$200 Billion and a Wet Pillow

Earlier this year I was interviewed for an article that was published in the Journal of Healthcare Contracting (March/April 2007). The writers asked the question, “What is supporting the explosion of healthcare construction?” The simple answer is that most facilities are outdated. They have outlived their useful lives and they need to be replaced. According to the article, $200 billion will be spent in the next 15 years on healthcare construction.

$200 billion. Yikes. I get bored counting to 20.

The crazy thing is that it will happen. Buildings will be built, money will be spent, developers will get rich, and health care and elder housing will still suck. But that’s another blog.

Actually, health care and elder housing is getting better (ie. The Green House model of assisted living and Planetree hospitals – see Nick Jacobs at WindberCare), but we only have 30 years to really get it right and provide great service and care to the coming wave of elderly boomers. We need to get it right, now. The Green House is a good step forward, but to its detriment, it is still a campus (suburban) model. In the article above, I was interviewed to talk about Evidence-Based Design which is looking to architecture to create living and healing environments that are pleasing and stress-reducing, which has been found to promote healing and general well-being. If you read my first blog, then you know that I think the answer is right in our core communities. A Green House that as a rule, is placed in town at the center of our existing neighborhoods would be a mammoth step forward. Add a little mixed-use to that and then you really have something. Our health care model, PatinaCare, relies on our towns to enhance that healing environment. I think that permitting the elderly to remain members of their home town is a good way to promote well-being and health.

But still, that money. My mouth is getting wet.

As the saying goes, the baby boomers are the ‘pig in the python.’ That is, when you are looking at a population graph, there is a bulge where the boomers are located in time. This implies a beginning, and an end. We have just reached the time when the python is starting to bulge – the boomers are retiring, starting now. In 30 years, the elderly population will reach its crest. After that, the bulge begins to disappear. The elderly population ‘problem’ will start diminishing.

So, how do we spend $200 billion? Well, one option is to build brand new facilities in the same manner that we are now. That is, we build single-use facilities in a campus-like environment on an old farm field. This is Door Number One. We'll spend all that money to address a problem that will be over, beginning in 30 years. Similarly, we'll build independent cottages, the new best option for still active elders. According to the National Association of Home Builders, 40% of new housing is being built by baby boomers as either second homes or investment properties. The housing market is banking on the boomers, especially since some markets have begun to simmer. We are building a lot of extra houses.

What will happen when the baby boomer generation passes? I have not found the data for this yet, but my instinct suggests that each of us who follow the boomer crowd will own two, three or four homes because of overbuilding for the baby boomer population. That means that we will be abandoning many more homes, and property value may plummet across the board. Our towns will suffer. New developments will suffer, later. And we will have used a lot of new resources.

There is another door.

I have the key to Door Number Two. This door hides something a little more creative, and it gives all that money double or triple duty. If, oh imagine if, we made it a priority to place all new health care facilities and elder housing directly in our core communities. We could utilize the old buildings, the lost craftsmanship, the rich and decorative architecture that represents each town’s success and heritage. We could boost the prosperity of businesses in town. We could enliven small neighborhoods and city streets. We could make more efficient the services of home care providers and volunteer groups. We could keep our elders right in town and let them age gracefully among family, friends, and children. Today, few if any facilities permit all of this to happen.

Now I'm dreaming, and since I'm asleep and my mouth is still wet, drooling. Yes, dreaming and drooling.

According to a study completed by the Brookings Institute for the state of Pennsylvania, it was determined that developers spend a disproportionate amount of money on new suburban-type development while ignoring existing towns. This is an important point when the population of the state is taken into consideration. Many existing towns in PA have seen an economic and a population decline. When that occurs and new development takes place on the outskirts of town, the core communities suffer even further. Business and housing is being built while existing business and housing is abandoned.

In PA, where the population is aging at a rate higher than every state but Florida, the same thing is happening with health care and housing for the elderly population. Small towns are being emptied as the members of those towns age. Because the young are leaving most regions in search of high paying jobs, there is no population replacement. However, new elder care facilities are typically placed on new developments out of town. These facilities try to duplicate the amenities found in traditional towns. It is an expensive replication that has never succeeded to function the way our existing towns function. And, it takes the elderly out of their community and their comfort zone.

Imagine, $200 billion reinvested in our core communities. If we were to place new healthcare facilities in our small towns, and surround these facilities with a new housing option that ultimately supports the new facility (in the same way that graduated care currently works), we could revitalize our existing towns in a way that reduces our sprawling tendencies. Vacant lots and empty buildings could be filled and energized. Our once active communities could buzz again, this time with a new resource, and a new economic engine – health care and elderly housing. We could save some of our farm fields, just as central food supplies become more suspect and fuel prices are rising. The $200 billion would go even further because we could utilize amenities already found in town. $200 billion acting like $300 billion! Someone get me a towel!

Our growing elderly population is not a problem. Our dying towns are not a problem. They are potential resources, each relying and using the other for the benefit of all of us and our diminishing resources. So, we have a choice. We can continue to build in the same manner. Or, we can reinvest in our core communities, and create a more holistic way of life for our elders.

We have $200 billion to spend. How will we spend it?