Cruising Through Retirement? Jude Wanniski April 8, 2005

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: Tips From Gary North

The Terri Schiavo story not only has the baby boomers checking out living wills. It also the soon-to-retire crowd thinking about the retirement years and how to spend them. Gary North sends me his "Reality Check" columns a few times a week and I've excerpted them now and then when he is really on a roll. His column today, "Unassisted Living on the Cheap," is one of his recent best. Whatever your age, you should appreciate his observations, and if you have parents up in years, you may see fit to pass this on to them.

Gary North's REALITY CHECK
Issue 436 April 8, 2005

UNASSISTED LIVING ON THE CHEAP

At some point, you will probably be forced by circumstances, mediated by your kids, to move out of your home. You will then become visibly dependent on others. Of course, we are all dependent on each other, which is why we are rich. The modern division of labor has made us rich. But there is something about being visibly dependent that we resist. Such dependence is too much like becoming children again. It's unbecoming . . . except for children.

I don't think I would care. Give me a computer, a book, a yellow highlighter, and the Internet, and I won't care who cooks my meals. Yet maybe I would care. It would depend on my mobility outside the facility. A friend of mine who has early Alzheimer's has been put into a facility that locks him in. He calls it a prison. It really is. But, as he declines, this is necessary. That merciless disease will make him an infant again. Miracle drugs will make tens of millions of Americans the healthiest Alzheimer's patients in history.

THE BIG MOVE

Last year, my parents, in their late 80s, moved into a retirement facility. It's an unassisted care facility. They have their own apartment. The facility has a risk-reducing clause: If at any time either of them requires assisted care, the facility has another wing. So, if you are a resident of the unassisted care wing, you have priority in the assisted care wing. This makes good marketing sense.

My parents like the place. My father is happy with the food. My mother is happy to be in the city. Until a year ago, they drove several times a week for 45 minutes each way from their 10-acre place in the country into town. The gasoline expenses today would be 30% higher than they were a year ago. The risk on the road is less. The highway is a killer. Logging trucks are always hitting cars -- a one-sided exercise in the laws of inertia. My parents are also closer to the emergency hospital, which my father has had to be taken to several times because of falls over the last few months. (My mother suspects that a prescription drug weakened his legs. She quit giving it to him, and he quit falling.)

The key to their present comfortable circumstances is their health. They don't get sick very often. Neither of them is overweight. My mother is a disciple of the legendary Francis Pottenger, M.D. She took me to his clinic in 1948, where he helped restore my health in 18 months through diet and exercise. She has tried to structure their meals around Pottenger's high protein, low sugar, no processed grains diet. Over the years, this seems to have paid off. They both have outlived both of their parents, all of whom died in their early 80s. The diet has worked for me. I am in good health....

For those of us who don't think Medicare will still be with us in our old age, diet and lifestyle decisions today are ethically mandatory. I don't expect Medicare to go belly-up in one fell swoop. It will go out the way its highest-cost patients do: on life support, drooling. So, the care we can expect will be ever less efficient. My goal is to stay out of the health care delivery system, as I have generally stayed out of it, for the remainder of my life. I want to go belly-up in one fell swoop. So do you.

My parents say that their physicians keep looking at their watches. There is a 15-minute limit. They spoke about this with a friend of theirs in California. "Our limit is 12 minutes," she said. If you are under Medicare, think of the system as a physician who is ten years older than you are. Imagine what your level of care will be like when you're 75. You want a professional with a stethoscope. You'll get one on a catheter.

RATIONING LIFE

Fact of life: scarce resources are allocated either by money or by time. If you are not in a position to pay the monetary price of some item, you will pay with time. The health care delivery system speeds up the conveyor belt for people who don't have a feeding tube into their bank accounts.

The emotional commitment of care-givers is higher in an incubator room for newborns than it is in an Alzheimer's ward. People invest emotionally in the results of their work. If the results are guaranteed to be thwarted by a disease like Alzheimer's, the care-giver is unlikely to make an emotional commitment to the victims. The victims cannot offer thanks, and their relatives would probably prefer to see a victim die, especially if they are paying for care. The family's earthly inheritance is being depleted by the victim.

So, the closer you get to the day of reckoning, the less committed the health care delivery system is likely to be with respect to your future. This is not the case if you are paying full ticket for the care delivered. When you walk in the door as a full-price patient, nobody groans. You bring with you the preferred sweetener: money. But if you are covered by Medicare, and if the care-giver takes Medicare patients, you are a liability. By law, he must charge Medicare.

I have mentioned this strategy before, but it's worth repeating. Try to locate a physician in a small town. Preferably, he will be young. He has lots of debts to pay. He is accepting new patients. If his waiting room is empty, you will not be on a conveyor belt. In other words, in the trade-off between time and money, you're not costing him much in time. His time is less valuable. In a city where his waiting room is filled with Medicare patients, you will be on the conveyor belt. Time is money. Time spent is money lost. He will keep looking at his watch…

CRUISING THROUGH RETIREMENT

Am I exaggerating? Not really. Call around for tour ships. See what a two-week cruise costs with a discount package. You will find that it's not much more expensive than living in a non-assisted care facility. The food is better, the service is terrific, there are things to do, new people to meet, and you can enjoy true leisure.

