Reverse Mortgages - Using your Home to stay at Home

I did some basic research on the reverse mortgage side of things and wanted to share with you for your continued discussions . . .

A National council on the Aging (NCOA) study released in January, 2005 shows that reverse mortgages can be used by over 13 million Americans to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer.

“The study shows that reverse mortgages have significant potential to help many seniors pay for help at home or to make home modifications. It also points to the need for strong consumer safeguards and lower transaction costs if these loans are to appeal to the millions of older Americans who could potentially benefit,” said NCOA president and CEO James Firman.

According to the study, there are some 9.8 million elder households (aged 62 and older) that are dealing with an impairment that can make it hard to live at home. In total, these households could access as much as $695 billion through reverse mortgages. For individuals, the extra cash could go a long way to help with family caregiving and other long-term care expenses. For example, a borrower aged 75 years old with a home worth $100,000 could receive a reverse mortgage loan that could pay them $500 a month for almost 12 years.

“This is an important study that, for the first time, shows that elderly homeowners, many with chronic conditions, can use reverse mortgages to pay for care at home,” said Jim Knickman, vice president for Research at the Robert Wood Johnson Foundation. “We hope that these findings will prompt new thinking into how the nation addresses the challenge of financing long-term care.”

However, there are several obstacles to their growth for this purpose. For example, the NCOA study shows that while two-thirds (67 percent) of older homeowners today have heard of a reverse mortgage, only 9 percent indicate that they are likely to use this financing option to pay for assistance at home. Many worry that they risk impoverishment, or won’t be able to leave a legacy to their children if they tap home equity. The cost of these loans, and current Medicaid policies on how reverse mortgages affect eligibility for long-term care benefits, also appear to be barriers.

Recent studies show that older Americans, including those who have serious health problems and need long-term care, want to live at home rather than in an institution. Most elders (82 percent of those age 62 and older) own their homes and 74 percent of those own them free and clear. With over $2 trillion tied up in home equity, this financial resource has the potential to dramatically increase the ability of seniors to pay for long-term care at home. Reverse mortgages can free up needed cash while enabling seniors to continue to own their home.

Of the nearly 28 million American households age 62 and older, NCOA has found that almost half (48 percent), or about 13.2 million, are good candidates for a reverse mortgage. The amount that these older households could receive from a reverse mortgage is substantial – on average $72,128. These funds can go a long way to pay for help at home and for retrofitting the home to make it safer and more comfortable. For some, they could be used to purchase long-term care insurance if they qualify. In total, an estimated $953 billion could be available from reverse mortgages for immediate long-term care needs and to promote aging in place.

For many older families, home equity is their single, biggest financial asset. Unlocking these substantial resources can help empower “house rich, cash poor” seniors by giving them additional resources to purchase the services they feel best suit their needs. The use of private funds from reverse mortgages can also strengthen community long-term care programs and reduce the burden on state Medicaid budgets.

The Baby Boomer Time Bomb

Fed Chairman Ben Bernanke warned the U.S. Congress on Thursday that failure to take action soon to deal with the budgetary strains posed by an aging U.S. population could lead to serious economic harm. Bernanke cited projections by the Congressional Budget Office that showed spending on entitlement program would reach about 15 percent of U.S. gross domestic product by 2030. read more about it here.

"One of the biggest failures of our government at all levels is we have not responded to a problem that has been staring us in the face for decades. We have waited way too long. Time is short, and the baby boomers are getting older." -U.S. Sen. Russ Feingold (D-WI)

When we look back at the first half of the 21st Century, it will not be global warming, nor rising sea levels, nor the loss of the North Atlantic drift that will be the most significant thing in our minds - it will be that we are living in a new kind of society, one with the oldest citizens that has ever existed in the history of mankind. The population over 65 will have doubled, the population over 85 will have quadrupled, instead of five working people for each retired person there will be two. We will be dealing with the fact that only 1% of the 700,000 physicians in the US are trained to work with the elderly.


