It has taken a financial crisis at Southern Cross, one of the largest operators, to bring the UK care homes sector to the front pages – which is where it should have been many years ago. At the heart of the media coverage is the alleged ‘unsustainable business model’ of Southern Cross, driven by 'unacceptable' private equity and financial engineering practices. However, perhaps of greater significance is the underlying ‘perfect storm’ affecting the care home industry, which exemplifies a number of massively signficant trends related to the UK's ageing population.
The perfect stormFirst of all, I make no apology for spelling out the components of the ‘perfect storm’ surrounding the care home sector. It is clear that for many years, some sort of ‘age myopia’ has ensured that individuals, organisations and society as a whole have been unaware, or chosen to ignore, the following realities.
• Demographics. An increasing number of people will require the services of a care home, as the UK’s population continues to age.
• Who pays? Care and nursing home care is means-tested - the state will only pay if your total assets fall below £23,000. For many individuals, this means the gradual loss of their assets to pay for care.
• How much? When the state does pay, the amount that they will pay care home operators (most of whom are in the private sector) falls below what is required to operate profitably.
• Individual responsibility. It is clear that – as with pensions – most people have failed to make sufficient provision for their old age. However, this argument assumes that (a) most people can afford to save the sums involved, and (b) that they knew it was necessary to do so.
All of this adds up to a situation where demand is increasing, while supply is not. The current mantra has been that most people prefer to stay in their own homes: however, this a little like saying that most people prefer to live forever. We do, but we can’t.
The Southern Cross crisis has increased awareness of these issues, fast. The Government has reacted too, with an independent review into the care system, led by economist, Andrew Dilnot, which is expected to lead to significant legislation later this year. As Paul Burstow, the health minister, has said: ‘Years of sticking plaster solutions have failed to fix social care’.
For social care, read pensions and healthcare.
Age myopiaThe main root cause of these problems can be termed ‘age myopia’ – the individual and collective refusal to face up to the realities of age and an ageing population. The UK suffers from it more than most countries: recent research suggested that the UK is the most ageist country in Europe. We also have the highest incidence of family break-up and the lowest level of religious belief. Add to all this a deep-rooted cultural fear of age, ageing and death and, again, you have a perfect storm.
Age Myopia is sometimes manifested as ageism or age discrimination. This is inevitable: when old age is culturally unattractive, youth will be the default option, whether we are employing a TV presenter, hiring a front-desk employee, or selecting models and actresses for advertising work. However, on a more ‘strategic’ level, age myopia means that, individually and collectively, there has been a certain amount denial and inaction regarding age, ageing and what to do about them.
It’s all rather depressing – but it’s not entirely bad news.
Seeing beyond age myopiaMany businesses have yet to adjust to the realities of the ageing population. While no conclusive research exists to prove this broad assertion, my own experience is that all too often, marketing – the GPS of business – continues to be a function carried out by the young, with the young in mind. Yet older people are also consumers and increased alignment by businesses and brands with the needs, wants and preferences of older people would be to the benefit of all involved.
The current median adult age is 45. Taking everyone above that age as being ‘older’, there is a wealth of data (see below) to demonstrate the size and value of the ‘older’ population. This is a complex and diverse group, which requires more sophisticated marketing strategies than are currently used.
Face the FactsFor the facts on the UK’s ageing population, and its implications for marketing, please ask for a copy of our research report. This draws upon more than 200 data sources and is available at no charge to suitable applicants. Further information can be found at www.rhcadvantage.co.uk/insight.
To discuss how your business could improve its alignment with the UK’s ageing population, please contact us for a discussion. Further information and contact details are at www.rhcadvantage.co.uk
