Dr. S. R. Keister : An Aging Population Faces Financial Panic


‘I, as a member of a fading generation, have a few observations about the fate of the aging citizens of the United States in this time of impending economic crises.’
By Dr. S. R. Keister
/ The Rag Blog / November 11, 2008

As one who has experienced the panorama of our nation and culture since arriving in this world in 1921 I have a few observations that, I fear, will not make the way easier for President Elect Obama, who appears to be a gentleman of intelligence and compassion. To date I have seen little energy expended in addressing this possible impending serious problem.

Since I, as a young student, heard of the disposition of the un-well, elderly in the civilizations of the arctic regions, I have given thought to the ultimate nature of things. In medieval times, and even more recently, the care of the elderly was a function of the family. In the lack of family, orders of Sisters such as the Sisters of Charity and Sisters of Mercy provided care and succor to the infirm and the elderly. However, there has been a stark change in this area since approximately 1980, or perhaps a decade or so previously.

With the advent of the amoral entrepreneur a change has occurred. We have seen the introduction of the capitalist philosophy into the “care” of the aging. We now are faced with a multiplicity of “nursing homes,” “assisted care living facilities” and “retirement homes” in excess in this once caring nation. Before beginning the critique of this hypocrisy allow me to digress a bit.

Social Security and Medicare have made dollars available to the elderly, abetted by the industrial and academic pension plans, the IRA and 401K. We have also been blessed to a limited extent by the hospice movement and the death with dignity laws in Oregon and Washington State. The flip side of the coin is the prevalent, and misunderstood, “non-profit” institution that advertises care for the elderly. Non-profit? There are bona-fide charities which are “non-profit,” i.e. Salvation Army, Red-Cross, Doctors without Borders, etc; however, there is another face to this. There is the “non-profit” institution that personifies the retirement homes, and such, that dot the landscape today.

These are basically tax-exempt institutions, sans stock holders, run by directors, and executive staffs who are salaried as per the board’s discretion, and do not show “profit” in their statements, but instead report “excess income.” Many of these are merely money making machines (MMM) that utilize the “care” of the elderly as their source of profit. The sales departments find it very fruitful, playing on the fears, lack of security, and lack of understanding of the aged. Of course we have a careful check of the old person’s financial statement!

We now face an impending crises as many of these residents have been paying their way with a now rapidly diminishing IRA, supported frequently by their children’s now rapidly diminishing IRA. Let me illustrate with an example.

The Bountiful Retirement Home (I made up the name) is one of many “homes” owned by the X-corporation and has been hereabouts for 20 years. Business has been good, as there are many oldsters with first rate stock portfolios. Let us say, as of six years ago, grandma applies for admission with a stock portfolio worth $300,000. She is accepted with alacrity and praised for her wise choice. She is “sold” an apartment of 1000 square feet with kitchenette, for $120,000. The funds are held in escrow returnable to her estate. (The fact, as of six years ago, that she loses the 6% interest on the funds, and that X-corporation is now the beneficiary is not stressed). After her death the moneys go to her estate after the apartment is resold/rerented. Of course grandma can furnish the apartment as she desires.

What else are her entitlements? Electricity and heat are provided, although, there is no emergency generator service in case of power failure, and emergency egress is lacking in a three story building, in which 50% of residents use walking aids, in case of fire.(One pays for one’s own phone, TV, and computer connections.) But there are offsetting advantages. For $3000/month one is provided with breakfast and dinner, the latter in a dining room, though no credit is given if one misses a meal when eating out with family or friends 2-4 evenings per week (estimated costs of dinners, $17). A nurse is available who will fill one’s pill box for $10, give an insulin injection for $10, or weigh one for $3. One can get minor repairs in the apartment for a fee, one can have the snow brushed of one’s car for a fee, one can get transportation in the institution-owned van for a fee. One can even have the opportunity of donating escrow moneys to add an Alzheimers Unit to the institution. Entertainment designed for kindergartners is provided. The MOM grinds on.