As Senator Feingold explains and as we see in the Figure above, there will be great demographic changes in the coming years. Between 1995 and 2000, there were 35,320,000 individuals in the U.S. over 65 years. This figure is projected to more than double to over 77,010,000 between 2030 and 2040. During this time, the percentage of the U.S. population over 65 will grow from 12.8% to 20.7%. Even more dramatic is the growth in the oldest population group, aged 85 years and over. In 1990, there were approximately 3,060,000 individuals in this group; by 2000 the figure grew to 4,260,000. By 2050, it is estimated that this category will jump to 18,220,000 individuals (all facts U.S. Census Bureau 2004). Our target market is the largest growing demographic globally.

People are living longer and healthier lives, a mark of success in both public health and medical care. Reports indicate that Americans wish to age at home as long as possible. Residents who felt their home would meet their physical needs were more likely to remain in their current home as long as possible. In response to the preferences of older people and deficiencies in the current housing market, home modifications have been increasing in the United States. Nevertheless, a large gap exists. National data suggests that over 1 million older persons with functional limitations have an unmet need for such features as grab bars, handrails, and ramps (National Alliance for Caregiving & AARP, 2004).

So what does this mean: I believe we have to change the course of current practice to start focusing on non-medical solutions to the aging populations problems. I'll try and develop this idea a little further in the next posting.

Possible Solutions . . . The Design of Age@Home

"As we age, we face declining abilities from age related diseases and the aging process itself. Our home and network can assist or hinder our ability to complete self-care and household activities."

Dr.Mann, University of S. Florida, 2006

Seniors are living longer and staying healthier than at any point in history, yet most seniors inevitably reach a point when they need some assistance with activities of daily living, like eating, drinking and cleaning. Current evidence suggests that aging adults are receptive to services and technology to support Aging in Place as an alternative to assisted living communities. A recent study by Mann et al (2002) suggest strong consumer acceptance for home care and monitoring among frail elders. We, at my company (www.age-at-home.com) have conducted focus group studies with local seniors which support this idea and lead to the development of a three stage process to allow seniors to remain longer in their homes prior to, or possibly replacing the need for assisted living. The process consists first of modifications to the home to eliminate the most common problems in case of healthy individuals, or specifically target problem areas in the event of a crisis. Simultaneously, support services are engaged depending on the clients’ particular situation to reduce the high stress issues of aging such as resource identification and basic home maintenance. Finally, monitoring is put in place to quickly identify non-medical conditions that may cause a deterioration of the individual’s state and communication paths established to share this information with caregivers, family and friends.

Renovation - By making basic renovations to kitchens and bathrooms renovation services provide non-institutional remodeling which will support Aging-in-Place. Research has shown a low point of entry for a significant increase in safety and efficiency. Decreased difficulty were shown in getting in/out of the house, moving around the house, and bathroom activities for a home modification costing on average $5543/person (Hammel, 2006). This equates to two months cost of assisted living and demonstrates the cost effectiveness of our approach. We will offer services in two major categories: revisions to improve safety and security and a more extensive remodeling which includes complete kitchen refurbishment for approx. $36,000. Since professional modifications are often barely noticeable to visitors, homeowners can enjoy their home safely and without any institutional feel and with a moderate increase in the market value of the home.

Support - One must complement this remodeling service with social and home-aide services to support management of an individual’s personal situation, in particular, addressing areas of risk in ADLs. This program is for individuals, couples and caregivers who need or desire additional home health care services other than medical coverage. We will work with seniors and their families to create a home care program that meets all of the seniors’ daily living needs.

Prevention - To support these services we have developed proprietary expert software and integrate systems into the home for home automation and client monitoring. These systems may be installed during remodeling or purchased as stand-alone systems. Automated home features use commercially available low cost wireless sensor solutions and control home elements such as lighting and temperature. They also monitor and report variations in activities such as eating, drinking and toileting. The smart-home approach is integrated with wired security, fire prevention and guest management systems to support safety. Few people would choose to have a caregiver following their movements twenty-four hours a day, seven days a week to ensure their well being. Studies show, however, that providing this level of monitoring through technology is more acceptable and provides a high level of support for independent seniors.

Hopefully, this model will work and sell, because demographics indicates that we don't have much of an option. More on this later.

