive because they just didn’t live that long.

For example, in America, our 80+ population is the fastest growing age segment and will account for nearly 8% of the US population by 2050, up from just 3% in 2012. On the other side of the world, the number of Chinese over 65 will increase from 100 million in 2005 to 329 million in 2050. Some large percentage of all these older Americans, Chinese, and others around the globe will need care that costs money and has impact on all our lives.

So, if you’re a financial institution like BAML, no wonder this hidden cost of 21st-century longevity is of some interest! And if you’re such a financial institution, good-old-fashioned business interests will coincide with Michael Porter’s genius idea of Shared Value to lead to innovative pathways for client service. But to fully understand what’s going on here, consider the data that this new report reveals about our aging American society:

- 40 million Americans say they are unpaid caregivers. And we know that, because of stigma and misunderstanding of what elder caregiving is, these numbers are vastly understated.

- The untold impact of elder caregiving on people’s health – in terms of stress, mental and emotional wear and tear, and resultant chronic physical conditions like cardiovascular disease – costs families and society huge amounts of often unnoticed dollars.

- 71% of elder caregivers say their financial contributions are causing them stress. This demonstrates, once again, the close connection between financial wellness, mental wellness, and physical wellness.

- The high financial costs of elder caregiving are reflected by the 30% of caregivers who cut back on expenses; 1/4 who have trouble paying their own bills; 1/5 who have to dip into their own savings; and the full 15% who actually take on debt. And this is only what is admitted!

- And then there is the even more hidden impact on worker productivity, which of course makes this an employer issue. 61% of family caregivers admit that they “come to work late,” “leave work early,” “spend time during the day…on mom or dad,” or “decline opportunities for promotions.”

- Yet, elder caregiving is a feature of life that also has huge upsides for most elder caregivers. For example, 91% of these caregivers say they are grateful to be able to provide care.

All of these stats lead to a critical question. If elder caregiving is an issue erupting like childcare did 35-40 years ago, what are the solutions?

First, we need to do more to acknowledge, understand, and research this topic, just as this BAML-Age Wave Report has done. If, as the Report finds, $7,000 is the average amount spent on caregiving annually, the financial piece is at least as big as the health impact.

Second, we need to provide the public policy incentives to grow the elder caregiving market, which is new, but exploding. In large measure, these incentives should be directed toward providing professional care at home, where people want to age. Lori and Paul Hogan started Home Instead Senior Care in Omaha, Nebraska about 23 years ago, based on their personal experience with the caregiving needs of their grandmother. Home Instead is now in every US state and over a dozen countries. This success shows that home care is catching on globally and is the market answer to the BAML stats on what this caregiving does to adult children – in Beijing, Munich, Sao Paolo, or Minneapolis – as the UK Queen’s Award for Innovation acknowledged.

Third, we need to apply our best entrepreneurial spirit to this 21st-century mega-challenge. Enabling better and more formal elder caregiving will happen as we apply innovative technology, such as Intel’s remote care monitoring and delivery system to the likes of the best of the Home Instead personal, relationship-based care. This is the technology-enabled approach to person-centered care that we need if we are ever to relieve the financial and health burdens the new BAML Report reveals. Surely one solution is for the training of millions of new elder caregivers and providing high-quality information for family caregivers. And on this, watch the start-up space closely, including a new web-based digital global innovation called EasyCare Academy, which will continue the disruption.

We are, in this new century, at the brink of a truly older world brought about by the miracles of hygiene, science, and medicine. Living 100-year-long lives – routinely – is a milestone that for the history of humanity has been unimaginable. But, now, with the once extravagant prospect of growing old becoming our norm, the appearance of new and different challenges and needs erupt. Elder caregiving is one such need, but with its recognition, now a few steps closer, we can solve this one, too.

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