In accordance with the baby boomer generation nearing their retirement years, revenues for elder care services industry are expected to grow 5.2% annually and reach $319.5 billion through 2016, according to a recent study from the Freedonia Group, Inc.
Several factors such as increased life expectancy and recovery in both the economy and housing market will contribute to the surging demand for elder care in the coming years.
The average life expectancy in the United States currently stands at 78.2 years, according to data from World Bank Institute (WBI). As that number increases year after year, a rising number of individuals will require long-term care services as they age.
Growth in the elder care services industry will account for this increasing demographic in the older population, notes Freedonia, as well as economic recovery in the housing market, which will enable older adults to more easily afford their care.
But while these trends will further increase the demand for elder care, growth will be restrained by efforts to curb Medicare and Medicaid at the state and federal levels. Despite efforts to cut these government assistance programs, Medicaid will continue to be the leading payment source for elder care services, notes the study.
Medicare, on the other hand, will experience the fastest annual growth, according to the study, but that could all change depending on future legislative changes to the program.
Though skilled nursing facilities accounted for the largest share of revenues at 43%, state and federal efforts to shift Medicaid payments away from these facilities will foster faster growth among more cost-effective home and community-based services.
Continuing care revenues will also experience strong growth, the study notes, as an upturn in the housing market will provide more of an incentive to seniors looking to sell their homes to pay for the steep entry fees of continuing care facilities.
Written by Jason Oliva