Steve

Issues with Activities of Daily Living

The third topic on the list of four critical issues we’ll discuss relates to diminishing capability to perform activities of Daily Living . Activities of daily living (ADLs), is a way to describe the functional status of a person and are typically defined as the ability to: dress, eat, ambulate (walk), do toileting and take care of their own hygiene. These are critical to the ability to live independently. Instrumental ADLs includes activities not necessary for fundamental functioning, but still very useful in a community. Cooking, shopping, housework and transport are in this category. In general, performance of IADLs is necessary for maintenance of one’s household, and thus necessary for independent living in the community. However, many areas of IADLs are generally optional in nature, and can be delegated to others. Generally though, these should be seen as rough guidelines for the assessment of a patient's ability to care for themselves.

Loss of any of these abilities increases the risk of hospitalization, increased nursing home placement and to some extent predicts higher mortality rate Carey (2004). There are multiple assessment tools that are used to measure these important concepts of functional status and independence. Regardless of the measure used, there is a steep increase with age in the proportion of person who reports ADLs and IADLs limitations. In the United States as of 1996, 44 percent of community-dwelling women and 42 percent of men age 75 years and older reported difficulty or inability to perform at least one daily activity (Kramarow et al). Among community-dwelling elders age 85 and older, approximately 55 percent of women and 42 percent of men report ADLs disability. Functional disability results from both physical and cognitive conditions. Osteoarthritis, fractures, stroke, and osteoporosis are some of the specific medical conditions that limit physical functioning. Cognitive losses associated with dementia (e.g., Alzheimer’s disease, multi-infarct dementia, and others) also limit functional ability. Cognitive and physical limitations often occur together in advanced age; thus elders are at increased risk for functional impairments as they age.

Functional disability is a key determinant of moving into an assisted living facility or nursing home. It has been reported that the average older adult living in an assisted living facility requires assistance in three IADLs and that about 50 percent of these resident have some level of cognitive impairment (Mollica, 1998). In contrast, nursing home resident have an average of 4.7 ADL limitations, and between 75 and 86 percent have cognitive impairment (Cohen and Miller, 2000). Thus, ALH resident have functional disabilities, largely in the IADL domain, that require supportive services whereas nursing home residents are substantially more impaired and more dependent in both IADL and basic ADL functioning.

In addition to functional status, there are other factors that influence transitions from independent living to assist living to nursing home. These include acute illness (such as stroke), progression of chronic diseases (both cognitive and physical), and lack of social support. Indeed, it has been stated that the difference between needing and not needing nursing home care depends on the availability of social support (Kane et al., 1999). It has been estimated that for every person over age 65 in a nursing home, there are approximately 1-3 people equally disabled living in the community (Kane et al, 1999). The people in the community, however, typically have more resources, support services, and family caregivers available to assist them. In addition, these elders may have more access to, and ability to use, the various technological means that are available to help them maintain their functioning.

Technology may play an important role in enabling older adults to live in a less-restrictive environment for as long as possible and may delay transitions into assisted living or nursing home facilities. The topic of housing and living environments for older adults has been of some interest to gerontologist over the past several decades. In 1973, Lawton and Nahemow introduced the term “person-environment fit” as an important factor in determining the well being and functioning of older adults. Person-environments fit refers to the match between individuals’ personal needs and capabilities and the available resources and demands of the living environment. Kane and Kane (2001) stressed the need for an integrated approach to meeting the needs of older adults; that is, a merging of the therapeutic (e.g., medical) and social service (e.g., rehabilitative and compensatory) models of care. Thus, technology is likely to play different roles in different living environments. It is on this note that we will proceed to discuss a proposed holistic solution to allow individuals to remain at home longer.