Now we have the current economic collapse with an estimated loss of 50% in most IRAs. The MOM shows compassion. The management raises to monthly fee by 7%, i.e. $210. The management needs the increased income to cover “rising expenses.” There is a certain problem looming; however, many of the residents are not cognizant of the fact and the mainstream media is not apparently aware of the situation. Other oldsters are terrified but do not know where to turn.

I have indicated merely one example, but there are thousands of the elderly in nursing homes, assisted care homes, etc., facing an imminent disaster. One hopes that some agency of the Obama administration will begin addressing the problem. A problem largely created by the greed of uncontrolled capitalism that has been extant since the Reagan administration and certainly of no interest to the economically neo-liberal Bush administration. Happily many of the legitimate church related housing facilities are looking at the problem and will, I am sure, be privy to its solution.

I would hope that someone, somewhere, is listening.

[S. R. Keister, a retired physician, is a regular contributor to The Rag Blog.]

The Rag Blog

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4 Responses to Dr. S. R. Keister : An Aging Population Faces Financial Panic

  1. Anonymous says:

    Dr. Keister, thank you for publishing that information. My mother lived in a “nursing home” the last 5 years of her life (died at 92+). It happened that there was an excellent one available to her near my sister. We spent her somewhat meager savings down and then sold her home to continue paying. Once all that was gone, Medicaid made up the difference when she became an “endowed bed” occupant (it was a Presbyterian facility). My husband and I have been paying for long term care insurance for 10 years, but since we both have ancestors who have lived into their 90s, we worry that our insurance will not cover the amount that we will need. You have explained perfectly the dilemma that many older retirees are concerned about.

  2. A gentleman who was an elderly anti-war activist in Austin in the 1960s used to urge all of us “kids” to pool our funds and buy land for a collective/commune of trailer houses when we were older. Wouldn’t it be nice if we’d listened?

    In-home care, not discussed by Dr. Keister, is also a damned shame. Yes, there are dedicated caretakers who work for peanuts. There are also gangs of organized thieves who worm their way into seniors’ confidence and take them for everything they can steal.

    In the former Soviet Union, in 1967, I visited two retirement homes operated by unions and run by their residents. Both were lively, clean places and both were connected to preschools, with regular interaction between the retirees and children, something that seemed beneficial to all.

  3. Anonymous says:

    Dr. Keister makes a thoughtful and very important point. I have an elderly dad and though she remains in her own home, she is terrified of the future.
    I have seen, with his friends & siblings, the extraordinary greed of these “care” facilities. Family members who’ve had the bad fortune to have to rely on these, have felt imprisoned with little hope of an alternative.
    I visited one such place, where an elderly woman was crawling on the hallway floor, wearing diapers and not much else, and no staff person in sight!
    Dr Keister is right about the “activities”- the idea of being left in a room with other elderly assembling snowmen out of colored construction paper gives me chills.
    I hope that taking a look at this “non-profit” industry and creating good solutions for elder’s needs is high on the list of things for Obama’s administration to address.

  4. Mariann says:

    One problem with nursing home care is that it is a dead-end job for caretakers, and attracts a number of people with no education, no skills, and simply no alternative, rather than people who might actually enjoy working with elders. In the nursing home where my favorite uncle lived for over 15 years, due at first to paralysis from an injury, and only later to various illnesses and age, one young female “aide” tried to hide rather than clean him up after an unscheduled b.m. (For the record, I would have done the same damn thing, and I loved the man!!!) But this girl was so stupid she “hid” in the linen closet, where she was discovered by another aide pulled off of his hallway for this Stygian duty. Surprise!

    Uncle was a terror — a big, strong, active, rough, kindly horseman, suddenly unable to walk or sit a horse. In later years, he had his electric wheelchair taken away from him more than once when he used it to intimidate staff and/or other residents, quite as effectively as if he’d been back in the saddle!

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