1. Uniting the Internet of Things, BLE Beacons, and Wearables
Margaret Avery
Daniel Feeman
Linsey Jaco
Chirag Patel
ITEC 616 001HB
Management of Information Systems
Professor Rod Fontecilla
Presented at
American University, Washington, DC
March 3, 2015
2. Executive Summary:
Wandering is a common symptom among dementia patients, in fact experts report that 60% of
patients with dementia will wander at some point. The annual cost of searching for those who wander is
an exorbitant dollar figure: $1,500/hour with low-tech rescue operations lasting on average 9 hours.
Beacons of Hope seek to mitigate these costs, thus creating free cash flows and increasing the safety of
those living with these diseases.
Sunrise Senior Living is uniquely positioned for great potential return on investment with the
proposed use of wearable devices and placement of beacons for dementia patient care (Beacons of
Hope). The proposed investment would hone the power of beacons and GPS for precise location
tracking inside and outside the facility to reduce the incidents and costs associated with elopements1
as
well as improve the response time and even preemptively warn of a patient’s deteriorating condition or
even accelerated movements - like falls.
The proposed use of the technologies would create a hand shake between the strategically placed
beacons and the wearable device found on the wrist of the patient. That handshake will inform
caregivers of the patient’s real-time location. This data would be sent to a software application that
could be accessed 24/7 on a computer at the central nursing station or on a mobile device held by
caregivers. In the instance of a patient leaving a restricted area the handshake between the beacons and
the device would send an immediate alert to the application and the caregivers could then respond
appropriately. In a situation where the patient removed the bracelet, the caregivers would be
immediately notified with a similar alarm.
The incorporation of these tools will benefit the consumer by increasing independence and creating
usable data on the disease. The tools in turn create a cost savings for Sunrise and increase free cash
flows – allowing the company to pursue an ambitious acquisitions strategy.
Company Background:
Sunrise Senior Living LLC provides senior living services in the United States as well as Canada
and the United Kingdom. The company offers independent and assisted living and care for individuals
with dementia. Sunrise can stand to benefit from this lower cost, higher efficiency technology in the
United States and through a phased approach into the United Kingdom and Canada. While being
considered one of the four largest assisted living facilities in the United States, Sunrise can use this
technology as yet another way to differentiate their quality of care from that of their diverse
competition.
The Senior Assisted Living market in the United States has a uniquely competitive environment,
there are nearly no barriers to entry and with an aging population there is a need for assisted care
facilities in almost every region. 87% of the market is controlled by a mix of small non-profit and for-
profit businesses. Between 2010 and 2020 those between the ages of 65 and 84 will increase by 38.8%,
those over 85 will increase by 18.7%, with baby boomers controlling 70% of the U.S. financial assets
1
Elopement is defined as when a patient wanders away, walks away, runs away, escapes, or otherwise leaves a care-giving
facility or environment unsupervised, unnoticed, and/or prior to their scheduled discharge.
3. and more than half of discretionary spending, this means that the elderly can demand more from
competitors . Such a unique set of circumstances has created a diverse and fragmented market which
requires multiple facilities to be located close to family members. The true competitive advantage of
these facilities relies on their location and familiarity with the community.
Technology and Application:
Wearable user interfaces describe the interaction between humans and computing through
electronics designed to be worn on the body. The device works harmoniously with the human body
and/or the environment around the wearer and transmits the information to a smartphone or to the
cloud. Ideally, wearable user interfaces are unobtrusive, always on, wirelessly connected and provide
timely information. Examples of wearable electronics are smart watches, smart glasses, smart clothing,
fitness monitor wristbands, sensors on the skin and audio headsets.
Wearable technologies paired with Bluetooth beacons enable location monitoring capabilities.
Bluetooth Smart (aka BLE) devices serve as proximity beacons to Bluetooth 4-enabled mobile devices,
such as smartphones and wearables technologies. With BLE's Proximity profile, mobile devices and
applications can derive their proximity to the beacons at a granular-level that may not be possible with
other location technologies, especially in an indoor environment.
While both technologies can’t achieve our goal independently, using a background application
allows for information integration. The application actively communicates with both the wearable
device and the beacons to collect pertinent vitals and location information. The application in turn
analyzes the information and provides it to nurses and caregivers through a mobile application.
Additionally, in times of emergency (i.e. elopement events, sudden volatility in vitals, or falls) the
application initiates situational response functions.
Our focus is on vitals and location monitoring wristbands for dementia patients. The wristbands
will monitor vitals and whereabouts for dementia patients. Furthermore, the technologies would create
a hand shake between the strategically placed beacons and the wearable device found on the wrist of
the patient to inform of the patient’s real-time location. This data would be sent to the above software
application that could be accessed 24/7 on a computer at the central nursing station or on a mobile
device held by the caregivers while on shift. In the instance of a patient leaving a restricted area the
handshake between the beacons and the device would send an immediate alert to the application and
the caregivers could then respond appropriately. The caregivers would also be notified if the bracelet is
ever removed from the patient. This technology will enable increased response agility by nurses and
caregivers resulting in an overall reduction in the number of elopement events.
Financials:
4. With the integration of Beacons of Hope into the IT strategy Sunrise can lower its operating costs
considerably. In 2011, Sunrise was providing care to more than 30,000 patients worldwide2
and
according to the Annals of Long Term Care it is estimated that 1 in 5 memory-impaired patients are
expected to experience an elopement event per year3
. Implementation of this technology is estimated to
reduce elopement events by approximately 55-65%4
. The forecasting found in Annex 1 conservatively
estimates that 50% of the 1 in every 5 dementia patients that wander every year would be receiving care
in a facility. Although no specific statistics were available to determine the exact number of dementia
patients in Sunrise homes, the resulting assumption is if 10% of all Sunrise patients wander then it is
reasonable to estimate that 15% of every home represents the dementia patient population. Our
empirical observations of three different homes indicate that an average of 40 beds are found in each
dementia care unit (see illustrative diagram in Annex 3 for strategic placement of beacons).
