Senior living – novel concept or business opportunity?

LIKE Alice in Wonderland, I am getting curious. Will our Economic Transformation Programme (ETP) healthcare NKEA initiative address Malaysians’ sustainable long-term care and living issues?

Without question, we have some ageing society issues and challenges in our immediate future. I have friends, family members, business associates and many others who are seeking comfortable senior living solutions in almost every part of Malaysia be it in more populated urban areas or smaller towns. Some are already suffering due to the lack of it while others have ended up in old folks’ homes.

According to the recent OECD report on “Help wanted? Providing for long-term care,” spending on long-term care in OECD countries is set to double, even triple by 2050, driven by the ageing populations. The report shows that governments need to find a way to provide better support, cost-effectively, for family caretakers and professionals.

Policy makers often treat long-term care reform as being too tough a nut to crack or too far off into the future to worry about. Luckily, we now have many examples of countries that have adopted good practices worthy of emulation.

The concept of “seniors living” is mentioned in ETP handbook on healthcare, chapter 16 “Creating wealth through excellence in healthcare.” Seniors living is identified as one of the two longer term business opportunities in Malaysia, which could deliver significant economic benefits. Unlike nursing homes which focus on final stages of care, seniors living promote active ageing, productive living and integration into the community. Key services offered under the umbrella of seniors living would be integrated personal assistance domiciliary, personal and medical care.

What needs to happen to turn this so-called senior living novel concept into reality for Malaysians? What kind of economic or financial indicators does the Government need before it takes this lack of affordable services seriously?

Rising demand

According to the ETP handbook on healthcare, the number of Malaysians aged 60 years and older is projected to increase to 3.4 million in 2020 (9.9% of total population). Few elderly people can escape the accumulation of chronic pathologies due to physiological changes such as ageing kidneys, memory deficit, altered dietary habits and dependence on multiple prescription drugs.

This growing segment of consumers is likely to create a need for outpatient care in seniors living facilities. The long-term goal is to create a number of centres offering assistance to people who need help with daily living but wish to live as independently as possible for as long as possible.

To address these needs, existing infrastructure can be refurbished to develop barrier-free housing fitted with disabled-friendly features. Other facilities would include wellness, primary and secondary healthcare options.

Can our government provide some milestones for such projects to be implemented? We know that good planning takes a lot of time and effort, resources, expertise, talent, skills and experiences.

Business opportunities

The development of a seniors living infrastructure is expected to deliver 11,400 new jobs and RM1bil in incremental GNI by 2020. The target market is primarily local Malaysians and potentially a small portion of the Malaysia My 2nd Home applicants who come for healthcare purposes. Opportunities such as these don’t come around very often and could entice forward-looking businesses to take immediate action.

The ETP handbook on healthcare recommended that for seniors living to be successful, Malaysians should be able to tap into their Employee Provident Fund or other retirement savings to fund a seniors living lease; or that insurance reform occurs to permit coverage of seniors living support. In this case, government agencies need to be discussing now with financial institutions to ensure an evolution of the private pension system and insurance schemes so that Malaysians can sustain a senior living lifestyle.

The second initiative is to get support from property developers to view a build-operate-transfer model as an attractive value proposition instead of the current build-and-sell model. It is proposed that property developers not only build, but work through third parties to manage the properties.

Recently introduced incentives for green living and businesses have led to an explosion in housing development of green properties. Perhaps the Housing and Local Government Ministry will initiate discussions and provide financial incentives for property developers to cater their current and future housing projects to the elderly and disabled?

And, for seniors living businesses to be successful, the Human Resources Ministry needs to address the lack of human capital skills, experts and specialists in delivering senior living services by importing “talent” and developing education programmes to train locals in order to meet the employment needs.

An estimated RM4.8bil will be required from 2010 to 2020 to develop elderly-friendly property developments that offer a range of medical and personal services for assisted living. Current efforts in the Iskandar region and moves by private property developers on a small scale show the beginning of an organic growth of such a sub-sector.

However, I believe government funding may not be enough. Tax incentives, policies, rules and regulations, other than grants and subsidies, coupled with a price control system may be required to encourage businesses to invest in senior living on a long-term sustainable basis.

Without fair and effective government interventions and business arrangements, aged consumers with limited financial resources will find that they cannot afford the service and the senior living opportunity will be lost.

Governance and delivery

I agree that successful implementation hinges on ownership and accountability. To ensure effective implementation, there is a need for seamless transition between planning and execution, and a good governance model will need to be established.

Only then will we be able to deliver a cost-effective solution to meet Malaysia’s future retirement and ageing needs.

Which ministry should take the ownership and accountability for aged Malaysians in terms of senior living and retirement needs? The needs and wants of elderly Malaysians is spread across several industries and business segments from property to healthcare services; from retirement funds to insurances; from human talent to education; from active ageing to community living and transportation.

Our seniors living champions have to be able to communicate with several ministries for effective implementation – housing, transport, healthcare, finances, education and human resources, family and community, sports and tourism.

Maybe we may need to appoint a special minister of Retirement and Ageing to be the champion and key driver to work hand-in-hand with the private sector to deliver the implementation results.

Seniors living is no longer a novel concept. It requires some focus from our government and business communities. We need some passion to kick-start some senior living projects in Greater KL and major cities in the country as soon as possible. Meanwhile, the clock is ticking … – Comment by CAROL YIP

Source: The Star

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