Elderly money: how to make business in nursing homes

Elderly money: how to make business in nursing homes

In Russia 275 thousand beds in homes for the elderly and disabled (Federal state statistics service data, was last updated in December 2014). About 60% of them are designated for the elderly, estimates Alexei Sidnev, principal owner and CEO of Senior Group, consisting of five guest houses in the Moscow region.

Only 1.2%, or 48 of such institutions in the country are private — these data were presented at the meeting of the state Council on development of system of social protection of older persons in August 2014. And 98.8 per cent are under the responsibility of authorities of subjects of the Russian Federation. Similar numbers have specialized in market research the company Research.Techart: at the beginning of 2013, it has counted in Russia 68 private nursing homes, of whom 31 worked in the Moscow region, 15 — in Leningrad, 13 in Sverdlovsk.

Private home for the elderly in Russia appeared in the mid-2000s. the First one — in the suburbs, near Tarusa, in 2004, was opened by the owner of the company “Medservice Plus” Vladislav Zubkov, a doctor by training, who at that time was a private nursing service providing nursing home care and in hospitals. “I realized that there is a need for the service, but the service in the market”, — said Zubkov. Now in “Medservice Plus” three of a boarding house, where possible year-round accommodation for older people.

The participants in this market do not like and avoid using the term “nursing home”, calling the residents of Russia’s sustainable Association with the dilapidated buildings in which the old linger on geometricheskii with minimal care. For example, one of the most comfortable and expensive homes for the elderly in Russia calls itself the medical-rehabilitation center “Monino”.

Exemplary Guesthouse

“We are not a nursing home. Neither at relatives, nor at the elderly person does not have a negative experience that he comes to the hospital or in the nursing home,” explains Marina Pochenkova, the representative of “well-being”, the management company of the center “Monino”, owned by the NPF “Welfare”.

“Monino” looks like a Western-style boarding house is what we expect in American films. Under a canopy that protects from the scorching rays of the daytime sun, one of the buildings housed about two dozen “grandmothers” and a few “grandfathers”. Come closer and understand that we are in Russia: in the wicker armchairs, they sing old Soviet songs with the accordion sounds.

“We parents live major top managers, businessmen and officials, many of them did not give permission to have their parents interviewed or photographed close up,” warns Pochenkova. Basically, here people live, requiring constant care and treatment or who came for rehabilitation. Few people live permanently — their relatives can afford to pay 4-6 thousand rubles per day.

There are those who live in “Monino” at his own expense. For example, a retired Colonel Sergei Petrovich (name changed), who comes here regularly. “I am already 82 years old, and in a military boarding house in Arkhangelskoe I refused to accept it, he says. — I have a big pension, I have a couple of months and save enough for me for a couple of months of living here. The staff here is sincere, the staff is very attentive, and I found it more fun than staying alone at home to sit”. Lidia Petrovna (name changed) came here after a hip fracture, the Guesthouse pays her daughter a top-the Manager of a large Swiss company. “The daughter said, live, mom, all you want, she says. Here and medical services at the level and attitude, and cleanliness sterile — while I’m not going to leave”.

The boarding house in Monino, in 2007, leased from the former structures of the Ministry of the river fleet with the right to repurchase Nikolai Koblyakov, the then Deputy Executive Director of NPF “Welfare”. Under the auspices of the Foundation he began to develop the project of a country residence for the elderly. The businessman has concluded the contract with the French Groupe Almage and began to create a network of Senior Hotel Group. The plan was to build a network of 25 hotels, but at the end of 2010 after being held in his house the searches, Koblyakov left Russia: the Russian Investigative Committee opened a criminal case on the businessman under part 4 of article 159 of the criminal code (fraud in especially large size). According to the version of the RCDS, in 2004-2005 Koblyakov assisted the former General Director of vo “Stankoimport” Sagadat Habirova in the withdrawal of the foreign assets of the company by creating a fictitious scheme of money owed, wrote Kommersant.

Koblyakov lives in France, and the resort “Monino” in 2011, NPF “Welfare” was bought for 100 million rubles Unfinished network Senior Hotel Group, which consisted then of two country houses, in the same year bought out Alexei Sidnev, renaming in Senior Group. The transaction amount was not disclosed, market participants estimate it at $450 thousand–$1.1 million after a year and a half of 50% minus one share in Sidneva bought European medical centre (the sum of transaction its participants did not disclose).

Working with government and business flair helped Alex Sidnev become a leader in the premium segment of commercial nursing homes

Photo: Alain Kondyurin for

Senior Group

Alexei Sidnev from 1999 to 2007 he worked in the London office of the multinational Booz & Company. After returning to Russia in 2007 launched a project “Silver age” for the construction of private nursing homes and management. But made a mistake: I considered that in Russia as in the USA, will be in demand assisted, that is relatively independent accommodation in the homes of older people not suffering from serious diseases. Market research commissioned by the Sidneva in 2006, said that Moscow live up to 10 thousand people willing to pay for accommodation in the homes of older relatives $5 thousand per month.

