The Place for Non-Profits

While in Singapore for the Ageing Asia Investment Forum, attendees were able to spend Friday touring two different facilities providing senior care for the local population.  The one that stuck in my head the most was St. Luke’s Eldercare.  As I write this I am in Beijing, I am coming out of an interesting meeting I will be blogging about in the coming week that among other things illuminated the difficulties government and non-profits have had addressing China’s senior care needs.  Relevant to St. Luke’s Eldercare operation is that unlike Singapore, where the economy and culture are more evolved, in China, the place for non-profits is not as clear.

St. Luke’s operates its eldercare operation as a not-for-profit, in partnership with a variety of partners.  The facility we saw, one of the 11 St. Luke’s operates across Singapore, included partners from the Serangoon CCC, Bless Community Services, and Trinity Methodist Church.  The 11 facilities currently operate at 99% capacity providing day-care to seniors.  They are all divided into two spaces:  a rehabilitation area and a community area.  Overall, St. Luke’s is the biggest provider of senior day-care in Singapore.  Each of the 11 facilities is placed to serve the community within a 5-7km range.  St. Luke’s provides transportation, if needed, to and from the facility with 22 micro-vans.  They focus on those who can socialize and are ambulatory, although some 30% of their clients have dementia.  It is interesting to note that these 30% are fully integrated into the services provided by St. Luke’s; in fact, as one of the team managers pointed out, they tend to be the most ambulatory of the entire group. 

Within each of the facilities, a variety of preventative and restorative services are available.  The objective of St. Luke’s is to keep its clients within the community for as long as possible, and to keep out of the nursing homes until absolutely necessary.  Across the 11 centers, they employ 130 staff, with an average staff-to-client ratio of 1:6 (the Singapore ministry mandates 1:8).  This depends on level of care, so take that with a small grain of salt; but every facility has a minimum of 10 staff members, and most have 12.  They can and do rotate staff depending on the profile of the current clients at the various sites.  At the time of our visit, they were caring for 712 clients, of which 250 had dementia (slightly higher than their historical average of 30%).  200 require nursing care, and 495 need rehabilitative therapy.  St. Luke’s will provide some 2,700 rehab sessions monthly, with a 95% equipment utilization rate.

As of today, St. Luke’s model is not-for-profit, although it does charge for services.  Only 80 of its 712 clients receive direct government subsidization.  Standard care is $35SGD/day, including lunch, or $600/month for 5 days a week, or $400/month for 3 days a week.  Transportation is an additional $200/month based on going to the facility 5 days a week.  There can be additional fees, based on level of rehabilitative or memory care services, which can add an additional $200/month.  The standard fees include breakfast, lunch, tea, active rehabilitation services, and group outings.  Many family members (between 20-30%) will have a live-in helper come to with their elderly parents some days, which St. Luke’s encourages.  Both in an attempt to create additional revenue streams and encourage active ageing, St. Luke’s has opened its gym to younger people in the community as well as family members who may want to encourage their parents by participating in their preventative therapy.

Overall, these fees pay for 2/3 of a client’s expenses.  The other 1/3 is covered by fundraising, corporate sponsorship and philanthropy.  While only a small number of St. Luke’s clients receive direct government sponsorship, the Singapore government does provide subsidies in the form of rent control.  The director who provided our tour shared that they paid approximately $800/month for a space that would otherwise cost upwards of $20,000/month without government subsidization.  Apparently, the Singapore government’s most recent budget will add additional subsidization for programs like St. Luke’s, but the Managing Director who provided our tour was a bit cynical about this:  in his opinion, whatever additional budget monies were provided would be offset by lower subsidization of the rent.

The role of profit in healthcare is a contentious issue, as America’s most recent attempt to reform its healthcare system made clear.  If one looks at St. Luke’s, a model that uses non-profits as a vehicle for delivering senior care that is indirectly subsidized by the central government may have application both in emerging economies like China, but developed nations like the United States and Europe as well.  Yes, St. Luke’s receives subsidies; but it also charges enough to cover the majority of its operating expenses while covering its additional costs by local community involvement.  This may not work for everyone, but it does suggest one possible role for non-profits in what will need to be a multi-fronted holistic solution to the world’s senior care crisis.

Comments

  1. says

    Benjamin,

    Very interesting article. I would love to see something like that in the States as it would help those families that are juggling jobs, family activities and private time. It seems that the cost for comparable services in my area would be 3 times what they are charging in Singapore.

  2. says

    Hi,

    Just to add, one thing that will impact elderly care here in Singapore is manpower shortage. That will only get worse as we get an increased aging population.

    Thanks

  3. says

    Mike – Your are right on. Manpower issues are the biggest challenge for this industry to evolve – in Asia and frankly all around the world. Solving the problem is probably the second most interesting business opportunity as well!

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