October 27, 2004
Will Cruise Ships Become Old Age Nursing Homes?

Markets can take rather unexpected turns. The cruise ship market could grow by leaps and bounds if millions of retirees move permanently onto ships.

Living on a cruise ship is a feasible and cost-effective option to assisted living facilities, and the services offered on a cruise ship parallel — even surpass — what is provided in senior care facilities, according to a study in the November issue of the Journal of the American Geriatric Society.

“Offering many amenities, such as three meals a day with escorts to meals, physicians on site and housekeeping/laundry services, cruise ship could be considered a floating assisted living facility,” said Lee Lindquist, M.D., instructor of medicine at Northwestern University Feinberg School of Medicine.

“Seniors who enjoy travel, have good or excellent cognitive function and require some assistance with activities of daily living are the ideal candidates for cruise ship care,” Lindquist said.

Lindquist, who is also an attending physician in the divisions of geriatric and general internal medicine at Northwestern Memorial Hospital, compared costs over a 20-year life expectancy after moving to assisted living facilities, nursing homes and a cruise ship, including costs of treating acute illness, Medicare reimbursement and other factors.

She found that the net costs of cruise ship living were only about $2,000 higher ($230,000 vs. $228,000) than those associated with the assisted living facilities but resulted in higher quality over the 20-year period.

Lindquist’s plan would include integration with regular passengers, with seniors selecting a cabin to inhabit as home during their prolonged cruise, whereas other passengers would disembark as usual.

I picture David Brin's Earth novel with all the old folks wearing video cameras tied to the net. They'd get off the ships and all the locals would complain that every time an old folks' ship docks there's just no privacy in town.

I do not understand the cost totals. The per year costs for nursing homes run into the 6 figures. Perhaps the numbers above are average per year?

One might expect a bigger price gap. But think about how the competitive environment differs for cruise ships versus nursing homes. Most nursing homes do not compete in a national market, let alone an international market. Whereas each cruise ship probably faces many more competitors than do nursing homes. Also, because most cruise ship passengers do not stay on board very long and return business is important the cruise ships have to be appealing to a much larger number of people to keep each cabin filled and the cruise ships need to satisfy each of them to get them to come back.

Is there any way to extend on this idea to make medical care provision more competitive? Imagine surgery ships that ply a long coast all competing to provide the cheapest, safest, most comfortable, and effective hip replacements or knee replacements or plastic surgeries. No need to travel to Beverly Hills to get the best. If it is elective surgery you seek then you could just wait for the ship to dock that you believe has the best combination of reputation, service, and cost.

Update: Here is some comparative yearly data from The Economist:

A year in an “assisted-living facility” costs Americans, on average, around $28,500 a year. In large cities such as Chicago, costs are even higher, topping $40,000. Living in a dedicated cabin aboard the Royal Caribbean's Majesty of the Seas, on the other hand, rings in at a rather competitive $33,260 a year.

Update II: In the comments below Ted argues quite plausibly that the costs of the dedicated cabin on the ship come in at a low price point because people on the ship are pretty healthy. Make them all sick enough to require assisted living help and suddenly costs would balloon. Perhaps so. Though I wonder what the labor costs are on a ship. Do they use foreigners who make less than US minimum wages?

Share |      Randall Parker, 2004 October 27 10:16 PM  Aging Population Problems


Comments
Patrick said at October 28, 2004 12:27 AM:

Possible reasons for lower than expected costs on Cruise ships:
1. Wages. Wages are a big slab of the costs for managed care homes, and even though they tend to be low paid jobs in somewhere like the USA or Europe, on a cruise ship they don't need to pay 1st world pay rates at all, because it is a Bahama based ship (or somewhere).
2. A lot of young people are keen to work on a cruise ship, not so much a nursing home.
3. A lot of the facilities will be subsidised by the younger passengers who pay higher rates for short tours.

Now let's look at the REAL advantage, if Gran and Pop retire to a perpetual cruise ship lifestyle, why on Earth would they keep paying income tax on their retirement fund earnings? They aren't living in whatever country they came from anymore, so they'll sign up as a citizen of the Cayman islands and pay 5% or whatever. For someone with a few million salted away this will make a real difference in their income, and the lack of death duties should keep the kids happy too.

Patri Friedman said at October 28, 2004 1:35 AM:

Wow, this is a great business idea for my Seastead book, thanks!

