Our Take: Aging-in-Place x Home Modifications
The thesis is simple enough: the US is aging, and its 80 million+ boomers will need significant (long-term) care in the form of nursing homes, assisted living facilities, or at-home care. We think that the combination of community living costs increasing dramatically1, boomers holding greater than half of all wealth2 in America (10x richer than millennials by the way), horror stories coming from nursing homes during the pandemic, and boomers wanting to age in place3, will create massive opportunities for at-home care.
My grandparents unfortunately all passed away in the last few years and 3/4 of them needed at-home care, but my family didn’t know how to find it in the US, so they all went back to India to age-in-place. We thankfully had enough friends and family within the Indian healthcare system to navigate care coordination and find the right home health and care workers for our loved ones.
In the last few years home care, home health, and care navigation companies ranging from SaaS solutions for caretakers to remote patient monitoring (RPM) devices for nursing homes to marketplaces for home care workers and medical professionals have drawn interest from venture capital. I’m interested specifically in the ways aging Americans will renovate their homes to stay in their communities for as long as possible.
As we age, our mobility and physical strength decrease, making many aspects of a home that were once functional more challenging. Home modifications can offer a way for elderly Americans to age with dignity in their homes – these changes can be as straightforward as replacing water faucet knobs with levers and adding wheelchair ramps for accessibility, or as extensive as adding a stair lift to a home4.
While home modifications can be a bit of a dent in the pocket, with costs5 usually ranging from $3,000 to $15,000 and average national spend sitting at ~$9,500, the alternative is often moving into an assisted living facility, which is much more expensive. According to a survey6 by Genworth, a long-term-care policy provider, the average monthly cost for an assisted-living facility in 2021 was $4,500 while a private room in a nursing home cost approximately $9,000 (by the way, long term care through assisted living is not covered by traditional Medicare7.)
Medicaid covers 62% of long-term-care residents8, but to qualify, you essentially have to deplete – or “spend down”9 – your assets. It’s no surprise that people are starting to plan earlier to age-in-place; in 2023 a whopping 66%10 of homeowners carrying out renovations are now considering the special needs of aging in their bathroom remodels (big jump from 54% recorded in 2021). There may also be some financial reprieve on the horizon — seniors on Medicare who show medical necessity qualify for up to 80% coverage11 (the ones using their hospice care12 benefit don’t have to pay anything for covered equipment) and Medicare Advantage13 plans are increasingly offering support for home modifications.
Trying the process myself
To understand the state of the workflow today, I started with the Google search “home modifications for the elderly” and found some informative articles by Paying for Senior Care; they partner with different assisted living communities and agencies for in-home care. The woman I spoke to was helpful, but it was clear the organization doesn’t have relationships within home modifications and she told me to call the US Administration on Aging.
The US Administration on Aging’s Eldercare Locator is a federally funded program (through the Older Americans Act) that helps elderly citizens with a range of services like home-delivered meals, caregiver support, preventive health services, and transportation.
I called the US Administration on Aging and as an exercise told them I’m exploring home modifications for my grandmother in Atlanta. The representative initially determined if my grandmother would qualify for veteran or spouse of a veteran grants or Medicaid and then asked if a healthcare provider or geriatric care coordinator had made any recommendations.
In the call I also learned that while Medicaid offers home modifications, you have to start a year in advance to get approved and even then you usually have to pay 3-4 months out of pocket before getting reimbursed and approved. For families of elders who qualify for Medicaid, this kind of cash is often not available so they either take out loans or try to navigate the financial resources available through non-profits (like Rebuilding Together) and grants.
She then gave me a list of organizations to call in Atlanta (Atlanta Regional Empower Line, Georgia Division of Aging Services, and Seniors and Disability Link). Before sending me on my way, she told me to get answers to the following questions:
What are the requirements for my grandma to get home modifications?
Does my grandma need to complete any paperwork to qualify?
Is there a waiting list for the modifications?
What is the price? Is it free? How much will be out of pocket? Do we qualify for any aid?
Interestingly, she encouraged me to price-shop these agencies because the quotes can vary quite a bit.
I called all three agencies mentioned above multiple times over the course of a day and was met with long wait times (hours) with a promise that they’d call me back (they didn’t); by the end I was convinced there was indeed overwhelming demand for home modifications.
