On a mild spring day in Shanghai, outside the Xing Bao Zhonghuan “senior living community”, an old lady rode a tricycle around the forecourt, while a group of spry elders performed tai chi exercises to a video playing on a television.
After that, there followed half an hour of “finger exercises”, plus an after-lunch lesson in how to paint a chicken, using traditional Chinese brush techniques.
There was hardly a wheelchair to be seen, and no one who looked like a nurse. This was the kind of eldercare facility many industry analysts predicted would not be popular in China, where demand was forecast to be highest for medical facilities where seniors would go to be cared for round-the-clock – not to ride tricycles.
China’s one-child policy has skewed its population toward the grey end, presenting an opportunity for the eldercare industry. By 2030, the proportion over 65 could have doubled to 18 per cent, from 9 per cent as recently as 2011, according to UN data. By mid-century, China could have nearly 500m aged over 60 – more than the population of the US.
But not every demographic crisis is a fertile opportunity, as some local and foreign investors in China’s retirement home sector have found.
Though there is a shortage of hospital beds for Chinese pensioners needing long-term care or medium-term rehabilitation, retirement homes that provide significant medical services have, unexpectedly, proved less popular than facilities where seniors live independently with little nursing.
Foreign-invested providers say they have run up against barriers, from culture to cost, that have made it hard to fill even a few hundred beds in a city the size and wealth of Shanghai, with more than 3.5m seniors.
“We have not seen the demand for assisted living that we expected,” says Mark Erickson, chief operating officer of Starcastle Senior Living, which opened the 18,000 square metre Xing Bao Zhonghuan in a northern suburb of Shanghai in 2013. Starcastle is a joint venture between Fortress Investments and China’s Fosun, which has interests in real estate and healthcare.
Michael Li of rival Cascade Healthcare, backed by Columbia Pacific and Emeritus, one of the largest senior housing companies in the US, says: “Starcastle doesn’t make sense to anybody, but it has been working.”
It has achieved a higher occupancy rate than Cascade’s recently opened, more heavily medical facility in Shanghai’s Xuhui district, which has still filled only half its 59 rooms. Cascade is now developing a senior home on the other side of Shanghai, which will look less like a nursing home.
“The overall climate is favourable, the government and society are all encouraging senior care, there are so many people who need it and people are beginning to appreciate it,” says Mr Li, who worked in senior care in the US before coming back to his native China.
Previously, in a culture heavily influenced by Confucian notions of filial piety, sending your elder to a nursing home in China was “unheard of”, says Mr Li.
“But as the society progresses, more and more people don’t have any choice but to accept reality: we have to work, we commute, we have our kids,” he adds. And with more only children marrying other only children, there are fewer young people to care for each elder.
But price is an issue: an average room in the Xuhui facility can cost Rmb10,000 ($1,600) a month or more, and as much as Rmb15,000 per month more for nursing care. Many Chinese elders, raised in times of famine and political upheaval, have led a frugal life and would rather leave behind their money than spend it.
Middle-aged children are often able and willing to pay, but Mr Li says that “some families insist we don’t tell the parents how much it costs .?.?. or they won’t stay”.
And even at levels that he admits “shock” some locals unused to the high costs of eldercare in developed societies, Cascade is not making money. “We aren’t even talking about a return yet; we are just trying to stop the losses,” he says. Beijing has encouraged private retirement home operators to fill the gap in senior care, even offering incentives to local operators. But state insurance will not pay for private care, and Chinese seniors often do not trust private healthcare.
“Some groups are offering a highly medical product .?.?. comparable with a skilled nursing facility in the US. The challenge is that you need to charge between Rmb15,000 and Rmb20,000 a month just to cover operations and Rmb25,000 to Rmb30,000 to make any money, and that is not where the market is for private pay long-term care in China,” says Chris Alberti, co-founder of Cascade.
But Zhang Fengguan, 65, is certain Xing Bao Zhonghuan is worth the money. “At first my son strongly objected because he thought it was not filial to send an elder to a place such as this. But this is just an inevitable choice for us. My son is an only child, he has a 14-year-old daughter, he is busy .?.?. the only problem is the price here is a bit high. But we have been living a hard life our entire lifetime. It think it’s reasonable now for us to have something great.”
Additional reporting by Zhang Yan
星堡老年服务(Starcastle Senior Living)首席运营官艾马克(Mark Erickson)说：“协助式生活服务的需求没有我们预想的那样高。”星堡2013年在上海北部郊区开了一个1.8万平米的养老社区——星堡中环。星堡是峰堡(Fortress)和中国复星(Fosun)合资成立的。中国复星涉足房地产和医护行业。
星堡的对手凯健国际(Cascade Healthcare)的李飞东(Michael Li)表示：“星堡在任何人看来都不合常理，但它的模式效果不错。”凯健由Columbia Pacific和美国最大养老集团之一Emeritus共同投资。