We explore the economic challenges of traditional home care and how AI technology is emerging as a potential solution to make support more accessible. The current system puts care out of reach for 94% of seniors with costs around $30,000 annually, creating a major barrier for those who want to age in place.
• Traditional home care uses a one-to-one caregiver model that doesn't scale efficiently
• Labor costs and caregiver shortages drive up prices while limiting accessibility
• AI disrupts the one-to-one model by allowing support teams to assist many more seniors simultaneously
• Virtual caregiving technologies can handle routine monitoring while human caregivers focus on complex situations
• The future likely involves a spectrum of care options from fully AI-assisted living to hybrid models to traditional hands-on care
• Companies that succeed will focus on serving the 94% currently priced out, similar to how Uber and Amazon disrupted their industries
• This shift represents both a business opportunity and a chance to fundamentally change how we support aging in place
Episode Transcript
Welcome to the Deep Dive.
Today we're tackling a reallymajor challenge the economics of
traditional home care.
Speaker 2 (00:08):
Right and how AI is well emerging as a potential fix
.
It's quite interesting.
Speaker 1 (00:13):
It really is, because the current system, it feels
like it's under a lot of strain,doesn't it?
Speaker 2 (00:17):
Oh, absolutely, the way we've supported aging
individuals at home.
Well, it hasn't really keptpace with the economic realities
, for, you know, most people.
Speaker 1 (00:26):
Exactly, and get this traditional part time home care
, it can easily run you aboutthirty thousand dollars a year.
Speaker 2 (00:31):
Thirty thousand Wow.
Yeah, and that cost basicallyputs it out of reach for like
ninety four percent of seniors.
It's staggering.
It is, and this model, it'shigh cost, very labor intensive
and, honestly, it hasn't changedmuch in decades.
Speaker 1 (00:45):
So what's driving that cost?
You mentioned labor.
Speaker 2 (00:47):
Yeah, high labor costs are a huge factor, plus
those persistent caregivershortages we keep hearing about.
It just creates this massivebarrier to access for people who
really want to age in place.
Speaker 1 (00:56):
Okay, but here's where it gets potentially
transformative AI and thesevirtual caregiver technologies.
They're starting to enter thepicture.
Speaker 2 (01:06):
And they offer a fundamentally different approach
, one that could maybedramatically increase access.
Speaker 1 (01:12):
So our mission today really is to understand how AI
is starting to shift thatfinancial equation for home care
.
Speaker 2 (01:19):
Right.
Could it make affordablesupport a reality for, well, a
much wider group of older adults?
That's the core question.
Speaker 1 (01:26):
OK, so let's dig a bit deeper into why the
traditional model is soeconomically tricky.
It's more than just the pricetag, isn't it?
Speaker 2 (01:34):
Oh, absolutely.
It's baked into the structure,that one-on-one caregiver model.
It's valuable, no doubt, butit's incredibly resource heavy.
It just doesn't scale easily.
Speaker 1 (01:44):
And profit margins aren't great either, I imagine.
Speaker 2 (01:46):
Generally no Margins in the sector are often quite
tight and add in those caregivershortages again, they just push
costs even higher.
Speaker 1 (01:54):
So that figure you mentioned earlier only about 6%
of seniors can actually affordtraditional care.
Speaker 2 (01:59):
Yeah, that really underscores the economic
bottleneck we're talking about.
It serves a very small slice.
Speaker 1 (02:04):
Okay, so how does an AI-driven approach?
You mentioned companies likeAddisonCare.
How does that change thefundamental math here?
Speaker 2 (02:11):
Well, what's really fascinating, I think, is how it
disrupts that one-to-one model.
That's the key.
Speaker 1 (02:16):
How so.
Speaker 2 (02:17):
Instead of needing one dedicated person per client
for many tasks, you can have asingle support team using AI
tools Think remote monitoring,automated check-ins, that sort
of thing.
Speaker 1 (02:30):
Ah, so they can assist many more people at the
same time.
Speaker 2 (02:32):
Precisely, it leverages technology to
basically multiply the reach ofthat human support team.
Speaker 1 (02:39):
So it's that scalability that's the game
changer for cost.
Speaker 2 (02:42):
Exactly that's where the potential for really
significant cost reduction comesin.
