The Cost of Living Longer

Andee St. John is searching for an assisted-living facility near Columbia, S.C., for her 69-year-old mother, who was hospitalized recently after several falls. But finding the place with the right combination of price, amenities and services has been difficult. 

So far, Ms. St. John has consulted with a financial adviser, a geriatric social worker and an elder-law attorney as part of her research.

"It's been very eye-opening," Ms. St. John says. "You don't just pay one fee a month for assisted living. There are all these different add-ons."

A growing number of families are wrestling with the same dilemma: rising costs for long-term care and a mind-boggling array of options.

Nationwide, long-term-care costs in a number of categories have risen faster than inflation over the past year, according to research released on Tuesday by insurer MetLife's Mature Market Institute. At the same time, care providers are changing the types of services available or bundling services in new and at times confusing ways.

But there are strategies that can help. People who identify the specific services their loved ones need, haggle aggressively on price and explore alternative-care options can save money -- or at least get more care for the money they do spend, experts say.

The broad category of "long-term care" includes a variety of health and daily-living services, either in facilities or in people's homes, for people with chronic illnesses or disabilities.

Costs are rising for most kinds of care, according to the MetLife study, which surveyed nearly 6,700 long-term-care providers and is the first to analyze the ways providers have started bundling together various add-on services, such as transportation or extra meals, in their fee structures.

The average rent at assisted-living facilities, which provide help with day-to-day activities but not necessarily round-the-clock skilled-nursing care, shot up 17% to $3,486 over the past five years, according to the study. That is based on facilities offering six to nine services.

The price of a private room at a nursing home, meanwhile, rose 4% over the past year to $248 a day. And while prices for home-health aides and adult-day services didn't rise, on average, the brief respite comes after increases in recent years. Home-health-care spending by Medicare beneficiaries, for example, climbed 129% to $19 billion from 2000 to 2010, according to a March report to Congress by the Medicare Payment Advisory Commission.

With fees rising and the menu of services changing, here are some strategies families are using to stretch their long-term-care dollars further.

Paying for Care

Before exploring which kind of long-term care a family member needs, you should be clear about how you are paying for it.

Some consumers have long-term-care insurance, which covers an array of expenses. But the policies often have been money losers for insurers, and in recent years several have exited the business. The ones that remain have raised premiums, cut back on coverage for new policies or both -- meaning consumers will have to pick up more of the tab themselves. 

Most people simply reach for their checkbooks. But there are a couple of ways to ease the sting.

Married couples with some savings might want to consider buying an immediate annuity that pays benefits for a set number of years, to preserve savings for the "well" spouse while the other spouse receives care, says Gary Cotter, a certified financial planner in Sun City Center, Fla.

The benefit: Such an annuity wouldn't count against them in qualifying for assistance from Medicaid, the state and federal program that pays for health and long-term care for the poor. The catch: The well spouse has to live through the entire period the annuity is making payments. If not, the state has the first claim on any remaining payments, Mr. Cotter says.

One often-overlooked benefit is available to millions of families of wartime veterans. The Department of Veterans Affairs' aid-and-attendance benefit pays up to $2,020 a month to married veterans who qualify. Single veterans and surviving spouses might qualify for smaller payments.

Choosing the Right Care

Once the financing is settled, it is time to choose the kind of care you need. That should start, experts say, by cataloging the various daily living tasks you and your loved one can and can't perform. That will give you a sense of whether a few hours a day of personal assistance can do the job, or whether it is time to make a costlier move.

Genworth, one of the country's largest long-term-care insurers, uses five levels, ranging from independent (level one) to completely dependent on skilled-nursing care (level five).

At the second level, the older adult suffers from disease symptoms or early dementia and typically needs help shopping and paying bills, tasks a family member often can perform at no cost. At level three, people need four to five hours a day of help with activities that take place at predictable times. People at level four need considerable assistance from someone who is constantly on call.