If I had decided to just start calling general contractors14 (GCs) and see if they’d be willing to do the home modifications I think my grandma would need (ignoring all the resources that are available online), I would need to comb through the general commercial market / yellow pages and book consultations. The representative I spoke to said that very few GCs would accept the job if they’re not already part of National Association of Home Builders’ Certified Aging-in-Place Specialist (CAPS) program because of the added administrative burden of becoming a Medicaid or Medicare provider to get paid by the managed care organizations (MCOs).
What was clear to me after being bopped from one broker to an agency to a few more agencies (who were staffed with people who truly wanted to be helpful) was that despite how many tailwinds there are here (more on that below), the consumer experience is uncomfortable and anxiety-inducing if you really do need home modifications quickly after a fall.
Call for Startups Building Here
There are a few companies already building here! Jukebox Health is a national platform for home modifications distributed through MCOs. They 1) have a network of occupational therapists that go into people's homes and diagnose the situation, 2) they put in a bid for the necessary home modifications, and 3) connect the bids to their network of general contractors or handymen. For the MCO, the value proposition is clear — home modifications for MCOs are incredibly complicated, time consuming, and they don’t have a way to validate the quality of the work. Simply put, evaluating the quality of a ramp installed in someone’s home will not be their core competency. They were recently accepted into the Centers for Medicare & Medicaid Services’ (CMS) GUIDE program for companies providing solutions for Alzheimer’s and dementia — the program is a 8-year model test that aims to support people living with dementia and their unpaid caregivers (will start July 1, 2024). This is promising because the CMS is recognizing home modifications as a long-term solution. Rosarium Health is another national marketplace connecting elders needing home modifications to vetted general contractors.
There are also a host of independent full-service solutions for home modification — SageHome does everything from sourcing and manufacturing the rails for walk-in-showers to installing them in the home for the elders. They roll up mom and pop home modification providers by geography.
I’m particularly interested in companies:
Solving the labor supply shortage as demand for aging-in-place rises steadily: Labor supply here is constraining for the home access market — there is a well-documented shortage of general contractors and the churn of home care workers is high at 64%15 (it’s a low paying and deeply unglamorous job). This could include increasing the number of general contractors who can do and efficiently bill Medicare/Medicaid for home modifications and smart solutions bettering the connection between home medical equipment (HMEs), home care / health, and home modifications.
Companies that offer a white-glove consumer experience for elders and their caregivers looking for solutions to age-in-place. This could include companies working with government agencies, nonprofits, and lenders to offer financing for home modifications and marketplaces connecting the elders, their healthcare providers, and GCs to create a seamless experience for home modifications.
If you’re building in this space, please reach out to mraina@crossbeam.vc!
https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-and-insights
https://mlaem.fs.ml.com/content/dam/ust/articles/pdf/2022-BofaA-Private-Bank-Study-of-Wealthy-Americans.pdf
https://www.freddiemac.com/research/consumer-research/20220523-majority-aging-adults-likely-age-place
https://www.payingforseniorcare.com/home-modifications/how-to-pay-for-home-mods
https://www.fixr.com/costs/aging-in-place-remodeling
https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-and-insights
https://www.ncoa.org/article/does-medicare-pay-for-assisted-living
https://kffhealthnews.org/news/article/medicaid-nursing-home-payments-care-mandate/#:~:text=Medicaid%2C%20the%20federal%2Dstate%20health,spent%20%2438.2%20billion%20that%20year.
https://www.medicaidplanningassistance.org/medicaid-long-term-care-faq/
https://www.houzz.com/magazine/2023-u-s-houzz-bathroom-trends-study-stsetivw-vs~170855596
https://www.rosariumhealth.com/blog/how-to-pay-for-accessible-home-modifications
https://www.google.com/url?q=https://www.theseniorlist.com/hospice/medicare/&sa=D&source=docs&ust=1712714997412577&usg=AOvVaw1JcDNlyUa_UthJg1nIxH7E
https://www.theseniorlist.com/medicare/medicare-advantage-vs-medigap/
https://www.abc.org/News-Media/News-Releases/abc-2024-construction-workforce-shortage-tops-half-a-million#:~:text=%E2%80%9CThere%20are%20structural%20factors%2C%20including,enter%20the%20skilled%20construction%20trades.
https://homehealthcarenews.com/2022/02/home-care-agencies-in-2021-saw-client-turnover-spike-caregiver-churn-stay-flat/