Will you still need me? Will you still feed me? When I’m 104?

 Published in the ECCP Business Review, 2011

TO BE TREATED with dignity as they approach the sunset of their lives, and passing away in the company of persons they love are yearnings universal among retirees.

Having these wishes granted is quite another thing, however. It demands the cooperation of the young, some of whom might consider the task of caring for retirees a form of involuntary servitude. Thankfully, this variant of social Darwinism isn’t the norm in the Philippines where tradition demands elders be respected and cared for.

These opposing viewpoints, however, present the opportunity for a more compassionate but business-driven approach to managed retiree care. This enlightened model creates an advantageous outcome for the retiree; the persons or businesses directly involved in sustaining him; his home country and the Philippines.

The 1st Philippine Retirement and Healthcare Summit held April 12 at the Dusit Thani Hotel rekindled the determination among stakeholders to push the Philippines as the preferred international retirement destination. Input from the summit will result in the drawing-up of a high-level roadmap leading to a comprehensive retirement program.

Critical to this roadmap’s success, however, is a tectonic shift in the process of managing retirement programs. In this new paradigm, stakeholders will veer away from a business model where “Silver Aristocrats” are treated by some as gold mines to be exploited and instead adopt an approach that treats retirees with dignity.

The 10 speakers at the summit talked about the international retirement market; the importance of retirement villages; healthcare services and the regulatory environment affecting the retirement industry.

The summit was organized by the Retirement and Healthcare Coalition, Inc. (RHC), an organization consisting of the European Chamber of Commerce of the Philippines; the American Chamber of Commerce of the Philippines; the Korean Chamber of Commerce Philippines and the Japanese Chamber of Commerce and Industry of the Philippines.

Summit partners were the Philippine Retirement Authority (PRA) and Philippine Retirement, Inc. (PRI). PRA is a government owned and controlled corporation whose job is to attract foreign nationals and former Filipino citizens into investing, residing and retiring here.

PRI is a non-stock and non-profit company that unites under one organization all registered operators of retirement facilities, leisure and resort destinations, condominium and housing developers, hospitals, health insurance providers and other retirement service providers nationwide.

These chambers of commerce represent the major markets targeted by the Philippines’ international retirement industry. RHC aims to promote and win recognition of the Philippines’ value as a retirement haven, and as a center of excellence for medical and managed care services for retirees worldwide.

RHC: committed to seniors care

RHC is promoting the Long Stay Visitor program as a successful market entry strategy to gain credibility and trust in the Philippines. It offers services along the line of community development, lifestyle and healthcare.

Caring for retirees, most of whom are seniors in their 60s, no longer consists of consigning retirees to the tender mercies of uncaring (and probably abusive) staffs at “nursing homes.” What the RHC wants are fully integrated retirement villages responsive to the unique needs and wants of retirees and staffed by carefully trained, English-speaking Filipinos.

There is as yet no existing fully integrated retirement village in the Philippines as envisioned by the RHC, whose long-term commitment is to take care of foreign seniors.

But the model retirement village already exists: Lotuswell Resort at the small Thai city of Hua Hin, 180 km from the capital Bangkok.

The philosophy underpinning the success of Lotuswell is that seniors remain fun-loving persons who want to enjoy life in retirement. This positive force is strengthened by the homogenous nature of Lotuswell’s residents: mostly German-speaking pensioners, early retirees, couples and single persons from a similar age group.

These residents, mostly pensioners, thrive in a masterfully planned community that provides the amenities of a five star hotel; readily available medical treatment and recreational facilities specifically geared towards seniors.

Lotuswell is a retiree residential haven with spacious apartments and bungalows. There are no mansions or chalets within the 64,000 square meter complex.

Creating the ideal retirement village

ECCP Executive Vice-President Henry Schumacher told the audience of 500 persons that RHC had benchmarked a model project in Dumaguete City, capital of Negros Oriental, against Lotuswell. The result was a pleasant surprise.

“We discovered the Philippines can be competitive,” Schumacher noted.

RHC has begun the process of creating consortia to build its fully integrated retirement village ala Lotuswell and has begun investment promotion for this groundbreaking project.

RHC is looking at five promising sites for its retirement village: Dumaguete; Clark/Subic; Cebu; Tagaytay/Nasugbu and Metro Manila.

Schumacher noted that ageing populations in Europe, North America and North Asia want to improve or maintain their standard of living. Governments in these regions are faced with the twisted dilemma of exporting the old and importing the youth to remain economically viable societies.

This odd state of affairs benefits the Philippines since the country can afford to import the old from other countries while continuing to exporting its youth.

He noted that the financial crisis of 2008-2009 significantly eroded pensions and social benefits in the richer countries and dramatically drove up healthcare costs for retirees.

“There is an opportunity for the Philippines to get these retirees here but we have to get the product (retirement villages) right.”

“If we attract retirees, we have the obligation to look after them,” Schumacher said.

“It’s not a question of how much we charge them in the beginning. We should be able to keep them happy, keep them healthy and fulfill the promise of the Philippines as a retirement destination.”