Caregiver Burnout

One of the other main causes of loss of independence is caregiver burnout. Most people are in fact predominantly in the hands of their spouses, daughters or daughters-in-law as caregivers. Research has shown that the most significant factor to stay out of a nursing home is simply to have 3 or more engaged daughters and / or daughters in law (Presidents Council on Bioethics, 2005). But for most of us this isn't an option and caregiver burnout is a big consideration. So what is it? Our friends at WebMD define it as:

" Caregiver burnout is a state of physical, emotional, and mental exhaustion that may be accompanied by a change in attitude -- from positive and caring to negative and unconcerned. Burnout can occur when caregivers don't get the help they need, or if they try to do more than they are able -- either physically or financially. Caregivers who are "burned out" may experience fatigue, stress, anxiety, and depression. Many caregivers also feel guilty if they spend time on themselves rather than on their ill or elderly loved ones."

So what would lead to this situation . . .

• Emergency Conditions - in many cases the role of caregiver is thrust upon an individual without any warning and without any respite - there is no time to grive a change in the state of the relationship, many times one has to shoulder new responsibilities in addition to the caregiving role like finances - it can be overwhelming
• Saturation or Lack of bandwidth - even if the role of caregiver is more gradual there might just not be enough time in the day to abosrb all the new tasks . . . women over the last 25 years have increasingly become financial breadwinners (something to be lauded) which leaves them with less time - but they still are expected, many times, to fulfill the traditional role fo caregiver
• Frustration at diminishing progress - often, the individual being cared for does not make significant progress despite the best efforts of the caregiver

Despite this over 60% of caregivers find it a positive thing in their life and willingly suffer the burden. Many don't realize they're slipping into burnout. And the most important thing in a situation like this is not the patient, but the caregiver who has to hold it all together.

So what can be done . . .

• Recognize your limits - and get some help - if not a friend or family member then ask in your religious institution - most people will willingly help - if you can't figure it out yourself then contact a local social work agency and have someone come over to help you out
  
• Get some time away from the situation every day - make sure you have time for yourself so you're not swallowed up in the situation on a daily basis (later we'll discuss home monitoring systems which can assist with this)
  
• Take advantage of respite care services - many of these services will allow you some time give you a break for a weekend, or a week
• Try and be realistic about your loved one's situation - find a group of people going through the same situation - In fact, severe cognitive, behavioural and emotional changes in the patient is reported to constitute the main risk factor for caregiver burnout - we're social beings and sharing a burden reduces it's significance - a local social work professional can find these for you if you're having difficulty
  
• Try and keep your sense of humor - laughter is after all, the best medicine

My grandmother, Nellie, lived with us for seven years before my mother realized she had burnout. Her family was unwilling to help. the situation reached a crisis and Nellie, who we dearly loved, was sent to her youngest son who really shouldn't have been looking after her as he has his own issue with alcohol.

The situation with my mother took 6 or 8 weeks to resolve her sanity and by that time we'd moved Nellie into a home where she eventually passed on. If, we'd been smart enough to recognize the signs early enough, we could have taken steps to make Nellie's final conditions a little happier for her. From first hand experience, I cannot stress enough the need to take care of the primary caregiver first.

So to some sources:

www.caregiver.org is an excellent source of information on this topic
www.alz.org is an excellent source which deals specifically with Alzheimer's
An electronic forum for caregivers of people with neurological disorders to find support from other caregivers can be found here

Keep smilin'
Steve

Falls and Fractures and how to reduce the risk

My Father, Gerry, who we will see is a bit of a character, is 75 now and had a bad fall a couple of years ago from a step ladder. Gerry is a short but heavy man - he loves his food - so he's a little unbalanced and his ankles are not as strong as they used to be. I received a phone call from my mother describing the details and the subsequent hospitalization overnight and how he was in terrible pain. I asked to talk to Dad and the first words out of his mouth were "Humpty Dumpty had a great fall". God bless him!

Our previous posting referred to one of the biggest causes of losing independence as falls in the home. Let's look at some of the details.

• More than one-third of adults ages 65 years and older fall each year (Hornbrook 1994; Hausdorff 2001).
• In 2003 more than 1.8 million seniors age 65 and older were treated in emergency departments for fall-related injuries and more than 421,000 were hospitalized (CDC 2005).
• Among people ages 75 years and older, those who fall are four to five times more likely to be admitted to a long-term care facility for a year or longer (Donald 1999).
• Among older adults, the majority of fractures are caused by falls (Bell 2000).
• In 2000, direct medical costs totaled $179 million dollars for fatal and $19.3 billion dollars for nonfatal fall injuries (Stevens 2005, in press).
• Women sustain about 80% of all hip fractures (Stevens 2000).

