The ‘inevitable’ caregiving cost nightmare: One young founder's story and solution
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I wanted to become an aerospace engineer.

Went to college early at 14, ultimately got my degree at Berkeley. But it was at 16 that I pivoted my career from aerospace into the longevity and healthcare ecosystem because my aunt, who is a really integral part of our first generation immigrant family, she was diagnosed with terminal stage colon cancer. And what came with that was two and a half years of navigating her daily long-term care needs. Things like getting in and out of bed, taking a shower, using the bathroom.

And for us, it wiped us out financially. We didn't realize health insurance wouldn't cover majority of this care. We stepped in physically since it was happening at the home. It made me incredibly empathetic to how devastating it is to navigate a long-term care event. And the fact that it's gonna happen to every single household at least once.

This is an important economic shift where more people than ever are aging longer and not necessarily healthier. And the volume of folks that are entering into our retirement population is also at an unprecedented number in addition to the rising healthcare inflation of long-term care costs. The long-term care nightmare that's coming is inevitable.

Welcome to Meet the Leader. I'm Linda Lucina and I am excited to introduce you to Lily Vitaya Rookskel. She is the founder of Water Lily and that is a startup that's helping us get more prepared for living longer and helping us afford it. How are you, Lily? I'm doing great. Very good. Can you explain the concept of the longevity economy for people who aren't familiar?

So the longevity economy represents this massive economic force that's coming from all the aging individuals entering into our retired population and needing some form of care or help. This either results in assistance with health care needs

financial needs or navigating the family caregiving aspect of it as well. Sure. And why is it crucial that we bridge this gap globally given that there's increasing lifespans and decreasing health spans?

This is an important economic shift where more people than ever are aging longer and not necessarily healthier. And the volume of folks that are entering into our retirement population is also at an unprecedented number in addition to the rising health care inflation of long-term care costs.

Some call this sort of a long-term care nightmare. Can you give us what is the worst case scenario here? What is it that we want to avoid when it comes to not being prepared for long-term care? It's more of the long-term care nightmare that's coming as inevitable given the dynamics in behavior,

finances and the health care dynamics. On average, every single household is going to deal with a very serious form of long-term care events. And we naturally today avoid the conversation until the point of our aging parents or our grandparents need that care. And we're thrusted into that position of being a caregiver, taking care of

our loved ones at the home or gearing towards the incredibly expensive cost of facility care because we can no longer take care of them at home. We're at unprecedented numbers today where long-term care costs represent 1.5% of GDP. And by 2050, just 25 years from now, what we're gonna see is a 400% increase in cost

as well that is mostly taken on by the government, but because of how quickly that cost is growing, which represents a compound annual growth rate of about 6.6%,

That burden will likely fall away from the government's social safety net and likely fall on the families in the form of either additional regulations, taxes, or out-of-pocket costs. And what or who can help promote financial literacy for people for all generations and all backgrounds? Who can help?

I would say all the voices right now that already talk about the importance of saving towards retirement, whether it's your 401k or additional retirement accounts. Those voices, whether it's the employer, it's the public figure, any public figures in media that talk about financial planning, the wealth management industry, the insurance industry,

they all need to start talking about how important it is to prepare for long-term care costs because it's not just about growing our wealth so that we feel comfortable in retirement. It's about protecting that wealth as well because aging costs are one of the number one reasons why we deplete a lot of our savings. Long-term care, you talked a little bit about, hey, it's not just something for older adults to concern themselves, but can you dig in a little bit about that? You know, who else needs to be thinking about long-term care?

So the folks that need to really start thinking about long-term care are not just the families that have never thought about this topic and now we see that the burden will be shifting towards them and how do we prepare them appropriately and educate them. The responsibility really falls on both the private and public sector to educate these families on the future burden of long-term care costs and have a dialogue not only with these families but amongst themselves

to talk about what are some potential solutions that we haven't seen before that need to be in place to really prepare these families, both from a social safety net perspective, as well as the private financial products that are a lot smarter than just not saving for this environment or that are more competitive than saving for this environment, whether it's the insurance industries, the financial services industries, or the local or federal governments.