He emphasized that RHC is committed to taking care of the international patient.

Schumacher identified community, lifestyle and healthcare as the three crucial pull factors that, if addressed correctly, should succeed in drawing tourists, long stay visitors, second homeowners and retirees to the Philippines,

When I’m 104

Tony Bridge, Executive Director & Chairman of BurnsBridge Sweett of Australia, described seniors as “the new teenagers” because of their lengthened life expectancies.

In Australia, for example, seniors lived to 82 years old on average in 2008 compared to 63 years old in 1928. Close to 40 percent of Japan’s population will be over 65 years old by 2050.

The same graying trend applies to the Philippines. Only four percent of the Philippines’ population were seniors 65 years old or older. This figure will more than triple to 13 percent by 2050.

This oncoming flood of gray, Bridge said, will warrant changing the title to that popular 1963 song by The Beatles from “When I’m 64” to “When I’m 104.” In effect, 104 is the new paradigm for old age.

Bridge said the Philippines has many of the key ingredients to successfully attract local and international retirees, which are taken to mean the “baby boomers” born from 1946 to 1964. Among these pluses are quality healthcare, good infrastructure, service culture and a low cost of living.

Crucial for the Philippines’ success as an international retirement destination, however, is developing a retirement and aged care model appropriate to its values and culture, while providing lifestyle attractions.

“Success is based on selecting the appropriate target market and business model based on market opportunity . . . so investments in understanding the market profile are critical,” he pointed out during his talk about market trends, drivers and outlook.

His proposed possible model for the Philippines would see the country advertise itself as “A center of excellence for baby boomer retirees.”

The integrated retirement business model created to support this claim would offer integrated retirement communities; a variety of independent retirement accommodations; acute care; community care; lifestyle interests; security and education, among others.

BurnsBridge Sweett is an independent consultancy providing property advisory and planning services; strategic advice and project management.

The Colonial model

Now is the right time for the Philippines to build retirement facilities and promote them to international markets, said Renee Fritschi, Managing Director of RPF–Hospitality Consulting in Bangkok.

The huge potential and growing demand for these facilities and the lower cost of living are huge advantages in the Philippines’ favor. Fritschi spoke about retirement village models for tomorrow’s customer.

“It is recommended to develop a multilingual community. This will be more demanding from an operational point of view, but will create advantages in regard to sales and market shifts.”

He noted that since a multilingual retirement villages will attract middle and upper income groups and retired senior military personnel, top quality design, construction and service are of high priority.

Fritschi presented what he described as a “Colonial Retirement Village” model for this ideal managed care community. The Colonial will be an integrated village with apartments in condominium-type buildings and in individual low-rise houses.

Infrastructure consisting of restaurants, a health center, common facilities, sport facilities, recreational facilities and a laundry, among others will support the needs of residents. 

“Service will be the key to success. Hence, professional resort management will be employed to create a social environment and assistance for the residents whenever needed,” Fritschi said.

He envisions the Colonial as having some 120 condos and bungalows only available for lease to retirees for 30 years. The minimum age to enter a lease agreement is 50 years old.

Fritschi’s company, RPF–Hospitality, is involved in hospitality consulting for hotels, resorts, restaurants, convention centers, spas and real estate firms.

The Indian experience

Atma Sharan, Vice-President for Ashiana Marketing Ltd in New Delhi, India, said that Indian retirement housing is part of much larger projects such as residential villages. All retirement housing is privately owned. Most are located in southern India with its more literate and richer population

Ashiana pioneered the retirement resort concept in India and in 2007 opened the country’s first retirement resort called Utsav in the town of Bhiwadi in Rajasthan province. In his presentation, “Turn Grey into Gold,” Sharan talked about the challenges facing retirement villages in India.

“The immediate growth potential is large since at present, facilities for senior living with healthcare are practically non-existent,” Sharan said.

What exists are “Old People Homes” set up and managed by government or charitable and non-profit organizations.  Healthcare for the elderly is not available as an integral service in these homes.

“There is no concept of assisted living in India,” he noted.

One reason for the difficulty in marketing retirement villages or the concept of assisted living is the perception among Indians that a retirement village is a piece of real estate and not a service provided for the benefit of senior citizens.

Because of this endemic market perception, his company is compelled to market Utsav as a real estate project. This perception limits the market for integrated retirement villages to the rich who have an idea and the means to avail of assisted living services.

“We are still confused,” Sharan admitted. “What business is it (retirement villages)? Realty? Healthcare? Hospitality?”

Despite these constraints, eight firms are building retirement housing in India. There are retirement homes in the cities of New Delhi, Pune, Bengaluru, Jaipur, Chennai and Coimbatore. This expansion, however, is being driven by a real estate growth potential and its attractive return on investment.

Actives in retirement

“What Comes After Active Retirement?” was the question posed by Dr. Mary Jean Guno, MD, Managing Director of HHC Home Health Care.

The answer is assisted living. Dr. Guno said senior citizens can move from active retirement into assisted living in retirement communities with recreational opportunities. There, they can utilize technology to prevent social isolation; take life enhancement programs and maintain functional independence through means such as exercise and environmental modification.

