Business Management – Nursing Care Home
If I would establish a company in China, I would found a nursing care home for elderly people. For me it is one of the biggest investment and business sectors in the future of China. Some titles of newspaper article also show the importance of nursing care homes in the future of China like:
* “China needs 10 million elderly care nurses” (2008 Wang Zhenyao, leader of the social security and welfare bureau)
* “Beijing Encourages Private Nursing Homes – Beijing has adopted new measures encouraging non-governmental institutions and individuals to invest in care centers for aged citizens in the national capital.” (2005, china.org.cn)
The reasons for this development are as followed:
* Because of the one child policy the future generations will have problems in caring for their parents and grandparents. One child cannot care for 2 or more people, especially if they are heavily caring intensive. It will be difficult to combine a job and caring for someone.
* With the technology improvements in medicine and the better health status in the higher age people will get older. It means, that in future the amount of old people is growing. With reaching older ages, the number of care intensive people will also increase.
* Only 1.5 % of all people over 65 are living in nursing care homes at the moment. So the market will offers much growth in the future.
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* All this reasons combined will result in a strong demographic change (see Figure 2), which means that China will need more infrastructure to handle this problems. Right now Chinese government pay high subsidies to nursing care homes because they already recognized the lack of places in future and try to get investors to build new homes.
* The annual income of people in China is growing, so it will be easier for them to pay a place in a nursing care home. If a pair works it is more effective in comparison if only one part is working and the other part is caring.
A short calculation shows the problem China has to face:
* 2000: 88.110.000 people over 65 years
* 7% of whole population
* Estimated to 23% in 2050
* 276.000.000 if population decrease to 1.2 billion people
* 2008: only 1.5 % live in nursing care centers
* If 1 nurse cares for 10 people 27.600.000 nurses are needed
* Including illness and holiday its around 40 million nurses
1. You have to find qualified personal, especially in the medical and caring sector it is of highest importance to have qualified personal to ensure the safety of the patients and to prohibit the nursing care home from legal effects.
2. You have to find the right location for the nursing care home.
3. You need to offer the right services for the right clients in the right price.
4. You need a good process planning which guarantees effective and clean processes, otherwise it will be difficult to make profits.
3. How I would try to break down the obstacles
To get qualified personal I would try to make some kind of training program. One part of the staff is already qualified the other part is trained. Because of the training costs the salary of the trainees is lower than the ones of the qualified employees. In fact that the trainees get a qualified education and an standardized certificate if they finish the training program, the contract bound them for the next 3 years to work at this company. If they want to switch the company they have to pay a part of the education costs back to the nursing care home. This guarantees a constant pool of qualified employees for the future and will also make a good image for the company because it is not only seen as a working place as also as a place of education. In addition, all of the employees and trainees are allowed to live in company dormitories (small reduction of salary).
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So they don’t have to rent an expensive apartment when the way home is too far for them. It also guarantees in cases of illness a quick replacement of the employee through one of the others who are living in the nursing care homes. This also improves the social connection between employees and patients. To let the employees come down and be away from their patients as their work, several, especially for the employees build buildings serve them with a relaxing and conversation room, a games bar, a pc and internet room and a sport facility with basketball and table tennis. The last one can also be used by patients, who are still able to do some sports.
The location has to be attractive to deliver a nice ambient for the patients and the employees. It should not be in the middle of the city, but also not too far away from it. In Qingdao the place in the outer city near the Laoshan would be good, maybe a part where you can see the sea in the front and the mountain in the back. It would guarantee a quite surrounding and the families can still visit their parents or grandparents without haven a too far way. There have to be some public transport opportunities like bus or metro near the nursing care home, so that patients who are still able to shop or travel short distance by themselves can easily reach the city.
Most of the places in the nursing care home will be normal 1 or 2 bed rooms. In order to guaranty an efficient and profitable process there should be around 500 places. One floor should have the capacity of 50 beds, 40 in double rooms and 10 in single rooms, which means 30 rooms. There should always be two graduated nurses, which will be assisted through two trainees. In the night there should be always one nurse and one trainee. Every room has a fridge and a micro oven. On every floor is a shared kitchen, which can be used by all patients and also the staff. In the basement there will be a small shop where patients can buy all day things, newspaper etc. It is also possible to include some subcontractor like a barber shop or a small restaurant. The patients can also book 3 meals per day, that will be delivered from en external kitchen.
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In addition to the normal places, there will exist some kind of assisted living. On the nursing care home area will be some smaller buildings, that contain more luxury apartments, for people who are willed to pay for additional services and a more private living. They can book services like house cleaning, the meals, laundry service etc., but they can also do everything for their own. This will guarantee more acceptances for them to move in a nursing care homes. They can live like before but have the security and medical supervision of a nursing care home.
To guarantee a profitable business you have to plan the buildings and area with experts, who know the market and the processes. Only architectures will not be able to guarantee that. It would be better to include heath care economics, nurses and designer into the planning team, so that everyone brings their expertise into the project. It is important to establish standardized procedures to guarantee a constant quality of care. One of the major work of the health care economists will be to introduce an effective process management into the facility. It has to be done in an employee friendly way, so that the employees accept certain rules and procedures. It is also worth to include a critical incidence reporting system. With it employees can report their own mistakes and critical moments anonymous and without having fear to take disadvantage of that. Possible solutions can be developed by this and transferred to the rest of the staff, to be prepared for future critical moments.
The nursing care sector will grow rapidly in the next years. A fast investment would be the best way to get into the market and guarantee the state subsides. But there are also three other reasons why I would create a company like this in China:
* Secure market for the future, there will always be old people…
* Stabile through crises like the world financial crisis in late 2008
* Social market, making money while helping people / helping the whole state
Figure 1: Demographic Change in China from 2000 to 2050 (dark blue= male; light blue=female)
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Source: UN World Population Prospects 2008
Figure 2: Percentage of people over 65 years in comparison to whole population of China
Source: UN World Population Prospects 2008