How can seniors reduce their risk of falling?

Through careful scientific studies, researchers have identified a number of modifiable risk factors:

• Lower body weakness (Graafmans 1996)
• Problems with walking and balance (Graafmans 1996; AGS 2001)
• Taking four or more medications or any psychoactive medications (Tinetti 1989; Ray 1990; Lord 1993; Cumming 1998).

Seniors can modify these risk factors by:

• Increasing lower body strength and improving balance through regular physical activity (Judge 1993; Lord 1993; Campbell 1999). Tai Chi is one type of exercise program that has been shown to be very effective (Wolf 1996; Li 2005).
• Asking their doctor or pharmacist to review all their medicines (both prescription and over-the-counter) to reduce side effects and interactions. It may be possible to reduce the number of medications used, particularly tranquilizers, sleeping pills, and anti-anxiety drugs (Ray 1990).

Strong studies have shown that some other important fall risk factors are visual impairments (Dolinis 1997; Ivers 1998; Lord 2001). To reduce these risks, seniors should see a health care provider regularly for chronic conditions and have an eye doctor check their vision at least once a year.

What other things may help reduce fall risk?

Because seniors spend most of their time at home, one-half to two-thirds of all falls occur in or around the home (Nevitt 1989; Wilkins 1999). Most fall injuries are caused by falls on the same level (not from falling down stairs) and from a standing height (for example, by tripping while walking) (Ellis 2001). Therefore, it makes sense to reduce home hazards and make living areas safer.

Common environmental fall hazards include tripping hazards, lack of stair railings or grab bars, slippery surfaces, unstable furniture, and poor lighting (Northridge 1995; Connell 1996; Gill 1999).

To make living areas safer, seniors should:

• Consider eliminating some elevations in the home (in some cases this may mean moving to one level)
• Consider any potential furniture or passageway issues – doors should be 36” wide if possible, hallways should be 42”
• All stairs, if used, should have easily reachable handrails which will hold your weight, possibly on both sides of stairways
• Remove tripping hazards such as throw rugs and clutter in walkways
• Use non-slip mats in the bathtub and on shower floors
• Have grab bars put in next to the toilet and in the tub or shower
• Consider replacing your tub with the high step in with a walk in shower
• Have handrails put into any area where elevations change (especially externally)
• Improve lighting throughout the home.

These preventive actions can be complemented with some assistive technologies such as:

• Personal Emergency Pendants
• Home Fall Monitoring Systems
• Consider automating lighting so that you will always have light when you move around
  

Any good contractor can provide the hardware solutions described above and we are willing to share our expertise at Age@Home. These preventive actions should form one of the critical components in any home renovation you consider. However, contact any supplier of grab bars and they'll be able to recommend an installation source locally – make sure they know you don’t want it to look like an institution. If it’s a fairly significant renovation – consider asking them to hire a trained Occupational Therapist to help in the design.

Primary Causes to have to move into Assisted Living

I saw a recent video on Google with the following statistics from the Smart Silvers Alliance http://www.smartsilvers.com/ regarding the primary causes of individuals having to move into assisted living communities:

1. 33% occurred because seniors were not taking medication correctly
2. 30% occurred because of falls - in fact, the average is one fall per year for individuals over 65 years of age
3. 30% unable to complete all activities of daily living (separate research I've read suggests that normally the loss of a single activity is enough to push one over the edge - often this is as simple as toileting).
4. 30% occurred because of caregiver burnout

The numbers don't add up to 100%, I know, so it's usually a combination of factors and like life it's complicated. I was shocked by item number 4 - this isn't a reason someone should lose independence - and it's costly: it's about $5500 per month on average for an assisted living center. So, I'm trying to do something about these causes . . . we're starting a company locally to provide lower cost support services and use relatively simple technology and support services packaged simply to see if people will buy into a little bit of prevention.