The necessary investment for the proposed Beacons of Hope would be comprised of the following:
(1) Hardware: beacons, wearable devices and IPod Touch for mobile monitoring capabilities (2) R&D
of software application and initial training (3) Maintenance: annual service contract of software
application, cybersecurity, cloud computing services and annual maintenance of hardware and (4)
Installation of hardware. A phased approach that penetrates the U.S. market first followed by the U.K.
and Canada respectively, would require an investment of less than $3M ($2,996,977). The expected
return on investment or free cash flow generated from the reduction of elopements totals to $48M over
the three year phased strategy (details in Annex 1).
Unquantifiable Benefits and Scalability:
Among the long list of benefits associated with implementing the use of a wearable device in
the dementia patient community, there are several that are unquantifiable. The most substantial of these
is the peace of mind and sense of security for the caregivers, family members and those who are
suffering from the disease. The coupling of the wearable device and beacons allow for patient
monitoring and serves as constant “eyes-on” when a caregiver isn’t in direct sight of the patient. The
device will also give the patient a sense of independence and security knowing that if something goes
wrong (i.e. a fall) their caregiver will be aware of the instance, their location and can respond quickly.
In addition, the analytics that the device provides will allow for caregivers to be aware of specific
changes in vitals that occur before an elopement event (i.e. increased pulse or agitated and frantic
movements).
A future benefit of the proposed use of the wearable device along with beacons is its potential use
in the home environment during the early stages of dementia. In addition, this device could be used in
the general population of care facilities. The device and beacons can replace the current “Life Alert”
system which is much more restrictive and often requires that the patient be able to pull string in the
bathroom and/or a button on the wall of the room. The ability to utilize this device in different
environments and with a range of patient groups could make a substantial impact on the healthcare
industry (see associated risks in Annex 2).
2
Sunrise Senior Living. 2011 Annual Report. January 2012.
3
Lester, Paula E., Adrianna Garite, and Izchak Kohen. "Annals of Long Term Care." Annals of Long Term Care. March 19,
2012. Accessed February 15, 2015. http://www.annalsoflongtermcare.com/.
4
Mitesh Patel. Interview by Chirag Patel. Phone, Senior living facilities in Texas and Florida. February 11 2015
5. Conclusion:
Sunrise seeks to expand their current market share but in order to do so they need more free cash
flows. By using beacons, wearables and relying on the internet of things for the connection between the
two, Sunrise Senior Living has an opportunity to reduce the inevitable elopement costs as well as
reduce costs associated with delayed reactionary care (e.g. deteriorating condition after fall). These
savings result in free cash flows that the company can then use to expand by purchasing more facilities,
which will increase market share and generate more revenue.
Beacons of Hope will provide Sunrise Senior Living with the means to grow as a company and the
capability to phase the benefits of the technology into the general patient population, an attribute that
three different providers in three different states all noted during interviews would be immensely
impactful to staffing and services. As stated in the 2011 annual financial statement, Sunrise Senior
Living’s growth over the future is limited by the free cash flow they have in the present – this
technology is the Beacon of Hope that will provide the means for growth.
6. Appendices:
Annex 1: Financials –
I. Details of ROI
Number of patients served by Sunrise 30,000
Estimate of memory-patient 15%
Number of patients who wander annually 10%
Cost of Search/hr 1,500$
Average number of hours for search efforts 9
Average Elopement Reduction by E-Tech proposal 60%
Implementation Costs of Tech
Cost of Wearable Tech per person at Mkt Rate 250$
Cost of IPod Touch (mobile device) $200
Number of Ipod Touch per home 10
Cost of each Beacons 33$
Number of becons per home (estimate) 60
Research & Development 100,000$
Installation Costs (40% of hardware) 40%
Fixed Annual Maintenance cost (service contract) 20,000$
Variable Annual Maintenance cost (3% of hadware) 3%
Estimated increase in patients each year 5%
Sunrise Home Breakdown by Country
Number of homes in US 269
Number of homes in UK 27 86%
Number of homes in Canada 15 9%
Total Number of Homes operated by Sunrise 311 5%
Inputs
7. II. Free Cashflows
Without Tech With Tech Without Tech With Tech Without Tech With Tech
Elopements in US per year 2,595 1,556.91 2,725 1,635 2,861 1,716
Elopement in UK per year 260 156 273 164 287 172
Elopement in Canada per year 145 87 152 91 159 96
Total Number of Elopements 3,000 1,800 3,150 1,890 3,307 1,985
Elopement costs per year 35,030,547$ 21,018,328$ 40,473,955$ 24,284,373$ 44,647,623$ 26,790,750$
Reduction in Costs w/ Tech 14,012,219$ 16,189,582$ 17,856,873$
Implementation Costs:
Wearable Device Cost annually - 973,071 - 117,130 - 76,746
Beacon Cost annually - 532,620 - 53,460 - 29,700
IPod Touch Cost annually - 538,000 - 54,000 - 30,000
Hardware Subtotal - 2,043,691 - 224,590 - 136,446
Research & Development - 100,000 - - - 20,000
Installation Costs - 213,048 - 21,384 - 11,880
Maintenance Cost annually - 81,311 - 69,785 - 74,843
Total Investment - 2,438,049 - 315,759 - 243,169
Total Savings 11,574,169 16,505,341 18,100,042
Return on Investment (ROI) 4.75 50.27 72.43
Year 1
Implementation in US
Year 2
Implementation in UK
Year 3
Implemenation in Canada
Forecasting for Beacons of Hope