So tell us about Water Lily. What is it and how does it work? So Water Lily is a company that I founded that built AI that predicts a family's future aging care needs and the associated cost. And we guide them through the logistical and financial planning process to steer them to a more sustainable aging trajectory. And the way that works

is through an initial three minute simple intake form where we don't need your genetic information, we don't need your medical records. We ask about three minutes worth of questions on social demographic information, medical information and financial information. And with that, we leverage over half a billion data points of families that already navigated a long-term care event where we followed them for 30 years

so that we can match you to the households that went through this event to predict for you what is your likelihood of needing care, what age you'll start needing that, as well as that duration of time and that progression of care needs where you usually start with needing care at the home for your lighter care needs

And it's not nursing home all throughout, towards the tail end you do touch on nursing home care, but what's important is this, is we double down and also tell you if you're gonna need care at the home, we also predict how much the family members would step in by default if you don't have a plan in place. Whether it's a spouse, the children or other family members, so that you might decide I don't want to burden my family in that same way and maybe I need to save more in order to pass those care hours off to the professional

And the end piece of Water Lily is how do we solve for that future, let's say 1.5 million in cost as efficiently as possible, either through self-funding, through investments or through insurance products or other financial products that could also cover this cost. - And how did the clients actually work with the tool? What information are they giving you? What do they need to have to feed into this tool?

So we ask for social demographic information such as your gender, where you live, or your marital status. We ask for financial information, which is your net worth, as well as your annual income. And we ask medical questions such as any diagnoses that we should know about, any recent surgeries, are you taking any medication as well. And what sort of before and after stories do you have so far that you might be able to share with us?

So the first story is actually my co-founder, Evan. He is one of our first angel investors turned co-founder. And so when he invested in the company, he just believed in my background. I've been patenting and innovating from a very young age, from 12 to 16, working with NASA and then leading product and engineering. So he knew that I was going to build something great for families that really needed it from a healthcare perspective.

But when we launched our first MVP about a year and a half ago,

he tried out the product there was even no recommendations on the platform no financial recommendations but he didn't know anything about long-term care and when he went through the system it told him what his unique needs were going to look like he was going to need care sooner than he expected he was going to pass sooner than he expected and it was going to be way more expensive than he ever anticipated and he couldn't stop thinking about those statistics and so what he did is that he changed the way he was saving towards this event

as well as he's lost 10 to 15 pounds actually since he's used our software in order to stave off the long-term care events and also live longer because that's what the projections showed him if he was healthier in some way. And we've seen countless stories like these with the hundreds of families that already walked through our system since we launched just a few months ago where the main statistic is not just

You know, it's not just about building a beautiful educational experience, it's about getting families to act.

And so we see that of the hundreds of families that self-report after building out a Water Lily plan, 45% actually purchase a life, long-term care or an annuity product, which represents a 100X increase or an 11,000% increase in long-term care financial product sales compared to the baseline today, which more closely matches the growth in long-term care needs that we're also gonna have in aging population.

as well as over almost a third update their investment strategies towards long-term care, a fifth change their estate plan, and almost two-thirds change how they want their family members to step in as a result. And what is not on our platform, but what is actually happening, which represents unique use cases of our platform, is many clients are also losing weight through our platform where they are oftentimes they're very overweight.

And when they see that their long-term care needs are in their 70s when they expect it to be in their 90s, they think, well, is it because I'm overweight? And so they re-put in their data that is 40 pounds lighter than their current version. And they notice it helps them live five years longer or it makes their long-term care event a lot less intense, a lot less expensive. And in five or six months, they've lost those 40 pounds. So that's been really incredible results for our platform as well.

Absolutely. And also when we're factoring the cost of living longer, you have to maybe factor in that you might be ill. You might not be at your same health. Exactly. There was a special pilot with Prudential. Can you tell me a little bit about that?