There are downsides. Your cabin is small. You don't establish long-term friendships. You must go to a new ship every two weeks. But maybe not. Sequential tourists are now becoming common on cruise ships. These people provide steady income in the off season. They are easy money for the cruise ship companies. You can negotiate deals.

You can rent cheap cabins or fancy ones. There is no stigma to a small one. Who else knows? And people landside think you're in fat city, which in fact you are. They don't call it "The Love Bloat" for nothing. All you can eat: steak, chops, all sorts of choices. Just stay away from the slot machines.

I had heard about this strategy 20 years ago, but it did not register mentally. It was a "Wall Street Journal" center column story about some dissipated wealthy man who had lived for decades on cruise ships. He would gain too much weight and then have to go to a fat farm to take it off. Then he would go back to the ships.

In a recent issue of the daily "Early to Rise" e-letter, I read about an article by journalist Korky Vann (not a cruise ship name, surely), who reported the following.

Hate the idea of living out your life in an assisted-living facility? How about spending your golden years sailing the high seas and visiting exotic ports of call instead? If the idea sounds farfetched, check again. A geriatrician at Northwestern University says full-time cruise-ship living is a feasible and cost-effective alternative to assisted-living facilities, and she's got the research to back up her claims.

Dr. Lee Lindquist, an instructor at Northwestern's Feinberg School of Medicine, compared the costs (over a 20-year life expectancy) of moving to an assisted-living facility, a nursing home and a cruise ship, including the expense of treating acute illnesses, Medicare reimbursement and other factors. She found that the net cost of cruise-ship living was only about $2,000 more than the alternatives ($230,000 versus $228,000) and offered a higher quality of service.

"Cruise ships offer such a range of amenities -- such as three meals a day, often with escorts to meals if needed, room service, entertainment, accessible halls and cabins, housekeeping and laundry services and physicians on board – that they could actually be considered a floating assisted-living facility," says Lindquist, who published the results of her study in the November 2004 issues of the Journal of the American Geriatric Society.

Lindquist was inspired to undertake the research after taking a cruise with her parents. She noticed a large number of senior travelers with walkers, canes and wheelchairs who were enjoying the activities, amenities and social stimulation of cruise life. After returning home, she started asking her patients about assisted-living facilities vs. cruise-ship living. When many expressed concern about the cost, Lindquist decided to take a closer look. The surprising cost comparisons inspired many of her senior subjects to seriously consider cruise-ship living. Retiring baby boomers were particularly enthusiastic about the concept.

The plan would work best, says Lindquist, for seniors who need a minimal amount of care. She envisions a cruise community of seniors integrated with regular passengers, rather than a "floating nursing home" carrying only older adults. "Seniors who enjoy travel, have good or excellent cognitive function but require some assistance with activities of daily living are the ideal candidates for cruise-ship care. Just as with assisted living, if residents became acutely ill or got to the point that they needed a higher level of care, they would have to leave," says Lindquist.

"Until then, they could select a cabin to inhabit as home during prolonged cruising, while other passengers would arrive and disembark as usual. The change in other passengers would provide seniors more stimulation and interactions with new people." That socialization, says Lindquist, is key to the concept.

"Depression in nursing-home residents is estimated to affect as much as 25 percent of residents," says Lindquist. "Would you rather spend your days sitting in a lobby watching the same people go by or be on permanent vacation?" While Lindquist's idea hasn't had widespread application, some seniors are already practicing a variation of cruise-ship retirement. Industry experts say a number of older adults, nicknamed "serial cruisers," schedule as many as 20 to 30 cruises a year. And a Florida woman, 86-year old Bea Muller, has been a permanent resident on the QE2 for close to five years.

Muller's husband died while the couple was on a world cruise in 2000. Rather than move to a retirement home, Bea sold her home and possessions and booked herself onto the ship for a year.

She's been renewing her yearly reservation since, and reportedly spends her days happily dining, dancing and socializing with new acquaintances. Her novel decision has earned coverage on CBS's "60 Minutes" and in numerous newspapers.

Lindquist says seniors interested in cruise living should start out with a short cruise and gradually extend their time onboard to see if the lifestyle works for them. Feedback from those who've tried it, she says, has been overwhelmingly positive.

"On a cruise ship, you're treated like a customer, pampered and indulged," says Lindquist. "In an assisted-living situation, you're a patient. Anyone who's observed both situations can tell you, there's a big difference between the two."

http://shurl.org/cruising

I am not recommending this lifestyle for a lifetime. It might be nice for six months or a year, to get the travel bug out of your system. Frankly, I would go nuts on a cruise ship. I know this for a fact. I used to be a speaker on cruises run by Howard Ruff in the late 1970s. I wore my Al Weiss three-piece suits on board ship. No one else did for some reason -- the Caribbean in July, possibly. It was not my lifestyle.

I am only trying to illustrate a point: the high cost of unassisted care retirement centers. If you do not need assisted care, there are alternatives to an expensive facility.

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