Experts say most families wait until there is an immediate need for more care before they research and shop for it. A better approach: asking your loved one's doctors for help anticipating what you might need next. That way, you have more leverage. You can figure out in advance which assisted-living facility has vacancies and might waive a move-in fee or other charges, for example, and which one has a waiting list.

Some families turn to geriatric-care managers, typically social workers or registered nurses who charge an hourly fee. The managers can help you figure out what kind of care you need and review contracts before you sign to make sure there are no hidden charges, such as move-out fees.

Assisted Living

Of all of the various long-term-care options, assisted-living facilities are becoming the trickiest to figure out, experts say.

That's because, in the past five years, a growing number of facilities have started packaging more services together, rather than charging for them a la carte. This year, for example, 65% are providing six to nine services in their base rate, up from 59% five years ago, and 31% include 10 or more services.

The problem: People who need added services often must choose plans with a higher base rate that lumps more services together -- and end up paying for some services they don't need. The "personal-care" category -- which may or may not include dressing, bathing or other tasks -- costs an average of $504 a month, according to MetLife.

But many services have wiggle room for discounts, experts say. A good starting point, they say: move-in fees and monthly "wellness fees" that sometimes include only blood-pressure checks, which many residents can do on their own with a $30 cuff from a drugstore.

Kathleen Dempsey, a geriatric-care manager in Minneapolis, often recommends that clients buy a medication-monitoring system rather than pay for a nurse to do so, a service that costs $347 a month on average, according to MetLife. The website e-pill.com offers several different choices.

Jalaa McNeal, a 71-year-old retired physical-education teacher, moved to an assisted-living facility in Cedar Rapids, Iowa, this summer after she was diagnosed with water on the brain and had a shunt implanted. When she moved in, she needed to have her medicine administered a few times a day. But after months of therapy, she was tested by a neuropsychologist who said she can manage her medicine on her own. She canceled, saving $500 a month.

Independent Living

Some families are delaying or avoiding costly assisted-living care by moving to so-called independent-living apartments. Traditionally, most of these communities were little more than age-restricted apartment complexes. But in recent years, many have added nonmedical services such as transportation, meals and concierge desks. Families can hire their own home care separately if they need it.

One big advantage: Unlike fancier continuing-care retirement communities, independent-living facilities typically don't require lump-sum payments, says Mr. Cotter, the Florida planner.

"A lot of people prefer independent-living apartments because they can contract with a home-health provider themselves," he says. "It puts them in control of the whole thing."

Kevin Skipper, a financial adviser in Columbia, S.C., paid $2,000 a month for his mother's independent-living apartment, which included rent plus three meals a day. When he added companion care, the total cost was $2,900 a month, allowing him to delay moving her to a nearby assisted-living facility, which was charging $4,500.

Home Health Care

Many people prefer to remain at home rather than move to a facility. It can be costly, but there are ways to save. People who don't need 24-hour care can sign up for hourly services. Rates average about $20 an hour for basic services such as housekeeping and meal preparation, and $21 an hour for hands-on assistance with bathing, dressing and other activities, according to MetLife.

Families using home care on a consistent schedule, or for several hours or more every day, might be able to cut the rate by a few dollars an hour, experts say. A good starting point is Medicare's Home Healthcare Compare tool (medicare.gov/homehealthcompare), which allows you to search for local agencies and see their quality of patient care.

To get a better deal, consider hiring caregivers on your own, rather than through an agency, which usually runs about 25% more, experts say.

You might get lucky and find a caregiver through word-of-mouth from a friend also caring for elderly loved ones. Otherwise, you probably will need to place ads online or in newspapers.

Alternative Options

Other types of care often are overlooked, but can relieve family burdens and financial stress.

"Adult-day services," for example, provide health, social and therapeutic activities in a group setting for people with functional and cognitive problems. Some are free-standing; others are housed within nursing homes, assisted-living facilities or hospitals. Some offer a high level of medical care, and charge an average daily rate of $79. The services work well for patients who can sleep through the night at home, experts say.