Prudential saw a really innovative use case for Waterlily where we can better engage their policyholder population, whether they're on claim and needing care right now and have activated their policy or if they're pre-claim, meaning they've purchased a policy but they've yet to have that long-term care event just yet.

so Prudential has encouraged that entire policyholder population to use Waterloo to help them for the first time ever actually understand what their future care needs and costs are going to look like to not only understand is there a financial gap in this policy and how much care I actually need and what that will cost and maybe I need to self-fund for that but also how do I start thinking about my future care needs

in a much more logistical and sustainable manner, whether it's how I want my family members to step in, how do I have a conversation with them about whether or not they could actually step in to take care of me, do I want to age at the home, am I okay with aging into the facility? So we're starting to

ignite those conversations so that we could more properly understand the risk of this population, as well as guide them to a more sustainable future, not only for themselves, but really for the private life insurance industry that's trying to take on this risk as well. You have a sort of an incredible origin story for it for Lilly. Can you tell us a little bit about this story?

Yes, so I founded Waterlily due to navigating a personal long-term care event in our family. In a past life, you're correct, I wanted to become an aerospace engineer. So when I was 12 to 16, I was doing some work with NASA, went to college early at 14, ultimately got my degree at Berkeley.

But it was at 16 that I pivoted my career from aerospace into the longevity and healthcare ecosystem because my aunt, who is a really integral part of our first generation immigrant family, she was diagnosed with terminal stage colon cancer. And what came with that was two and a half years

of navigating her daily long-term care needs because she was just so incredibly frail post chemotherapy. Things like getting in and out of bed, taking a shower, using the bathroom, needs that many people are likely familiar with when thinking about their aging parents or thinking about their grandparents and the needs that they have. And for us, it wiped us out financially. We didn't realize health insurance wouldn't cover majority of this care. We stepped in physically for majority of that care since it was happening at the home.

But most importantly, it tore my family apart to navigate this without a plan. We are first generation immigrants and this is on my mom's side where her entire family and extended family came from Cambodia and are war refugees. And so they were incredibly tight knit when they came here to the country. But after navigating this long term care event for my aunt, where there was no plan in place, there was no insight into what the best form of care for her would look like, it really

my family part created deep strife such that we haven't spoken to that entire side of our extended family in over a decade since this event has happened. So it made me incredibly empathetic to how devastating it is to navigate a long-term care event and the fact that it's going to happen to every single household at least once.

The core thesis around Water Lily then was how can we take that really deep scar tissue that I developed navigating this personally and for every single other household that is going through this today or will be going through this, how can we reduce that scar tissue that happens on this event or get rid of it altogether by showcasing through predictive AI what that scar tissue will look like

to young enough family members that could actually make a decision ahead of time and change their trajectory. And what are two to three practical ways that people can better prepare for long-term family care needs? The first one is understanding that families usually take on majority of the care needs as well as the majority of the care cost.

So becoming educated on what it means to potentially take care of mom or dad or your grandparents, whether they want to age at home or they're open to going into facility-based care, whether it's a nursing home, starting to become educated on what those care resources look like, either to get professionals at the home or get that in the facility, as well as potentially taking on that care yourself, whether if your parents or your grandparents need help with getting in a bed, taking a shower, using a bathroom, et cetera,

how are you stepping in for that logistically? Can you step in for that? Do you live close enough or are you planning to live close enough to start to take care of them and start to talk to your parents about or your grandparents or those family members about financially where they're at? Majority of people today are not prepared at all, even for retirement. So as a result, they're not even prepared for these costs. And oftentimes,

These loved ones want to stay at home. They have a certain quality of life that they expect when they age. And as a result, the cost of maintaining that quality of life oftentimes falls on their children or other younger family members. So understanding, do we have to start taking on that cost yourself? What is that cost going to look like? Is it a quarter of a million dollars? Is it half a million dollars? How can we financially start to prepare for those costs ahead of time?

And then finally, the third piece is start to look into financial products in this space as well. It's not just about saving towards this event $5 every single month. That's just not enough money. However, there is an entire overlooked private industry, both life insurance and the long-term care insurance industry, who do have financial insurance products or annuities that can have potentially a better ROI than you self-funding yourself.

Thanks so much, Lily. For more video podcasts, go to our YouTube page. And for more transcripts, go to wef.ch/podcasts.