Patrick - not if they are a citizen of the US. The US claims the right to tax your income for 10 years after you renounce your citizenship if you left for tax purposes. And a net worth over $500K is considered automatic evidence that you left for tax purposes. Uncle Sam is greedy.

Ryan said at October 28, 2004 8:58 AM:

I am pretty dumb, but are high quality doctors and surgeons going to want to live on a ship (even for large salary increases)? Why would medicare/medicaid give money to "offshore" surgery?

Fly said at October 28, 2004 9:57 AM:

How many seniors requiring nursing assistance take cruises? The senior “cruise” population may be self selected for better health and lower nursing costs.

With that caveat, I do believe this is a real business opportunity.

I’ve known people who use mobile homes in a similar fashion, staying for a season in a campground with facilities for seniors. They form friendship groups with other seniors following the same lifestyle.

Brock said at October 28, 2004 10:42 AM:

Eh, I can see this being a sub-culture among the wealthy & healthy, but no more. The aging of the world's population means that the number of elder-care facilities will increase, increasing competition. Living on a boat will never be cheaper (or safer) than living on land. The physical infrastructure & human capital costs are just too high. Ryan's point about being to attract a larger number of high-quality healthcare providers to live on a ship is also well articulated. You aren't going to be able to do it.

Short Answer: Small, discrete economic units (cruise ships, islands) are just never going to be efficient as large, diverse economies.

As for cheap, high-quality care, don't forget the medical outsourcing to India & Thailand. That will take off like a rocket-ship, and also sweep the rug out from the "wandering Medical Cruiseliner" idea. That particular mountain will not come to Muhammed.

p said at October 31, 2004 11:12 AM:

Not a bet worth taking ... if this story has any merit it's that lower cost areas of the world like Mexico will become destinations of choice. The social secuity benefit goes a lot further in a 3rd world country.

Patrick said at November 1, 2004 12:33 AM:

Since my first comment I've discussed death duties and taxes with a man approaching retirement. His statement was "Argentina or Brazil. Those socialist bludgers [ie. the government he was leaving] aren't getting my hard earned cash to spend on their drugs and sex!"

Mention was also made of various schemes whereby money can be transferred overseas quite easily without the tax department being able to stop it, at least if you aren't going to be around to answer any questions.

He had NO interest in moving to a ship.

Curiously he has provided medical services to shipping companies for many years. 95% of the time this consists of getting up at 3 am for a helicopter ride out to a cargo carrier to attend some sailor. But this did mean that he was the first guy the company thought of when they needed someone to spend 3 months on a luxury liner touring the South pacific. It was good apparently, but 3 months was enough.

charles said at November 8, 2004 12:45 PM:

The amount quoted of about $90/day per person is what cruise lines charge for EACH of two people in a cabin. On this ship a standard cabin measures about 125 sq ft - including the bathroom.

The study is flawed - either
(1) they did not remember to tell readers that they have to share with another person and will have only about 50 sq ft each excluding bathroom, or
(2)they omitted to calculate that the fare has to be double that amount to have a 10 x 10 space of one's own

wayne hensrud said at November 13, 2004 10:56 AM:

november 13, 2004
greetings:
heard this idea on national public radio.....
could you please mail me any printed material for several persons in seattle that are interested.
some have taken trips to alaska and bremerton, wa
any help would be greatly appreciated. sincerely,

wayne hensrud
1212 queenannehill #605
seattle, wa 98109 usa 10:53am

Ted said at November 18, 2004 5:24 PM:

The price is $33,000/year today because there's relatively low demand for nursing-home patients to spend time on ships, and ships thus have considerably lower ratios of doctors-to-residents, reducing costs. While the first few dozen elderly could conceivably take advantage of this, I doubt the capacity in the industry is such that the cruise-ship price wouldn't significantly increase upon taking a very small percentage of the supply of assisted-care residents.

Another reason for lower cost is the lack of regulation of cruise ships; nursing homes have to comply with a variety of government standards for assisted-living care. While it's certainly possible, it's far from clear to me that the standards that cruise ships don't meet are immaterial to the quality of the experience.

Is Medicare really going to reimburse shipboard care? I've dealt with HCFA enough to be skeptical that that's so.

I don't think the 125-sq-ft. issue is a big one; that's not much less than the square footage of a room in an assisted-living facility, and one would presumably spend more time in common areas.