Then the business Sidneva has not worked. “It turned out Russia while this story is not ready — family ties in Russia are quite strong, and as long as man can stay at home, he will be at home,’ he says. But once a person loses the ability to care for themselves and relatives do not, there is a risk of an accident, and attitude toward nursing homes change”. Sydney took that into consideration in the new model of business.

Day of boarding houses in the Senior Group starts around 8-9 in the morning, but no hard schedule, says Alexey Sidnev. “On the one hand, everything should happen as customers want, but there is a control house, so there should be some routine, as children,” he says. Residents go for Breakfast, then two hours of lessons with psychologists, animators, games, drawing, other entertainment, then dinner and sleep. The elderly it is important to take in all day: Western experience shows that this helps to preserve brain function and slow down the aging process, explains Sydney.

The major participants in the market are using Western standards, updating them taking into account Russian specifics and standards. “Well-being”, for example, focused on the experience of Germany, Denmark and the USA. Senior Group, first created the model for French counterparts, after coming Sidneva shifted to the Israeli experience. “In Israel live a huge number of immigrants from the USSR, and in the development of its standards, they also had to keep in mind the Soviet mentality, says Sydney. Besides, in dealing with them there is no language barrier, which certainly facilitates the learning process”.

Oleg Fedorov for five years from virtually zero managed to create a model for the Russian market of private pensions for elderly

Photo: Alain Kondyurin for

Three segments

The market situation is changing literally every day, says Anna Khotin, Deputy Chairman of the Board of noncommercial partnership of professional players of the market of private homes for the elderly “World of the older generation”.

“New Amateur players every month, but every month from the market and go previously worked,” she says. Closed mostly illegal enterprises, do not stand on the tax account. In early August, “the First channel” announced that in the Vladimir region the police closed the private house “fairy Tale”, in which without proper care there were two dozen seniors, seven of whom died.

The purpose of the establishment of “the World of older generation” declared the formation of industry standards, improving the quality of services and the development of the private sector. NP registered in may 2014, now it includes 10 companies: in addition to “Monino”, Senior Group and “Medservice Plus”, is a network of “Yellow cross” (two branches), “Care” (11 branches), “Custody” (seven branches), boarding house “Barvikha”, the system of social support “Care,” the company “Istok Audio trading” and pension “Blagodat”. Everything except working in St. Petersburg and Leningrad region “Care” located in the Kaluga region pension “Begalet” presented in Moscow region. Assessment of communities in the Moscow region the share of its participants is about one third market, one third of boarding houses is “relatively good”, the rest is paid services in public nursing homes and companies working illegally.

The business of homes for the elderly, ideologically close to the hotel, and in most cases the elderly live in them temporarily. The highest occupancy rate in summer is close to 100%. Least about 60%, in winter. The higher the price tag, the smaller the period of stay. In “Monino” average length of stay for the rehabilitation program — for about a month, care in the area of three to four months”, — says Director General of LLC “Prosperity” Oleg Fedorov. In “Medservice Plus” about 70-80% of residents live on a permanent basis. “Many people rent an apartment in Moscow, where he lived retired, add his pension and had enough to live with us,” says the head of the company Vladislav Zubkov.

But from the crisis are the first to suffer at home, working in the lower price segment. “Until 2014, the occupancy rate of our properties was above 90%, last year it dropped to an average of 80-85%,” — says the owner of the “Yellow cross” Ramaz Akhmeteli.

Sergey Krivosheev sure that the quality of life in residences for elderly are not inferior to European counterparts

Photo: Ekaterina Kuzmina/

“Premium-class for the elderly”

The founder of the pharmacy chain “36,6” and farmholding “Veropharm” Sergey Krivosheev decided to fill the niche premium segment. “The idea to engage in this new business I had in 2012, when I realized that there is enormous potential for the development and creation”.

In 2012 Krivosheev revealed plans to launch “the residences premium for older people”, in October of the same year, together with academician of RAS, Director of the National Institute of public health. N. And. Semashko Ramila Habrieva registered the company “Third age”. The first residence at 122 apartments opened in Rublevo-Myakinino, on the second kilometer of the Novorizhskoye highway in June of this year. She took one of the three buildings that were rented for this project. Reconstruction of the two is in the final stage.

Investment in the project Krivosheev does not mention, stressing that the loans were not involved. The sale of shares of “Veropharm” and “36,6” has brought him and his former partner Artem Bektemirov, according to media reports, about 6.2 billion rubles Krivosheev Himself does not confirm this assessment. The cost of living in the residence, he said, starts from 9.7 thousand rubles per day. Catering, Babysitting and additional services are separate. “We can’t take on the role of the state, working in economy class, can’t take it, and from the point of view of the middle class, but believe me, the rich also cry, and cry every day,” explains Krivosheev.

