3 Characteristics of the Boomer Healthcare Consumer
According to a study published by research firm Frost & Sullivan, seniors (individuals over the age of 60) are poised to become the single largest driver of global healthcare demand by 2020.
Accordingly, in the United States — where the advancing age of the post-war Baby Boom generation will push the percentage of individuals over the age of 65 past 20% by 2029 — senior care, retirement nursing care, in-home care and senior patient engagement are hot-button topics within the healthcare industry. Many providers are racing to develop additional service lines and health IT products specifically tailored to the Baby Boomers. But do those providers have a sophisticated enough understanding of the senior healthcare consumer they are likely to serve over the next few decades?
Traditional market assumptions about older patients are not likely to hold true for this wave of retirees. If healthcare providers don't develop more accurate insights into those customers now, they risk being overwhelmed, less able to provide expected care or drive patient satisfaction, or compete with other care options in the marketplace. In a cutthroat Medicare environment, that's a bad position in which to find one's organization.
So, what are some of those needed insights? Let's take a look at 3 Baby Boomers generation characteristics and see.
1. They're the most tech-savvy retiring generation yet.
Although they didn't grow up with the technologies many of them use today, Baby Boomers have rushed to learn and adopt them. That's been true of any retiring generation. Naturally, people born in 1860 didn't grow up with motorcars, but many of them owned and could drive automobiles by the time they reached retirement in the 1920s. But Boomers have been a little bit different.
Not only have Baby Boomers rushed to learn, adopt and integrate new technologies into their daily lives, they have chosen to (or, if you like, been forced by the market to) adopt more new communication technologies than any previous cohort has had to learn.
Sure, those folks born in 1860 had to adjust their communication styles to accommodate the advent of the telephone and fast travel. But a person born in 1945 has gone from telephone, to fax, to e-mail, to text, to social media. GPS, data-based location services and data scrubbing have made it harder to avoid the influence of others. Smartphones, laptops and tablets have all changed the ways that Boomers communicate with their peers — and with their providers.
They've gone from growing up in a time when most communication was verbal and reactive, to a world in which the majority of interpersonal communications have become predictive, text-based or even (with the emergence of app culture) purely pictorial.
Indeed, whereas in previous generations the elderly and sick have been at-risk of being isolated or becoming "shut-ins," the advent of these technologies make it less likely that the Boomers will follow suit. A recent Pew Research study showed that an overwhelming majority of Boomers view modern communications technologies like smartphones not as a time-sink or burden, but as a window of freedom.
Healthcare providers can likely harness that enthusiasm and improve care by developing smartphone and tablet-based engagement tools, preventative health applications and intuitive patient-to-provider communication portals.
PatientBond is one innovative answer to this opportunity. PatientBond offers a platform for communicating with Boomers (and all other patients) through automated messaging via texts, voicemail, smartphone apps and email, taking full advantage of this medium. Moreover, PatientBond leverages c2b solutions’ proprietary psychographic segmentation model to tailor all messaging according to patients’ motivations and health personalities, to increase the likelihood of success. PatientBond’s clients are realizing significant returns on their investment.
2. They're unprepared for retirement… and getting older.
Baby Boomers, fiscally speaking, have been one of the most unprepared generations in US history. Many have consumed heavily over their careers and have saved comparatively little. A 2015 study of Boomers' retirement preparedness illustrates the potential magnitude of the problem.
Of 4,123 American pre-retirees aged 55 to 64 surveyed by BlackRock, the average target for annual retirement income was $45,000. Yet those same responders indicated they had saved amounts that would provide them only an average of $9,129 a year. That's quite a shortfall.
At the same time, several factors have come together to form what could be a perfect storm of retirement uncertainty.
- The 2008 Great Recession and concurrent housing crash wiped out significant amounts of both Boomers' portfolio and real estate values.
- The Recession also triggered a wave of late-career layoffs that stifled earnings in many individuals' pinnacle career years.