I think the real problem with the study is the apples-to-oranges comparison. The type of people eligible for cruises in Lindquist's study generally aren't those who go to assisted-living facilities; for the most part, they're the elderly who tough it out at home with help from neighbors and Meals-on-Wheels before their abilities decline to the point where they could neither take a cruise nor manage without assisted-living facilities.

Bob said at November 30, 2004 11:50 AM:

Another retirement option is Central America, South America, or Philippines (my wifes family house has a suite for us). In many areas it is feasible to hire a full time nurse and other help as needed on a moderate retirement income. Costs for personal services in the US are too high for most retirees; this, with the low Medicaid reimbursement to the nursing homes is reflected in the quality of care (indifferent care and unpalatable food).

dr.@mrs jr snell md said at March 5, 2005 7:06 AM:

march 5,2005
greetings
please contact re living of old restored local passenger ship.
queenannehill@speakeasy.net

brent said at March 16, 2005 3:59 PM:

WHATS THE STOCK SYMBOL GONNA BE.....

dr. jon r.snell said at May 28, 2005 7:32 PM:

5/27/2005
great idea and i will invove myself with my my wife Missey to asseist and help forks on boared.
please send any information/requests and we will help you through the red tape etc.
sincerely dr jon r snell
107 pine street Suite 228 seattle, wa 98109
e paqintedsky17@hotmail.com........

Juris Taskovs said at July 11, 2005 6:14 AM:

Peace be with You!

Dear ladies & gentlemen!

We are looking for possibility to find sources of support of old
people’s home in district Jekabpils (Latvia).
It’s located 7 km from Jekabpils which is an important traffic cross-point in the Eastern part of Latvia.
There are approx.240 inhabitants here – old age & handicapped people (approx. 80-just lying).
We would be very thankful for ANY assistance of managing the range our material problems:
From wheelchair and beds (may be second-hand), equipments facilitating invalids care, till pampers for adults, bad clothes and money & materials for repairing works.
If you even have ideas of searching contacts in this field, please, let us know. Please share our request among Your friends.

With best regards - Juris Taskovs, the social worker.

God bless You!

P.A. “Jekabpils rajona pansionats”
Enterprise Register Nr. 90001474442
Donation Acc. LV63 UNLA 0050 0054 7342 7

rmark said at July 19, 2005 6:16 AM:

Not a new idea - an older lady from England did this probably 10 years ago. If I recall correctly.

jeffory said at September 21, 2005 3:43 AM:

this is gd

Sean said at October 29, 2005 3:26 PM:

personally i think all old folks homes should be banned from America period, its just a nother way of listing the old people as the under-class society the way Adolph Hitler saw the blacks, jews, minoritys and incest. And anyways Old folks homes are basically a place where they are gonna kill you anyways so you wont be taking up much room for others, our country is scarey because our government and the state allows killings all because you are way to young as a (unborn) or if you are way to old and it sickens me.

Sean said at October 29, 2005 6:29 PM:

if old folks homes are so great, then why are they treating the old people like 5 year olds!!! its abcurred, you dont live for many years of your life and expect some assanine 16 year old caregiver who works in those homes to talk down to you as if your mentally incompetant or some vegitable. Its sad because some of the old seniour citizens in those homes that get talked down to like 5 year olds were at one time Doctors, Lawyers, CEOs, Astronots or Scientist. Our society and government has fixed it to where being old is like a negative thing or a crime, it used to be at a time when you got old, it was a honor and a sign of respect from the newer younger generation. For a son, daughter, grand daughter or grand son nowadays to send there mothers or fathers to those old folks home is totally disrespectful and selfish, they like to say "oh im doing this because its whats best for my mom or my father" i think thats all a bunch of complete crock, todays younger generation is sending there seniour citizen parents to these old folks homes just so they feel that they dont wanna take care of there sick parents, and plus not to mention right when they get sick and cant take care of themselves, they can get there valueble's. I feel that our government and state who mandates these old folks homes are nazi's or socielist, this is a freecountry and if a 80 year old man wants to still drive and still have his driver's licence, so be it. What sons and daughters nowadays seem to be forgetting that there parents all took care of them and loved them, but now they dont wanna help there sick old parents in return after when there parents brought them into this world and did many things for them. People are so selfish that they will go through all those lengths to send there parents, relitives or grand parents to these old folks home just so they can get there cars, house or anything that makes them happy