Ai can handle routinemonitoring, flag potential
issues proactively.
Speaker 1 (02:52):
Freeing up the human caregivers from more complex
situations or hands-on tasks.
Speaker 2 (02:56):
You got it.
It makes the whole supportsystem potentially much more
efficient and therefore moreaffordable.
Speaker 1 (03:02):
And this isn't just about making things slightly
cheaper for the folks who couldalready afford it.
Right, this sounds bigger.
Speaker 2 (03:07):
Oh, much bigger.
The potential is opening upsupport to a huge, currently
underserved market.
Speaker 1 (03:13):
Who are we talking about there?
Speaker 2 (03:14):
We're talking about literally tens of millions of
older adults who want to stayindependent, want to stay in
their homes, but simply can'tafford the current options.
Speaker 1 (03:23):
So a more accessible, maybe AI supported model that
could be the key for them.
Speaker 2 (03:29):
It really could, helping them stay safe and
independent at home.
This is a vastly larger marketthan the traditional model
currently serves.
It's not even close market thanthe traditional model currently
serves.
It's not even close.
Speaker 1 (03:38):
It sounds like we might be moving towards a more
varied landscape of care options, then, not just one size fits
all.
Speaker 2 (03:45):
Definitely.
If you connect this to thebigger picture, you can sort of
envision a spectrum of care.
Speaker 1 (03:50):
Okay, what does that look like?
Speaker 2 (03:51):
Well, at one end you might have fully AI-assisted
independent living, offeringthat foundational safety net and
support.
Like monitoring and alertsExactly.
Then maybe you have hybridmodels blending that AI tech
with some in-person visits formore hands-on needs.
Speaker 1 (04:06):
Right.
Speaker 2 (04:06):
And, of course, traditional intensive hands-on
care will absolutely still becrucial for people with really
complex medical needs.
Speaker 1 (04:13):
So AI isn't necessarily about replacing the
human touch entirely.
Speaker 2 (04:17):
Not at all.
I don't think it's more aboutcreating more accessible
on-ramps to the care system,optimizing resources.
Speaker 1 (04:25):
Making sure that human interaction is focused
where it adds the most value.
Speaker 2 (04:29):
Precisely While AI handles the broader, perhaps
more routine, aspects of support.
That's what could make thewhole system more sustainable
and reach more people.
Speaker 1 (04:38):
This makes you wonder , then, which companies are
really going to lead in thisevolving world.
What's their strategy likely tobe?
Speaker 2 (04:46):
Well look.
The companies that are likelyto succeed, I think, are the
ones focusing squarely oncreating these scalable,
affordable models for the vastmajority.
Speaker 1 (04:54):
So not just fighting over that small high-end slice
of the market we talked about.
Speaker 2 (04:58):
Exactly.
Competing for the 6% is a toughgame.
The real opportunity is inserving the other 94%.
Speaker 1 (05:04):
It's kind of like I don't know how Uber disrupted
taxis or Amazon changed retailright.
Speaker 2 (05:09):
That's a great analogy.
They reached a much, much wideraudience by fundamentally
changing the economic modelfocusing on accessibility, on
affordability.
Speaker 1 (05:17):
So the future leaders in home care might be tech
companies, bringing that samekind of economic shift.
Speaker 2 (05:22):
It seems very likely they need to reach those
millions who are currently justpriced out of the market
entirely.
Speaker 1 (05:27):
OK, so wrapping this up, the big takeaway here seems
to be that AI offers a prettyfundamental shift in the
economics of home care.
Speaker 2 (05:36):
Yeah, a fundamental shift with the potential to
unlock much more accessible,much more affordable solutions.
Speaker 1 (05:42):
For that significantly larger population
who really want to maintaintheir independence at home.
Speaker 2 (05:47):
Precisely by tackling those core economic limits of
the old model, ai really doesopen up the possibility of
support for so many more people.
It's quite hopeful actually.
Speaker 1 (05:57):
It really is and it makes you think.
You know what are the broaderripple effects of this kind of
AI-driven support.
How might it change how we eventhink about aging and
independence?
Speaker 2 (06:08):
Good question.
Speaker 1 (06:08):
And maybe what other vital human-centric services
might be next in line for thesekinds of tech-driven
transformations.
Definitely some food forthought there.
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