Path Home Shows 2014 Show Archive January 2014 Show 1403 John Harned - Senior Living

John Harned - Senior Living

Value Added: John Harned, president and CEO of Epworth Villa, visits with us about preparing for our golden years.
John Harned - Senior Living

John Harned - Senior Living

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Show 1403: John Harned - Senior Living
Air Date: January 19, 2014



Rob McClendon: Well, my parents often joked that old age wasn’t for sissies, and let me tell you, it is not for the financially unprepared either. From health care to housing, growing old can get expensive. Now earlier I was able to sit down with John Harned, who is the president and CEO of Epworth Villa about preparing for our golden years. Well, John, I’ve heard it said that we are a society that believes that old age is kind of an option. And as much as we’d like to deny it, we’re all getting older, and we’re all going to face some changes in our life. And that’s what you do. I want you to talk to us a little bit about what you know when it comes to the aging and housing.

John Harned: Sure. It’s clear that we live in the midst of a longevity revolution. Individuals are living far longer than they ever have. And one of the things that they really need to begin thinking about is how do I ensure against future health care expenditures, because those expenses will eat up possibly large sums of their estates. So individuals currently look at their homes as the place that they definitely want to retire. But if you look to the MacArthur Foundation’s study of what successful aging is all about, it involves one of the general principles of being engaged in a community that involves nurturing the mind, the body, giving purpose to one’s life. And there’s a reason that over the generations we’ve looked at our homes as holding on with white knuckles. But that’s because nursing homes or poorhouses were places that people didn’t want to go. But now we look at options like continuing care retirement communities, where an individual can really flourish and live under that model of what successful aging would have -- mind, body and spirit nurtured every day -- and not have to worry about those transitions to different levels of care or that their family would have to make those decisions. So those communities are where you would have independent living cottages or independent living apartments, assisted living apartments, memory care, long-term care, all at one campus and then the opportunity to ensure against all future losses of health care expense. Many of those communities ensure that it’s home for life. So if an elder were to run out of money, no fault of their own, they could reside in that community until their last day regardless of the level of care.

Rob: Yeah, financially how does that work?

Harned: It has a two-part very easy financial equation. One is an entrance deposit. We call that a shelter-to-shelter parity. So they would sell their home, and they would use that money from the sale of their home to move in, and that’s the entrance deposit. That entrance deposit really ensures against those future health care expenses. But it’s in parity to their home value. And then they pay a monthly service package, every month thereafter, and that pays for a meal a day if they’re in independent living or three meals a day if they’re in a higher level of care. It pays for an emergency medical technician to be on staff 24/7 to be at their needs if they had a catastrophic health event. There’s an option also where they can level-load their health care expenses in that monthly service package; and regardless if they’re in independent living, assisted, memory care or long-term care, they pay a consistent amount across the full continuum with inflation, but they don’t pay for each level in large increments; it stays a consistent amount. So that’s another way one could ensure against future health care expenditures.

Rob: Do you think we have some, maybe some past prejudices about what retirement living is like?

Harned: Absolutely; there’s many conceptions that when people think of retirement or retirement communities they think of stereotypes of nursing homes, which individuals think back years and years ago where nursing homes had smells or certain attitudes towards numbers of people in one room. Those days are gone. We’re under a new process in the United States known as the quality improvement system where the state and federal government survey our nursing homes, and we’re always looking to improve the quality. So you also look to organizations if they’re nonprofits, because a nonprofit is there to reinvest any income back into its residents who are its customers, their employees and the greater community around them. So retirement communities have changed in a wholesale manner; one, because as the boomers continue to age, they’re demanding more and more services. And so what you’re seeing now is what’s known as culture change, where not only is the architecture of a nursing home changing so there’s no longer a nurses’ station or a med cart, but rather when you walk in you’re standing in a foyer of a home and you see a formal living room and a formal dining room and an eat-in kitchen and a hearth room, but you don’t see a nurses’ station and you don’t see a med cart, you see the employees dressed in civilian clothes instead of scrubs, and so they’re part of the family. But then because all of the individuals that are providing care also clean and also help prepare the meals, the ratio of employees to residents is a better ratio than a traditional model of a nursing home where you have certain departments. So I get to know a person as an individual rather than being focused on the tasks of medication, meals and baths.

Rob: I want you to give advice to someone that is thinking at this moment, “Well, that’s all and good, but I don’t need to worry about that because I’m just some old middle age guy.”

Harned: Yeah, well one of the things is whether you’re a planner or not, the aging is an ever increasing army. And by the grace of God we will all get drafted. And we don’t want to enlist. But knowing that we’re going to get drafted, there’s certain things we can prepare for. So just like when you prepare to buy your first home, you live your life in a way where you’re building savings so you can make that down payment, and so you know, as a young adult out of college you start eating ramen noodles and saving a little bit of money for that project. Well, the same goes for retirement. Not only is it retirement funds to do all those fun things of travel, etc., but possibly one of the largest expenses we will face as an individual is not just the purchase of your first home or another home, but actually future health care expenses. And so many individuals spend thousands of dollars on things that aren’t necessarily insured, like dementia. And when you look towards the possibility of that, and as the population continues to grow the inevitability of those future health care expenses, there’s ways to plan for that. One way to plan is using long-term care insurance.

Rob: Which is expensive.

Harned: Which is expensive. The younger you buy it, the cheaper it is. You pay it for a longer period of time. But that can mitigate those future expenses. Or you can look at moving into a retirement community that ensures a home for life, that if you run out of money -- no fault of your own -- you get to stay there until the end of your days. But what’s nice about that is you still remain independent. You’ve freed yourself from the gutters that need to be cleaned and, you know, the home repairs, etc. So you can actually travel still and enjoy life and lead a very purpose-driven life, volunteering in the community, being a docent at the museum or the like.

Rob: And you’ve said this word several times as we’ve visited, community. And that is very important for older people, and I guess really I should say for all of us.

Harned: Well, and if you think about the idea that in 15 years, 20 to 25 percent of the population is going to be over the age of 65. Then we can really live the general principle of subsidiary where a community takes care of its own, where we’re less dependent upon others and imagining deploying all of those seniors throughout the community as docents or volunteers, whether it’s with children and tutoring or after school or just charity projects throughout the community to, you know, enliven the culture. And this is my love and passion.

Rob: All right. John, thanks so much for visiting with us.

Harned: My pleasure.

Rob: All right. Thank you.