Another option: Many assisted-living facilities offer "respite-care" programs, through which older adults who are cared for at home can check in for a weekend or longer when a family caregiver needs to leave town. It is an option that can help a family delay having to use a more expensive assisted-living facility, says Rona Loshak, a long-term-care insurance broker in Roslyn, N.Y.

Many families also can tap hospice care, generally meant for patients in the last stages of a serious illness, earlier than they might realize, and often with Medicare's backing.

Linda Fodrini-Johnson, a geriatric-care manager near San Francisco, recently moved her mother, who qualified for Medicare-backed hospice care, from a skilled-nursing facility costing more than $10,000 a month to a small residential-care facility with six private rooms -- at about half the price.

(Source: The Wall Street Journal, 10/29/12) 

Social Moms Lead the Way to Mobile

Moms More Likely to Own Smartphones, Tablets Compared to General Consumers

According to a new eMarketer report, "The Mobile-Social Mom: Speeding the Trend Toward 'Mobile First'," if you want to know who is moving over to mobile social media, look no further than mom. eMarketer estimates that as many as half of all moms with children under 18 in the household will use mobile devices to access social networks in 2012. 

Moms are on the leading edge of a behavioral shift that has marketers and social networks scrambling. They may soon become the first demographic group who will use the mobile phone or tablet more often than the computer to access social networks. 

The change is happening due to a number of factors. Moms are highly likely to own one of these mobile devices; February data from Arbitron and Edison Research found that 61% of total U.S. moms surveyed owned a smartphone in 2012, ahead of the 44% of total consumers who owned one. The percentage of moms who own a smartphone has grown enormously over the past couple of years. As recently as 2009, just 8% of moms had one, according to Arbitron. 

Tablet ownership also trends higher for moms compared to the population as a whole. Arbitron and Edison found in their February 2012 study that just over one in five U.S. moms had one, compared to one in six total consumers. 

And these mobile devices allow moms to log in more frequently: Arbitron and Edison found that 46% of U.S. social networking moms surveyed visited social networks multiple times per day in 2012, up from 37% in 2011 and 32% in 2010. Mom may not have time for long visits to social networking sites but mobile allows her to snack throughout the day, whenever she has a spare moment. 

As moms start to put mobile first for social media, they are changing the rules of the marketing game. It is not enough for companies to simply add mobile to the mix. They must consider moms' social media usage holistically and plan their marketing accordingly -- not only taking account of when and where they use social media, but also how and why. 

Businesses that take this approach not only stand a better chance of reaching moms now, but they can prepare themselves for the inevitable usage shift that other demographic groups will make.

(Source: eMarketer, 10/16/12)

The Sales Funnel...Rebooted

I read a great article by David Edelman.  David illustrates how the traditional sales funnel has been updated into something much more complex.  Basically, what used to work doesn't anymore. Sound familiar?

The sales funnel isn't dead, it’s just outdated. Today’s consumer takes a much more complex iterative path thru and beyond purchase. The classic funnel shows an ever-narrowing array of decisions and choices until purchase, when in fact the channel-surfing customer today often is expanding the set of choices and decisions after consideration. Just as importantly, treats the post-purchase process with the same level of importance as the pre-purchase journey.

It’s a pretty simple concept really but I like it because this visually highlights and isolates the most important aspects of the journey.

1. Consider: What brands/products do consumers have in mind as they contemplate a purchase?
2. Evaluate: Consumers gather information to narrow their choices.
3. Buy: Consumers decide on a brand and buy it.
4. Post-purchase: Consumers reflect on the buying experience, creating expectations/considerations that will inform a subsequent purchase
5. Advocate: Consumers tell others about the product or service they bought.

This visualization of the journey helps focus conversations on where to spend money, where the opportunities are, what sorts of people and processes you need to deliver on them, where you’re weak and your competitors strong. 

