Will For-profit Companies Improve the Standard of Elder Care?

Reading to an elderly staying with elder care facilities

The elderly population of the United States is set to rise significantly over the next few decades. Some estimates suggest that Medicare enrollment will increase by approximately 30 million within the next 20 years. This will put tremendous strain on the Elder Care services traditionally provided by non-profit organizations.

With a view to the future, the government decided to allow for-profit companies to provide Elder Care services in 2015. Given the size of the opportunity, it is no surprise to learn that scores of private companies are lining up to offer their newly found expertise. The U.S. undoubtedly needs more assistance in the Elder Care sector, but will for-profit companies improve the quality or care or simply line their own pockets at the expense of the elderly and their loved ones?

For-profits Trying to Keep PACE

The Program of All-Inclusive Care for the Elderly (PACE) is a relatively unknown program designed to help elderly Americans enjoy greater independence by remaining in their homes. The goal of the program is to keep senior citizens out of nursing homes for as long as possible; this allows them to continue to enjoy home comforts while Elder Care experts provide assistance.

PACE actually launched in the 1970s, but as of January 2016, there were only 40,000 enrollees across the United States. This is set to change with the introduction of for-profit companies into the Elder Care sphere.

One of the biggest movers is InnovAge, a company based in Denver, Colorado. It quickly made the switch from NPO to for-profit after the government announcement. It also received almost $200 million in funding from a multi-billion dollar private equity firm.

The Benefits of the Change

PACE is an excellent program in theory, yet relatively few people avail of it. If you ask residents of the InnovAge center in Denver, they will tell you how delighted they are to be part of the PACE program and suggest they would rather be dead than left in a nursing home.

For too many Americans, aging can be a draining experience. They can become frail and may have difficulty performing what were once everyday tasks. They may be unable to do their laundry, and may forget to pay their bills. This can be very difficult on many elderly citizens and their families.

For residents of an InnovAge day center, life appears to be much brighter. Senior citizens are able to remain in their homes where healthcare experts in the appropriate field visit. For example, someone with dementia may receive a visit from a psychiatrist while a social worker coaches a loved one on how to treat someone with the condition.

Several days a week, an InnovAge bus comes to collect senior citizens and take them to a local center where they mingle with fellow enrollees. They play bingo, chat, eat, and take part in other fun activities. These regular outings remove the issue of isolation and help seniors remain confident and relaxed.

It is hard to determine the cost of the PACE program in comparison to nursing home care, although Medicare and Medicaid do pay providers around $5,500 less per person per annum than nursing home care costs.

The Bad

Commercial companies have been providing hospice care for over 30 years. In 2014, a government report showed that for-profits in the hospice care sector were guilty of stinting on care and selectively picking their patients.

There is understandable concern that this issue will rear its ugly head when it comes to Elder Care. On one hand, for-profits must treat their patients well because the costs of hospitalization and medical treatment eat into their bottom line.

Yet, the big concern revolves around the potential involvement of the tech industry. Just one of the centers created by InnovAge will cost $12 million, and for-profit organizations may try to find ways around this huge price tag.

Tech experts in Silicon Valley have suggested the idea of virtual care. This would involve the use of sensors and video visits to the elderly in their homes. However, a number of mental health experts are against the idea and point out that socialization plays a key role in improving the health of elderly patients. So-called virtual care will do little to improve the standard of care or help seniors cope with feelings of isolation and loneliness.


There is certainly potential for improvement in Elder Care, and for-profit companies are capable of assisting. Those who use InnovAge have been full of praise for the organization. However, we do worry that the “personal touch” offered by the Denver company will be missing if commercial companies bring technology into the mix.