Elder Care in China | Asia Healthcare Blog

Rapidly aging demographics always make for interesting business opportunities; and in a country like China where this phenomenon is coupled to an uncertain social safety net for the elderly, business is eager to offer a palatable and profitable solution. Or at least that is the objective savvy US investors such as Robert Tanenbaum, owner of the Washington Nationals and one investor in China Senior Care (CSC), are making. CSC is not the only company pursuing the China elder care market; other early entrants include Right at Home International, who in July announced its expansion into the Beijing market and Home Instead, a franchised senior care facility with plans for its first Chinese franchise in development.

Beijing understands not only the extent of the need, but the role foreign direct investment will have to play in this area. As such, the PRC has offered incentives to foreigners who are willing to make investments in ?homes for the elderly.? In this way, Beijing is emulating the strategy is has been successful at for several decades: identify a need, attract foreign capital and solutions through the offering of lucrative investment incentives. But incentives aside, the business opportunity for elder-care in China is enormous. A late 2010 report published by the Chinese Ministry of Civil Affairs noted that the country only has ?266,200 nursing home beds, which is only 1.59% of China?s 167 million senior citizens.? While 90% of those 167 million seniors in China are taken care of by their families, Western investors are betting that the growing Chinese middle class will have similar struggles incorporating ongoing long-term care of their elderly parents as American and Europeans have.

But is that a safe bet? Venture capitalists train themselves to run towards fatal flaws, those pillars in a business model or technology?s development upon which success or failure will ride. The faster these are identified and addressed the greater the odds of success. For outsiders investing in China?s burgeoning senior care market segment, the question remains: what are the fatal flaws? It is possible some are procedural; namely, what role ? if any ? will the government play in reimbursing these facilities for care? If the role of government remains insignificant, what are the economics behind a Chinese family?s decision to keep elderly family members within their household versus establishing in a senior care facility?

While these are interesting and important questions, perhaps the most compelling fatal flaw is cultural: will placing your elderly parents in a senior care facility be perceived as a status symbol ? something only successful Chinese can afford ? or will it be seen as a betrayal of the familial duties that have long been held in high regard by Chinese culture? Among all of the potential reasons Westerners could fail in this market segment, cultural resistance could be one of the most significant. For thousands of years, the Confucian ideal of a rigid family hierarchy, tied to the responsibility of younger generations to care for their elders, have been a mainstay in China.

It begs the question of what Western businesses targeting this market segment can do to address the cultural challenges inherent in senior care for China. Yes, the societal need is enormous; but the cultural resistance to the solution-set Westerners are proposing is equally significant. It is worth keeping in mind that among the most stressful decisions American families face remains the decision about what to do with elderly parents. Given the almost diametrically opposite emphasis Western culture places on independence and familial autonomy than does Chinese culture, the question of how to make senior care acceptable in China should not be overlooked.

The most obvious answer is a play towards the status-conscious Chinese consumer: make senior care something that is exclusive. Emphasize the better medical, emotional and relational care they will have at their disposal than that which you could ever hope to provide within your own home. Be sure to build your model in a way that easily integrates the outside family into the day-to-day activities of the seniors; perhaps even make outside involvement with the family mandatory, or perceived as such by the entire family. Make it a complementary solution set as opposed to a substitutionary one. Western senior care has been successful marketing not only to the family placing their elderly parents in senior care facilities, but the seniors themselves. This is typically accomplished by emphasizing the senior?s ongoing desire to be semi-autonomous, be surrounded by peers, and have activities uniquely designed to take into account their physical and emotional needs. But will this be enough?

China has a uniquely evolved familial hierarchy that is stronger and more culturally rigid than Westerners may appreciate. Successful senior care investments are going to need to pay particular attention to how they integrate themselves into China?s traditions about family and veneration of the elderly. For readers of the Asia Health Care Blog, what sort of marketing and operational strategic tips do you have for these companies about how they can be successful in China? How can they both respect China?s traditions, while playing to the changing needs of an increasingly independent Chinese middle class?

Source: http://www.asiahealthcareblog.com/2011/08/05/elder-care-in-china/

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