September Surge Changes Auto Forecasters' Tone

New-vehicle sales hit their fastest annual pace in more than four years in September, but the month could have been even better. After all, fleet sales were flat, fuel prices were unseasonably high and automakers laid off the incentives. 

September's seasonally adjusted annual selling rate of 14.9 million exceeded expectations by a wide margin, and the surge was driven entirely by retail gains, said Adam Jonas, Morgan Stanley's top auto analyst.

So are long-term forecasts being revisited?

The strong September -- in which sales rose 13 percent to 1,188,899 units -- has so far not prompted official forecasts to rise. But it has changed the tone of conversation among automakers and analysts, many of whom had revised 2012 forecasts downward since the first quarter.

Bill Fay, Toyota Division general manager, still expects 2012 industry sales of 14.3 million but now adds "and maybe a notch above."

R.L. Polk hasn't raised its forecast of 14.3 million this year and 15.2 million in 2013, "but we reviewed it for upward revision after August and September sales beat expectations," said Tom Libby, North American forecast manager.

TrueCar.com is still forecasting 14.4 million this year and 15.0 million next year.

Morgan Stanley's Jonas called September's 14.9 million annual selling rate "dreadful, no better than 1978." But he says the underlying strength of the market is consumers being forced to replace the aging U.S. vehicle fleet, which he says averages 11 years old with 130,000 miles on the odometer.

Fleet volume rose just 1 percent in September and retail jumped 15 percent for the seven largest automakers, which dominate sales to fleet buyers, according to theAutomotive News Data Center.

"If fleet had been as strong as retail, the September SAAR would have been 15.2 million," Jonas said.

Kurt McNeil, General Motors' U.S. sales boss, said GM pickup sales slipped because fleet volume fell in September, but the company isn't turning to incentives on them.

"We don't necessarily have the newest truck in the industry, but we still have the lowest incentive spend," he said.

Industrywide, per-vehicle incentives ranged from flat to slightly lower in September, according to TrueCar.com.

And gasoline prices, which normally decline after the summer peak driving season, remained unusually high. The mid-September average of $3.83 a gallon was only five cents off the year's highest level, the U.S. Energy Information Administration said.

That may have helped sales of fuel-efficient new cars in September, TrueCar.com analyst Jesse Toprak said, but it was a damper on trucks.

"Trucks are hurt by lingering high fuel costs," he said. "Small cars are remarkably strong, but trucks are weak."

In addition, small businesses may be spooked by the uncertainties of the upcoming presidential election and Congress' so-called Dec. 31 fiscal cliff and therefore deferring pickup purchases, Toprak said.

"Truck sales are based on prospects of business growing," he said. "Maybe the deals are not that great on trucks and so buyers are waiting. We'll probably see more incentives in the fourth quarter as is typical."

GM's McNeil believes auto sales will continue to outperform the slow recovery pace of the general economy, "which is particularly good news for GM as we walk into a cadence of new product in 2013 and 2014."

(Source: Automotive News, 10/15/12) 

Sales Tip: Rushing to Judgment

As a salesperson, you should work to focus all of your attention on your customer and his/her needs. It's all too easy to swoop in to present a solution instead of listening to your customer's complaints and the specifics of his/her situation.

In this rush to cut to the chase, you're in danger of coming across as arrogant, and your customers end up feeling their input is unimportant and unappreciated. This understandable mistake happens for two reasons:

* You want to come off as the "expert" or "hero," showing off all your knowledge by providing the solution before your customer even has a chance to finish her thought.
* You're in a hurry and don't have the time and energy to devote to your customer.

For example, let's say you're about to leave for a week's vacation when a prospective customer calls. He starts to go into a long story about his business and all the problems he's encountered in the last five years. You realize that you have heard his story -- or at least a similar one -- many times before, so you interrupt him to give your answer to his problems. You try to end the call as soon as possible so you can leave for vacation.

In this case, even though you might have given your prospect a good solution, chances are he won't feel satisfied with the conversation. He didn't have an opportunity to tell you about his business, so he feels shortchanged.

