Baby boomers are reinventing long-term care: strategic planning for the next generation of elders.

Baby boomers literally think they're going to die before they get old," says J. Walker Smith, president of the polling company Yankelovich Partners, which found in one study that boomers (Americans born between 1946 and 1964) defined "'old age' as starting three years after the average American was dead" (as per "The Boomer Files," Newsweek, November 14, 2005). In light of this extraordinary cultural belief, the strategic next steps that long-term care takes, at every entry point along its market spectrum, will either ensure or handicap its future.

The 1960s, '70s, and early '80s saw a drastic change in the provision of long-term care for elders. Care moved from private homes to institutionalized settings that became popular and necessary, as families decentralized and more women began working outside the home. As most readers are aware, these institutions were designed using the medical model of a hospital. This seemed logical and sensible, given the premise that healthcare would need to be provided in an institutional setting over time.

In the late 1980s, a new trend emerged that offered less institutionalized healthcare settings, modeled after hotels and providing hospitality-oriented services. The increasingly savvy, better educated, and more demanding consumers in this market sought fine dining and concierge services, but on the basis of being able to deal with their healthcare needs as they arose.

As we approach 2011--the 65th year for the oldest boomers--we are seeing new trends emerge yet again. As baby boomers reach their 60s, they are seeking to "reinvent" aging, along with the type of long-term care services designed to accommodate it. Because the size of this age cohort will overwhelm existing resources, it will be necessary to identify specific types of long-term care options that baby boomers actually want and require to streamline services appropriately and create necessary support systems.

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With this in mind, states began to respond proactively--for example, in Minnesota's case, by creating "Project 2030" in January 1997. Project 2030's purpose is to "analyze the impacts of the aging of Minnesota's baby boom and create momentum within all sectors to plan and prepare responses to the demographic shifts that will culminate in 2030 when the first baby boomers begin to turn 85" (as per the Minnesota Department of Human Services Web site, www.dhs.state.mn.us).

"Baby boomers are permanently changing society, and there are implications for a variety of sectors, including long-term care," says LaRhae Knatterud, director of Aging Transformation for the state's Department of Human Services. Because consumers are choosing alternatives to nursing homes (i.e., staying at home longer with services provided there, as well as assisted living and CCRCs), the market has driven nursing facilities to downsize and voluntarily close. In Minnesota, this has resulted in 10,000 fewer beds. Indeed, the state provides financial incentives in the form of add-ons to the Medicaid daily rate for every bed closed and for converting double-occupancy rooms to single-occupancy rooms, reflecting the changing dynamic of long-term care.

The Minnesota Department of Human Services' next step in its transformational process was to put significant emphasis on creating a new infrastructure for addressing future needs. Recognizing the necessity for substantive change over the next five years, its program "Transform 2010" was born. This project is a partnership involving the Minnesota Board on Aging, the Department of Health, and other state agencies. Its purpose is to identify the impact of the coming age wave of baby boomers who begin turning 65 in 2011 and to transform policies, infrastructures, and services so that Minnesota can survive such a shift in the age of its population, and even thrive.

During January 2006, 11 meetings were held around the state to hear Minnesotans' suggestions for actions that the state, local communities, and individuals might take to address the coming age wave. Topics discussed included viewing boomers as a critical human resource, society's lack of emphasis on preventing health problems and disabilities, and the need for major changes to prevent long-term care costs from overwhelming individual and public program resources. (For more information on Minnesota's initiatives, visit www.dhs.state.mn.us.)

How have Minnesota's providers responded to these long-term care initiatives? Rick E. Carter, president and CEO of Care Providers of Minnesota (a trade association representing both for-profits and not-for-profits), says that Minnesota stakeholders recognize a need for new services. Because the length of stay in nursing homes has decreased dramatically, the concept of "resident"--that is, someone living in such a facility over a long period of time--is no longer appropriate, he says. The old "nursing home business" is changing and requires a fresh look at the way in which it is providing care so that the "senior services business" can flourish.

Carter and his staff, in conjunction with the other Minnesota trade associations, are spearheading a study to empirically analyze and assess Minnesota's future bed and service needs in this area. This study, among the first in the country, will provide concrete information about quantity and type of beds and services and create an opportunity for dialogue and the development of next steps.

Both public and private sectors acknowledge that the transformation currently underway in Minnesota will require conceptual and financial involvement of both sectors and will necessitate honest dialogue and realistic decision making by everyone. The changes that are taking place in long-term care can be viewed either as challenging and disruptive or as an opportunity to develop innovative ways of thinking about long-term care and create new products and services for it. The step-by-step investigative process occurring in both the private and public sectors in Minnesota is helping to initiate needed change and build viable systems for the future.

As you assess your own organizations, consider strategic planning opportunities for positioning your business in an appealing way for the future. Ask yourself:

* What is my state doing?

* What are my trade associations doing?

* What am I doing?

Consider the following activities:

* Think long term, establishing a direction through a process spanning the next 5 to 15 years.

* Survey your current stakeholders--i.e., board members, staff, and family members--regarding the perceptions that they hold relating to their own care.

* Do homework--e.g., study and research current baby-boomer trends.

* Be creative; think outside the box.

* Be real. What is necessary and doable to create successful change that benefits your organization and its stakeholders?

* Look for opportunities rather than watching out for disaster. Work hard to identify your niche or a niche you can create, and learn how you can build market share to secure your organization's future.

Watch for the second article in this four-part series--it will address enhancing your current community in ways that will appeal to the next generation and thereby keep up with your new customers.

Claudia Blumenstock is an Executive Vice-President of Living Communities, LLC, a senior housing development company located in Rochester, New York. Living Communities offers consulting services in long-term care strategic planning and develops niche senior housing markets for the future. For further information, call [phone] or visit www.livingcomm.org. To send your comments to the author and editors, please e-mail [e-mail].