He is confident that the project will pay for itself in three to five years. “Why we have earned in Russia to spend money in the West? — he considers. What we did here is no worse or even better than what we have now in France and other Western countries, the use of furniture in the interior design of domestic production. There you will have to spend money for flights, rent, staff, phone calls and so on, then our service will seem quite reasonable.”

In the future, the business of private homes for the elderly can be very profitable. For example, the revenue for the American network of Brookdale Senior Living by the end of 2014 grew to $3.8 billion versus $2.9 billion in 2013, the gross up to $1.1 billion versus $0.9 billion in 2013.

The Russian market in this sense has a huge growth potential. As estimated by the who, if in Western Europe from 3.5 to 15% of people over 65 live in nursing homes, in Russia — only 1.3%. Thus, according to Rosstat, in 2014, 33.8 million people, or 23.5% of the total population of Russia, have reached retirement age.

The owner of a Petersburg network of geriatric boarding houses with treatment “Custody” Alexey Mavrin claims that with a full download of all of its resorts the profitability of the business can reach 36%. With a total network capacity of 380 seats and an average check of 50 thousand RUB per month estimated revenue of the network may amount to 228 million rubles. But now the load average does not exceed 70%, says the Mavrin. All seven resorts network rental, which allows to reduce capital costs and thus increase profitability.

“Monino”, which NPF “Welfare” possession by right of ownership, the profitability is much lower. The company has invested in the project about 700 million rubles, to recover the funds yet. In the first half of 2015 revenue “Welfare” has exceeded revenue for all of last year — RUB 61 million against 60 million rubles for the whole of 2014 — the margin is at 4%, is recognized as Oleg Fedorov. According to him, after the commissioning of the third corps it will reach 9-10%, but institutional investors are interested in profitability not below 12-14%.

The minimum and above

According to Rosstat, on January 1, 2014, the queue for receiving social services in stationary conditions amounted to 16.6 thousand persons (6.7% of the number received sociology in hospitals in 2013), of which 13.5 thousand expect a place in the psycho-neurological boarding school. “This is only the official data, artificially underestimate the local authorities, emphasizes Alexey Sidnev. — The real need is several times higher, and hence the market of private homes for the elderly has room to grow”.

At the end of 2013 was adopted the Law No. 442-FZ “About bases of social servicing of citizens in the Russian Federation”, which entered into force on 1 January 2015. Its lobbyists called Alexei Sidneva and Alexis Mavrina (the head of the Senior Group said that “lobbying in its pure form is difficult to call” — they Mavrin advised the authors of the law). One of the aims of developers of the law was the transfer of some state functions in the social sphere to the private enterprises.

Now the pensioner can choose the nursing home that he wants to go, but the need for the provision of services should confirm the bodies of social protection. Accommodation with a minimum set of medical services will be paid for by the state, but the rate of 2 thousand rubles per month per person, partly from a pensions of the people themselves (what part should be to give a pensioner, solve the bodies of social protection).

Prior to the enactment of the law to non-state nursing homes can accommodate people either on a commercial basis or by results of the won tenders, which functioned only for one year. The majority of networks have not entered into government contracts, but Senior Group and “Custody” were actively involved in these programs. The network Alexey Sidneva, their share reaches 50%. According to Sidneva, only in 2015 this programme will be spent from the budget of about 30 million rubles in Moscow region and about 100 million rubles in Moscow.

Network owners of boarding houses for elderly I expect that in Russia there will be people who will be able to pay for more expensive services than the state minimum. “Care” in the next five years plans to increase the number Fund of its guest houses to 5 thousand beds and is actively seeking sites for entry into new regions, including in Moscow. Senior Group plans in 2017 to build a new boarding house in Moscow region Malahovka 200 seats and invested in the project about 650 million rubles. the New buildings are planning to build “Monino” and “Yellow cross”.

In turn, the main owner of investment company O1 Group Boris mints this spring announced plans to invest 1 billion rubles in the construction under the Istra luxury senior residence on 250 places. The project will involve a company Danshell Group that manages the network of homes for the elderly in the UK. According to representatives of O1 Group, this residence will be like no “Monino” or the “Third age”, offering a “brand new case” quality.

Categories: guest houses


Senior Group, “Monino”

150 thousand rubles. per month

Intermediate level:

“Guardianship”, “Care”, “Barvikha”, home nursing care Complex, part of the “Yellow cross”

50-70 thousand. RUB. per month


“Medservice Plus” pension “Fee” included in the “Yellow cross”

34-45 thousand. RUB. per month