Geriatric Care Management:
A Private-Pay Revenue Stream for LTC Insurers
Those selling long term care insurance to middle aged (and older) consumers are in a unique position to sell something else as well. They could sell a solution to a problem often discussed during a long term care insurance sales call: the client’s current frustrations regarding his or her own failing parents and grandparents.
A long term care insurance provider who successfully offers a solution to this problem will add profitable revenue and create a competitive advantage for itself. The solution is geriatric care management, a still-small and fairly new concept that is already serving private-pay clients across the country.
This industry appeared about 25 years ago, the result of 2 demographic shifts in the U.S.the lengthening of the average life span and the continuing trend of families to scatter across the map due to job opportunities and retirement living options.
Because aging makes independent living, health care and travel more problematic for many seniors, a few visionary nurses and social workers launched the industry in the mid-70s from their spare bedrooms and small offices. They began to provide families with expert advice and eldercare oversight, particularly for those families separated by geography.
The industry has grown but remains mom and pop. Given the enormous demographic shift represented by the baby boom, geriatric care management is poised to become a highly successful service industry of much greater size. We estimate that the current cottage industry serves only 3% of the 2.5 million qualified families who could benefit from the service. The industry lacks what it always has lacked, marketing savvy, something that major insurers have in abundance.
Similar to other professional services, care management generates attractive margins. A typical care manager spends between 4 and 10 hours per month per relationship, interacting with the senior client and his or her family, making care arrangements, monitoring the quality of the care, solving everyday problems such as transportation, home companion or home health care services, home repair, meal services, medication management, etc.
For that, a care manager charges an hourly fee comparable to a paralegal in their market. This means that care managers charge between $65 and $180 per hour. Most also charge for travel.