What should you have done? Next time, embrace any information your prospect gives you, whether you believe it's valuable or not. If you truly didn't have time to talk at length with this prospect, you should have requested the opportunity to call him back after you returned from vacation. Otherwise, you should have put down your briefcase, closed your office door, and listened to him for as long as he needed.

Remember, even if you hear the story all the time, it is unique and personal for each customer. Instead of interrupting your customer with your standard solution, let him have the floor and explain his problem. Only then can you proceed with the process of finding a solution for whatever ails him.

Technomic Study Provides a Snapshot of Quick-Service Restaurant Customers

What does the typical frequent quick-service restaurant (QSR) consumer look like? Recent research finds that he is Caucasian, between 25 and 34 years old, accompanied by his spouse or significant other, and likely dining in the restaurant.

So finds a demographic analysis of almost 38,000 consumers polled for Technomic Inc.'s ongoing Consumer Restaurant Brand Metrics research and analyzed for the recently released Understanding Quick-Service Restaurants and Their Customers Market Intelligence Report. 

"The quick-service restaurant segment includes some of the largest and most innovative companies in the U.S., as well as some interesting up-and-comers," says Technomic Executive Vice President Darren Tristano. "But at the same time, increasing competition means that it's more important than ever to understand what consumers value about fast food and where QSRs have opportunities to improve."

Technomic's Consumer Restaurant Brand Metrics program provides chains with a unique scorecard to benchmark performance against their peers and track results over time. The study asks consumers to rate the importance of certain attributes when deciding which QSR to visit. Based on initial survey analysis, Technomic ranked the top attribute categories.

Attribute Importance Ranking
(percentage of consumers giving a top two box rating, based on a 1-5 scale where 1 = not important and 5 = very important)

1. Food -- 91%
2. Cleanliness -- 88%
3. Service -- 86%
4. Value -- 84%
5. Beverage -- 78%
6. Atmosphere -- 61%

Leading Chains in Each Attribute
(top five, in alphabetical order)

1. Food -- Chick-fil-A, Culver's, Golden Corral, Jamba Juice, Papa Murphy's
2. Cleanliness -- Chick-fil-A, Cold Stone Creamery, Culver's, In-N-Out Burger, Papa Murphy's
3. Service -- Chick-fil-A, Culver's, In-N-Out Burger, Krispy Kreme, Papa Murphy's
4. Value -- Chick-fil-A, CiCi's Pizza, In-N-Out Burger, Krispy Kreme, Papa Murphy's
5. Beverage -- Caribou Coffee, Chick-fil-A, Jamba Juice, Old Country Buffet/HomeTown Buffet, Starbucks
6. Atmosphere -- Caribou Coffee, Chick-fil-A, Cold Stone Creamery, Culver's, Starbucks

The first in a new series of related segment-specific reports, Understanding Quick-Service Restaurants and Their Customers examines the demographic composition, behavior and attitudes of quick-service restaurant consumers. The report is powered by Technomic's Consumer Restaurant Brand Metrics program, an ongoing comprehensive study that demonstrates how consumers rate the importance of roughly 50 restaurant attributes regarding food, service, atmosphere, value, convenience, reputation and more, as well as the performance of 52 leading quick-service chains on these attributes.

Findings include:

• 82 percent of QSR consumers rate the food quality at their recent visits as good or very good.
• QSR patronage tends to peak with the 25-34 age group, then decrease with each age cohort.
• Consumers form opinions about products and services whether they have had first-hand experience or not. 66 percent of consumers feel that the average QSR is good or very good at emotional connection; and 58 percent say the same of brand image.
• Consumers give QSRs an average rating of 56 percent for advertising effectiveness, but those numbers range from a high of 69 percent who believe the top chain is good or very good to a low of just 33 percent.
• Eight out of 10 consumers say they are willing to recommend the quick-service restaurant they rated to friends and family.