Sean said at October 29, 2005 6:29 PM:

if old folks homes are so great, then why are they treating the old people like 5 year olds!!! its abcurred, you dont live for many years of your life and expect some assanine 16 year old caregiver who works in those homes to talk down to you as if your mentally incompetant or some vegitable. Its sad because some of the old seniour citizens in those homes that get talked down to like 5 year olds were at one time Doctors, Lawyers, CEOs, Astronots or Scientist. Our society and government has fixed it to where being old is like a negative thing or a crime, it used to be at a time when you got old, it was a honor and a sign of respect from the newer younger generation. For a son, daughter, grand daughter or grand son nowadays to send there mothers or fathers to those old folks home is totally disrespectful and selfish, they like to say "oh im doing this because its whats best for my mom or my father" i think thats all a bunch of complete crock, todays younger generation is sending there seniour citizen parents to these old folks homes just so they feel that they dont wanna take care of there sick parents, and plus not to mention right when they get sick and cant take care of themselves, they can get there valueble's. I feel that our government and state who mandates these old folks homes are nazi's or socielist, this is a freecountry and if a 80 year old man wants to still drive and still have his driver's licence, so be it. What sons and daughters nowadays seem to be forgetting that there parents all took care of them and loved them, but now they dont wanna help there sick old parents in return after when there parents brought them into this world and did many things for them. People are so selfish that they will go through all those lengths to send there parents, relitives or grand parents to these old folks home just so they can get there cars, house or anything that makes them happy

liz said at December 24, 2005 3:08 PM:

I read about this living on a cruise as a senior in travel section of newspaper awhile back. I think it's marvelous; and now I see that it's no secret and many seniors are doing it, or contemplating it, including myself. Nursing homes, independent living, etc. are certainly very depressing, and the "waiting room for heaven" (or the other place). How great to meet new people all the time, socialize, have wonderful meals prepared 3 times a day or more; no cleaning duties; different ports of call every day; a way to exercise, walking around boat everyday...activities....wow!! especially great for a senior that is independent; takes care of all his basic health functions; Wow!! Where do I sign up???

tushar kumar said at February 9, 2006 11:02 PM:

what if these care units get out sourced to devloping countries , cost will reduce more.

Sheyla nurse said at March 26, 2006 10:57 PM:

I think that many cruise ships hire their personnel abroad in the third countries. And nurses are not exception. Anywa there is shortage of nurses in the US and ships must pay a lot for US nurses I guess.

Beverley Tembo said at September 13, 2006 12:39 AM:

I am a registered male nurse currently employed in Zimbabwe but i have registration with An Bord Altrainas[Irish nursing Board] and Nursing Board of Victoria in Australia.I am very interesed in workin in cruiseships but i dont know how to go about it ,can you asisst in any way to secure employment? I am very interesed in working with the old and frail to a make this world a better place even for the old and ill.
Contact me
Beverly email;bevie12345@yahoo.com or Tel;+263 91 971 974

Miyoba said at August 12, 2009 6:08 AM:

I am an IT technician, im looking for a job, looking after the elderly, I feel sorry for them. I did look after my grandmothers for a whole year and never forgot that experience, it was a bllessing.

John D. said at August 20, 2009 2:21 PM:

I like the idea of a nursing home at sea. At that stage of my life it sounds much more interesting than burdening my kids and living down the street. It has to be integrated with the cruise industry, though, because that will keep the place alive and hopping. It would also give friends and relatives a good excuse to come and see you. It should even include a mortuary. I would love to be buried at sea. And think of your wake. Friends and relative could go on a 2-3 day memorial cruise and a good time would be had by all!

thomasstarish said at June 9, 2010 12:41 AM:

The initiative taken for the concern is very serious and need an attention of every one. This is the concern which exists in the society and needs to be eliminated from the society as soon as possible. I like this particular article it gives me an additional input in the information a round the world. Thanks a lot and keep going with posting such information. I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone.
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Cruise Ships

Shelly Slader said at July 21, 2014 10:34 AM:

I know my dad would love if that was the type of senior care he received. He has always loved being out on the water. Cruise ships are much nicer than the boats he has stayed on too. He used to be out in the ocean for a few weeks at a time on a sail boat.
Shelly Slader | http://www.vancouverwa.comforcare.com/Services_Franchise_Home.aspx

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