These communities can be active senior adult communities; continuing care retirement communities and long-term care locations such as the family home; an assisted living facility or a nursing home. Her company provides an assisted living facility.

“Assisted living (means a senior is) able to do activities of daily living alone,” she said.

Encouraging seniors to use technology is also an effective method of keeping them active. This means texting on mobile phones; making phone calls and using the Internet and its applications such as chatting, Facebook and Skype.

Technology can also help provide prompt healthcare. Telecare or telemedicine brings expert medical advice to the patient via Internet video or phone lines.

“Technology, if deployed in the right way, as a supplement to and an enabler of direct contact, can help older people maintain and develop social support networks,” Dr. Guno said.

And, of course, exercise and fitness programs are a must for a senior in assisted living. He can join life enhancement programs; pursue his own interests; join a fitness program or focus on spirituality.

Telemedicine: a lifesaver

But no matter how active a senior remains, age and its drawbacks such a more fragile physical condition will eventually catch up to the senior.

In his talk on “Ensuring Quality in Healthcare through Advances on Telemedicine,” Steven Normandin, President of AMD Global Telemedicine, Inc., said telemedicine is ideally suited for both developed and developing countries with remote communities to address many emerging healthcare problems.

Telemedicine’s current definition has been expanded to include the distribution of information and utilization of technology for the delivery of healthcare. It gives medical experts from a remote location immediate access to a patient in order to assess, diagnosis, monitor and treat him.

Video is an important method of delivering telemedicine to locations such as retirement communities, assisted care facilities and nursing homes.

“With the use of telemedicine equipment, physicians and healthcare providers can be electronically brought to the facility, often eliminating the need to transport the patient off site from the retirement community or nursing home for care,” according to Normandin.

“This lessens the risk of a fall or injury to the patient during transportation, and, avoids the expense of the transport.”

For seniors, telemedicine allows the delivery of medical care at a remote location and helps improve the quality and access to care in remote areas.

Normandin predicts that in five to 10 years from now, telemedicine will be an important way of providing healthcare to the general population since it saves money and provides quality healthcare. The aging population is also one of the key reasons for the coming boom in telemedicine. Worldwide, there is expected to be over one billion senior citizens by 2030.

Insurance portability

John Casey, President & CEO, Blue Cross Insurance, Inc., pointed out that no foreign retiree is going to come to the Philippines without healthcare insurance, hence the need for portability.

“Portability of healthcare can mean a number of things,” he said “but in essence it’s the right of continuity of a right to medical treatment and care.”

For a retiree, portability generally involves the continuity of medical treatment across national borders and the continuity of existing healthcare benefits across differing national or social healthcare systems.

The European Union’s EDPM is a good example of portable insurance with wide application. It has the highest standards of portability across borders of EU member states and is a mix of public, social and private healthcare funding methods.

In many aspects, it remains superior to the American HIPAA, which is valid only within the USA and can only be transferred from one company to another. Medicare is also not portable beyond the USA, which is bad news for the eight million Americans overseas.

EDPM and HIPAA are not portable to the Philippines so a potential retiree is faced with substantial out of pocket expenses. That’s because host countries in general aren’t enthusiastic about providing cover due to its huge cost and threats of fraud.

A solution is to form what Casey calls a “mutual benefit association for retirees” to be funded by the retirees themselves. Claims will be paid out of the pool of funds generated by the association. The association will also provide full in-patient cover (including pre-existing conditions) with sufficient but limited benefits.

In lieu of this unusual solution, retirees can take the usual route and opt to buy insurance from Philippine companies instead.

Casey described portability as a “very, very complex issue” that should be done on a bilateral basis piece-by-piece.

“The Philippines has many bilateral social security agreements for pension portability but not healthcare,” Casey said.

Welcome the Age of Ageing

According to PRA President Veredigno Atienza, the “Age of Ageing” and the “New Economic Normal” consisting of debt, deficits and deflation that are upon us should help entice retirees to the Philippines.

With 70 percent of the Philippines’ population below 40 years old, the pressure to cope with an ageing population is absent. Instead, the country’s youthful population becomes a major asset in boosting the retirement industry, he said.

A further boost is being provided by two bills that will update Executive Order No. 1037 issued in 1985 that created the Philippine Retirement Park System.

Rounding off the summit was an enlightening talk on the legal framework in the Philippines by two representatives from the law firm of Follosco Morallos & Herce.

Partner Froilyn Pagayatan and Associate Cielito May Velasquez covered a broad range of legal issues on the topic of immigration procedures and their related legal framework including common types of visas, the Dual Citizenship Law, the Special Investor Resident Visa and the Tourism Act of 2009.

New developments on the legal front include the proposal for a Medical Visa to promote medical tourism; a proposed bill called the Philippine Immigration Act of 2010 and a proposed special long stay visa.

The different open fora were moderated by Prof. Maria Cherry Lyn-Rodolfo from the University of Asia and the Pacific.