Why you should care about caregiving
AARP recently released a report outlining the $279 billion market opportunity in caregiving. As our population ages, 117 million people will need care assistance by 2020—though there will only be small increases in the family and paid caregiver support pool, leading to drastic shortages.l. There is a huge opportunity for first movers who can utilize technology to successfully optimize people’s time to more efficiently deliver care before this major shift takes place.
We spoke with Jeff Makowka, Director of Market Innovation at AARP, to understand the focus on caregiving in digital health and what entrepreneurs can do to capitalize on this market. As a uniquely-positioned social impact organization, AARP is able to introduce policy-makers and the marketplace to the needs of the caregiver. Although it traditionally advocates on behalf of people over the age of 50, AARP advocates for all involved parties—including caregivers—to help them deliver better care to our aging population. The following interview is edited for length.
How can we increase capacity of caregivers through technology with a growing aging population? What are the opportunities?
A few areas that are very interesting (and needed) are: care coordination apps for sharing and tracking information within care circles, technology platforms that allow people to find a caregiver, and in-home delivery models ranging from groceries to other on-demand services. To find non-family caregivers, people can now leverage technology to bring the cost down to hire an external caregiver and increase the quality of the care that’s given. One example of course is Honor, which provides on-demand caregiving services.
There are also technologies that aren’t necessarily built for the caregiver or elderly population, but could be especially applied here. Strategically, a mass market aim with customization or specialization for the caregiving elderly market has the best chance to be successful and scalable. There are also small niche problems that can be solved very elegantly—then viable markets can be created around them. For example, there’s a lot of activity in in-home delivery, but right now these are being developed for urban or suburban markets and for younger, tech savvy folks. The application of these platforms for caregivers can really impact or change their quality of life, like for example, being able to call a transportation service to help patients get to and from appointments—all without requiring a caregiver to take the day off.
What are the challenges for startups in the caregiving market?
A few things.
1. A lack of awareness. In surveys, the need to educate the consumer base about these solutions came up frequently. We will see a bell curve of adoption of consumers who proactively seek out these technologies.
2. Trust factor: An element of trust is required, but does not exist yet for most consumers. This is especially important in more specific services like longer term care within the home.
3. Business models that account for personalization: Some people want institutions to manage the whole care spectrum, some want support on just a few services like prescription refill tracking, while others want to be able to turn characteristics on or off. Even within the app, decisions like onboarding or the ongoing monthly fees vs. ad support are very nuanced. Accounting for different scenarios is difficult.
4. Customer loyalty and retention: Because of the nascent awareness about services, the pool of adopters is still limited. In these capital intensive endeavors, the cost of acquisition and operation is high, so market retention is crucial.
How do you see reimbursement for caregiving playing out in the future?
Overall, out of pocket payments will be most common for the foreseeable future, but reimbursement, legislation, and mandates could change the whole equation. Payers, like United Healthcare, and employers are starting to look at what stressors affect employees given their family situation—whether it’s caregiving of someone with a disability, or an aging parent. These stressors impact performance and aptitude, so providing better metrics and resources will lead to healthier and more productive employees. Once this has been demonstrated, insurers might start reimbursing on behalf of the caregiver and the space becomes an interesting area of opportunity.
What is AARP doing to drive this initiative/improve conditions?
Right now we are soliciting applications for our Health Innovation@50+ LivePitch in April, which is focused on on technology related to caregiving. The call for applications ends on March 4th. We’re looking for early-stage companies that are targeting the caregiver or care recipients. We will showcase these solutions and bring in a group of AARP members to meet with startup founders and vote on pitches in real time. It’s a great opportunity for companies to interact with their target population and develop insights into how they can effectively serve them. Industry people are also welcome!
We’ve also launched a program called I Heart Caregivers, which is centered around education and awareness. A lot of people don’t consider themselves caregivers since they’re helping family members, but these are the people who make up the caregiving population.
At AARP, we play a critical role in educating diverse populations about solutions that make caregiving easier and rewarding. Look out for future data and report releases from AARP!