- Congress has continued to borrow from Social Security, while also seeking to either cut Medicare and Medicaid costs or trim entitlements altogether.
- The job market has been difficult for Millennials, and many late Boomers are still supporting their underemployed twenty-something children.
- Generational family living arrangements common in the old days — in which grandma and grandpa live with, and are supported by, their working adult children — have made a somewhat forced comeback, but are still not as common as they were in the last century.
- Modern medicine is finding ways to keep individuals with serious chronic conditions alive longer. Boomers have longer life expectancies than did their parents, even though they are more likely to suffer from chronic conditions (more on that below).
- We face a residential senior care provider shortage. This is driving cost up and quality of care down.
In an environment in which the government and states have little appetite to assume the cost for Boomers' fiscal risks, many retirees who need care may find themselves stuck in basic care facilities that feature a poorer quality of life than they are accustomed to. Indeed, according to the Brookings Institute, "from a public policy perspective, assuring that retirees maintain 100 percent of pre-retirement living standards may be overly ambitious."
3. They're on track to be the least healthy generation of older U.S. adults to date.
One would assume that modern medicine has enabled Baby Boomers to become one of the healthiest retiring generations we have ever seen. Unfortunately, that doesn't seem to be the case.
A report released in 2015 by the University of Southern California noted that Boomers are more likely than retirees of previous generations to be obese and to suffer from life-threatening metabolic syndrome-related secondary conditions such as heart disease, diabetes and high blood pressure. Boomers are also more likely to be disabled, or at least to claim Social Security Disability Insurance income, before reaching the age of retirement.
In previously retiring cohorts, obesity was less of a factor — and those who suffered diabetes or heart disease were more likely to die earlier. Now, the average life expectancy for a 65-year-old is projected to rise to 20.1 years by 2030.
At the same time, USC's research estimated that nearly half — 47 percent — of elderly Medicare beneficiaries will be managed for obesity in 2030 (contrasted with 28 percent in 2010). Medical science and Boomers' own food and fitness habits have thus also combined to create a superstorm of chronic, serious disease.
That, in turn, has driven up projections of Medicare expenditures — by 2030, Medicare spending is expected to grow to $1.2 trillion annually (more than twice what was spent in 2010). That has spooked the federal government and private health insurance providers alike and expedited efforts to reform our national healthcare system.
The US healthcare industry needs to work diligently to adjust Boomers' expectations and outcomes now.
Baby Boomer healthcare consumers understand the problems, but many do little to change the trajectory they are on. They don't save (or are haven’t saved and are past the point of accumulating significant amounts), they continue to consume too much and they expect to be cared for at a level that provides them the same quality of life they have been accustomed to live.
That's a tall order for the industry, the government and, frankly, Generation X and the Millennials (who have their own serious financial worries) to fill. The industry thus needs to develop ways to engage and motivate Boomers to take care of themselves, before it's too late.
Can we harness IT's engagement and empowerment abilities — and Boomers' willingness to learn and adopt new tech — to motivate them? Can we change the way we approach preventative care and chronic disease management and figure out ways to enlist and encourage Boomers' participation in their own care?
Psychographic insights hold a key to motivating Boomers. Just because members of a population all belong to the same generation does not mean that all members of that group think alike or are motivated by the same things. Psychographics pertain to people’s attitudes, personalities, values and motivations, and customizing patient engagement approaches based on these insights can yield promising results.
Operationalizing psychographic insights may seem more easily said than done, but the earlier example with PatientBond shows that it is quite feasible. Another example of innovation that is beginning to use psychographic insights is EdLogics. EdLogics uses a gamification approach to incentivize positive health behaviors and improve health literacy. Gamification provides a hook for many people, and its online platform appeals to tech-savvy Boomers. As EdLogics incorporates psychographic insights and segmentation into its platform, it will continue to improve its already-impressive results.
If we don't innovate and adopt new approaches, we'll either need to figure out a way to assume staggering costs or, more likely, an entire generation of retirees could find themselves out in the proverbial cold.