21 October 2016
It's wrong to assume that elderly people can't keep contributing to society and the economy. Photo: Reuters
It's wrong to assume that elderly people can't keep contributing to society and the economy. Photo: Reuters

Beyond Welfare: Rethinking elderly care in Hong Kong [Part I]

Ageing populations are a world phenomenon that any responsible government has to tackle seriously. The 2015 Population Policy Strategies and Initiatives document and the 2016 Policy Address in Hong Kong showed the government’s strong determination to address the challenges of the ageing population in the city.

To help shape action, we think questions must be asked about how far the existing welfare approach can really meet the evolving demand for elderly care. Is there an alternative, effective and innovative approach to active ageing?

Human life expectancy has more than doubled since the Industrial Revolution and is now approaching 80. There is one basic fact that most people fail to recognize when they tackle issues related to an ageing society: the growing number of people we define as elderly embraces a rapidly growing proportion of active and self-reliant citizens.

Is our contemporary concept of retirement still valid? When Bismarck introduced the first retirement scheme in the German industrial era, the average life expectancy was 63 and most jobs needed physical strength. Now most of us live longer, healthier lives, earning our living through our knowledge and social skills but society continues to treat us as if we are worn out with labor.

Well-educated seniors with ability, experience and desire to contribute are perfect candidates to work on societal improvement because of their wish to make the world better for the next generation. How can society harness silver power rather than treating the elderly as a liability?

There are three prevalent but outdated concepts about ageing population and elderly care in Hong Kong. First is that old people are a more of liability than an asset to society. This is because of the misperception of their diminishing productivity and the habit of viewing them as health care burdens rather than contributors to society.

Secondly, the needs of the elderly are simplified to the basic subsistence level. Most elderly services focus on extension of life and disregard other factors that might cause illnesses, suffering or unhappiness for the elderly.

Thirdly, a welfare approach has always been the practice in providing elderly care in Hong Kong. As a result, policies often aim at squeezing maximum output from the public welfare budget and debate focuses on what government can afford. The validity of these three traditional concepts and the thinking that flows from them needs to be challenged.

A fresh perspective can be found in Michael Porter and Mark Kramer’s ‘Shared Value Creation’ concept helpful. They recommend:

1) Re-conceiving products and services to address unmet social needs;

2) Redefining productivity in a firm’s value chain so that sustainable development of resources and minimization of externalities can be achieved; and

3) Empowering communities and fostering collaboration in the provision of products and services.

In this and two following articles we consider how these ideas could be applied to elderly services here in Hong Kong.

Re-conceive elderly needs to develop new products and services using a market-based approach

What is a vital wish of the elderly: longevity or quality of life? The answer to this question for baby boomers is clear. They want to enjoy life to the end and avoid loss of dignity at the end of their life journey.

Quality of life is defined differently from one person to another. It is basically a consumer choice.

Centrally allocated public funding in the form of elderly welfare will not suffice because it does not address the changing needs of our social demographic structure. While we recognize that it is important to ensure a safety net functioning to protect those who have no other means to take care of themselves, we also need to create different goods and services which can cater to the demands of different segments in our greying population. By satisfying demands through the market mechanism, economic growth and tax revenue can be secured.

Experience in other developed nations clearly shows that there is great and growing demand for the provision of niche elderly care services such as dedicated dementia care, elderly fitness centers, rehabilitation facilities, memory training laboratories, health maintenance clinics, and even advanced booking of funeral services for those who are open-minded enough to apprehend the ultimate life stage. Ageing populations and elderly care needs should be re-conceptualized as interrelated social issues that cannot be solved just by the government and the social sector.

The elderly population can be broadly divided into i) active; ii) fragile; and iii) dependent groups. Their needs, from food and clothing to accommodation, transport and recreation vary greatly but are not fully or widely met by available products and services. This presents huge economic opportunities.

In Japan, the variety of day care services has created a phenomenon. Some of them emphasize a kind of home-feel environment; some of them feature young staff teams providing fun and inter-generational interactions, some of them involve elderly residents in running the center to maintain their independence.

The reason for the service diversity is because of the need to compete for business, no matter whether they are for profit or non-profit. In Japan, the Long Term Care Insurance scheme allows elderly to choose their own service suppliers. In the US, major companies are capturing opportunities of the silver economy markets. Google has acquired NEST and iRobot to conduct research on the related elderly care products. Apple launched its new eHealth Kit and Wellness business.

As long as Hong Kong remains stuck with a single welfare approach in addressing the ageing population and the related elderly care needs, the expected living standard of the baby boomers, which presents a huge silver economy opportunity that can bring employment and growth, will be stifled. Our estimate is that the silver economy can generate more than half a million new jobs and contribute to GDP growth.

This is the first of a three-part series on elderly care. [Part II] [Part III]

– Contact us at [email protected]


Members of the Social Innovation and Entrepreneurship Development Fund Task Force under the Commission on Poverty

EJI Weekly Newsletter