Source: Technomic Inc., 10/01/12) 

Health Care Law's Impact on Businesses Varies

Companies specializing in driving down spending on health care, whether through electronic records, preventive care or consolidating services, are turning out to be the biggest winners from the 2010 health care law. 

Investors, analysts and policymakers say any business that can help health care providers cut costs or keep patients from being readmitted to the hospital soon after an in-patient visit is attracting more customers and seeing more investment.

"We must drive down the cost of, or maintain the cost of, health care," said Albert Waxman, co-founder of Psilos Group, a health care venture and growth equity fund. His firm is investing in companies specializing in controlling administrative costs for health care providers.

He has company: Investing in health services rose from $261 million in 2010 to $368 million in 2011; second-quarter 2012 investments are up $11 million from second-quarter 2011 investments, says the National Venture Capital Association.

Health care information technology spending for the second quarter hit $293 million, up from $86 million for the same period last year, according to Mercom Capital Group, a market research group that looks at health care technology. Those deals included telehealth technology, as well as mobile devices that providers carry to keep tabs on patient data.

Several businesses traditionally associated only peripherally with health care providers may also profit, because the law is forcing change in the way the medical field operates.

There are now 221 accountable-care organizations made up of hospital and physician groups, as well as insurer-based groups, according to a Leavitt Partners report issued in June. Technology, administrative and home care providers that help the ACOs save money stand to do well.

Any preventive-care organization that can help employers or insurers cut costs by lowering rates of diabetes, heart disease and respiratory issues -- such as fitness plans or smoking-cessation programs -- could also see a sudden surge in customers, says Kenneth Thorpe, who co-directs Emory University's Center on Health Outcomes and Quality.

Waxman invested in a company that uses information technology to monitor employees' health habits and to reward them when they go to annual health exams, get checked for chronic diseases and work to take care of any potential health issues.

"We're very excited about the future," said Martin Watson, CEO of SeeChange Health. "Without health reform, we figured we'd get to the $800 million mark (in earnings) by 2016. With health reform, it looks like we'll hit $1.5 billion by 2016."

SeeChange works with clients such as UnitedHealth by providing technology to cut premiums for beneficiaries who engage in healthy behaviors, tracking claims data to see which areas might need improvement, or adding cash to a health benefits account if a person stops smoking or begins a weight-loss program.

Cigna health insurance began moving toward accountable-care organizations in 2008, long before the law took affect. But Matt Manders, who heads Cigna's accountable-care initiatives, said the law has worked as an "accelerant." Cigna has 32 "collaborative accountable-care" organizations and plans to have 100 by 2014.

"It takes some time to have demonstrated results," Manders said. "But more than half (of the 32) have seen significant improvements in quality and cost reduction."

While many for-profit organizations will benefit, non-profits could do well, too. "In 2014, insurers can't profit by denying coverage anymore, so they need to keep people healthy," said Thorpe. That could mean prevention efforts, such as the YMCA's diabetes prevention program, could see an influx of cash.

Investors also see potential in accountable-care organizations, which are included in the Affordable Care Act. Private businesses have been working toward them for a few years.

ACOs gather providers, insurers and pharmacists, as well as home health care and palliative care providers, into a team. Those teams share data to avoid errors and duplication of tests and procedures.

Michael Sparer, health policy chair at Columbia University, cited Montefiore Care Management, a not-for-profit health organization in New York's Bronx, as a good example of a group that began making changes before the law started taking effect.

Henry Chung, Montefiore chief medical officer, said the group decided years ago to be paid by patient, rather than service, to cut costs. Now, it's one of 32 Medicare pilot sites.

As health care continues to change, Chung said, he sees several financial winners. In a non-fee-for-service system, primary-care physicians have an opportunity for greater reimbursement. There will be a greater need for care coordinators who keep patients well and out of the hospital. There will also be a need for palliative and home care services, and for community doctors to make sure they reach everyone in the community who might use their hospital.

"The spotlight will be on plans like ours," Chung said.

(Source: USA Today, 09/24/12)