New homes for the old

Old-people’s homes are full, as attitudes to the elderly change
Apr 21st 2012 | HANGZHOU | Economist

All together now
EIGHTY-nine-year-old Zheng Jixuan is thrilled with the place where he will live out his dotage: a small but comfy room in the newly built wing of an old-people’s home in the city of Hangzhou, 180km (110 miles) south-west of Shanghai. Though Mr Zheng’s son lives in the same city, he does not have time to care for his father, so old Mr Zheng has moved into the Hangzhou City Christian Nursing Home. As a retired doctor, he cheerfully tends to the minor ailments of other residents. The home is “better than in America,” he says, and good value at just $250 a month, paid from his pension.

Mr Zheng’s nursing home draws together within its walls two profound changes in urban China: the growing number of old people whose children cannot or will not take care of them, and a government willingness to allow religious groups to take on the task. The Hangzhou home enjoys a subsidy from the local government of 10,000 yuan ($1,600) for each new bed. Funding has also come from Christian donors, and the deputy director, Zhou Wenjie, says any new resident must be a Christian or at least open to becoming one.

Non-government institutions account for about 20% of the 33,000 beds for the elderly in the city, says Sun Xiaodong, deputy director of another nursing home, the government-run Hangzhou Social Welfare Centre. But, he says, supply cannot keep up with demand. When Mr Sun’s nursing home opened in 1999, the first phase of 500 beds took four years to fill. Now, with a total of 1,400 beds, it has a waiting list of more than 1,000 names. Another 2,000-bed home is already being built, and there are plans for one that will house 5,000 pensioners.

Shifting attitudes to the elderly in China’s cities have created a huge market opportunity. Mark Spitalnik, an American who runs China Senior Care in Hangzhou, began forming a business plan five years ago for a nursing home that would charge nearly $5,000 per month. He did his market research on the golf course. (“Any guy that’s playing golf in China is in my target market, right?”)

Mr Spitalnik says that if he told his Chinese golfing partners the idea for his business on the first tee, they would say it did not make sense, because China’s tradition of filial piety requires children to look after their parents. He says he could usually persuade them otherwise by the sixth tee. Today, he says, such persuasion is no longer necessary. Other American care-providers are now rushing in too.

Mr Sun, the care-home director, believes the government should encourage more private nursing homes, including those run by religious charities, because the need is so great. Central-government policy may be helping. In late February the government issued a document that seemed to encourage religious groups to do charity work. The proposal applies only to officially approved religious organisations, and the Communist Party remains cautious about the influence of religious groups. But it is also aware of the growing needs of society, and its own inability to meet them.

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