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With demand for expensive senior care services rising rapidly, researchers are exploring ways sensors and other smart-home technologies can help health care providers and caregivers remotely monitor seniors in their own homes and at a lower cost.

Roughly 13 million Americans—mostly seniors—currently require various levels of assistance with daily living activities, according to recent research by the Bipartisan Policy Center (BPC). Demand for such assistance is expected to double in the coming years with an estimated 27 million Americans requiring long-term care (LTC) services by 2050.

Although current LTC delivery options like retirement homes and assisted living communities offer around-the-clock care, their high cost can bankrupt seniors and cause serious financial hardship for loved ones. According to a 2012 survey by MetLife, a private room in a nursing home costs an average of $248 daily, or more than $90,500 annually; a semiprivate room costs $222 daily, or more than $81,000 per year.¹ A report by Genworth Financial finds that long-term care costs have been rising at a 4.5 percent compound annual growth rate since 2008.² Given projected growth in demand, it seems unlikely that such costs will decrease any time soon.

While cost is a major factor currently driving the search for alternative elder care solutions, it is not the only one. Research shows that 90 percent of people 65 and older want to stay in their homes as long as possible. Yet many seniors are unable to do so because their homes and communities cannot accommodate their particular needs.³

Currently, there are numerous medical alert systems on the market that make it possible for seniors to call for help using small electronic communications devices typically worn as a bracelet or pendant. While these devices can be helpful in the event of a fall or a home emergency like a fire, their capabilities are limited.

To track seniors’ medical conditions and surroundings more closely, researchers are experimenting with more advanced smart sensor networks that provide remote caregivers real-time insight into the health and well-being of in-home patients. For example, research teams led by Diane Cook, Ph.D., of Washington State University and Nirmalya Roy, Ph.D., of the University of Maryland, Baltimore County, supported by a grant from the National Science Foundation (NSF), are exploring how to retrofit homes with sensor networks that monitor a resident’s behavior and activity levels.

These sensor-enabled homes use machine learning to recognize behavior patterns such as eating, sleeping, and movement, and then identify and report any signs of illness or cognitive degeneration to caretakers and physicians via the Web or mobile networks. The monitoring capabilities also alert physicians to changes in the physical and mental health of their senior patients, and allow them to intervene before adverse events occur. Finally, enabling seniors to live safely in their homes for as long as possible will likely help these individuals retain their sense of independence and self-confidence longer.4

Compared to the high cost of traditional assisted-living facilities and nursing homes, sensor-enabled smart homes are relatively inexpensive. Retrofitting a home with sensor technologies costs $2,500, on average, for hardware and installation fees, plus a modest monthly fee for monitoring and analyzing the data.5

To be sure, smart homes will not eliminate the need for nursing homes, but they may allow seniors to safely remain in their own homes longer, thus reducing the financial burden on them, their families, and the government. By some estimates, states can save an average of $9 million per day in health care costs by making it possible for just 10 percent of the elderly population to remain in their homes for an additional one to two years.6

Considerations for Stakeholders

The sensors and sensor-enabled devices that researchers hope will revolutionize LTC are part of a ubiquitous and rapidly growing technological phenomenon known as The Internet of Things (IoT). The IoT is projected to grow to 26 billion devices by 2020,7 with elder care being only one of countless sectors that stand to benefit from its expansion. Despite the considerable promise sensors hold, researchers and decision-makers must still address several challenges that could slow the widespread adoption of sensor technologies in the home:

Payment. Currently, sensors are not typically covered by private insurance plans or by Medicare.

Interoperability. As the market for sensors and smart home technologies grows, vendors will need to define and adopt technical standards.

Acceptance. For sensors to contribute to LTC solutions going forward, seniors—many of whom are already uncomfortable with the relentless automating of the world around them—will have to accept technology “invading” just about every aspect of their lives.

Given that current long-term care options like nursing homes can be just as invasive, the ability for seniors to live longer and healthier lives in the comfort of their own homes may trump the accompanying intrusiveness of the monitoring required to make it possible.

Society needs new elder care solutions that don’t contribute to rising health care costs. Sensors provide an opportunity not only to improve the quality of life for seniors, but also to reduce the total cost of quality long-term care.

—Anni Ylagan and Andre Bierzynski, consultants, Deloitte Consulting LLP, under the direction of Shrupti Shah, director, Deloitte Consulting LLP’s GovLab program.