As the “baby boom” generation approaches retirement, the demand for senior care services will rise and will drive industry revenue, according to a study from Freedonia Group, Inc., a Cleveland-based market research firm.
Revenues for senior care services are expected to grow 5.2% annually and reach $319.5 billion through 2016, according to the Freedonia Group’s Elder Care Services report.
While skilled nursing facilities accounted for the largest share of senior care revenues in 2011 with 43%, home- and community-based services, such as home healthcare and assisted living, are expected to achieve the fastest growth.
Advances for these services will be driven by continued efforts to draw Medicaid payments away from skilled nursing, says the report, often by limiting reimbursements or directing patients to less expensive forms of care.
Despite the general consensus that many Americans will want to age at home, the study suggests revenues for continuing care will experience strong growth given an upturn in the housing market.
Increased progress toward recovery for the housing industry will encourage older Americans to sell their homes, which they can use the proceeds to pay for steep entry fees associated with continuing care communities.
Additionally, for-profit entities accounted for 66% of elder care services in 2011, which the study notes benefitted from dominance in the skilled nursing segment and its leading positions in the home health and assisted living markets.
On the other hand, nonprofits accounted for the larger share of revenue in both the continuing care and social services markets.
Written by Jason Oliva