With the life expectancy of Americans now over 78 years, demand for long term care facilities is strong and future prospects continue to look positive for services such as assisted living, nursing homes and home care, according to Kalorama Information’s new report, “Long Term Care Market: Nursing Homes, Home Care, Hospice Care, and Assisted Living.” The healthcare market research publisher estimated the long-term care market in the U.S. to be $258 billion in 2010.
In 1900, U.S. life expectancy was 47 years and it rose to 76 years in the 20th century. Now the Centers for Disease Control Vital Signs puts life expectancy at over 78.2 years of age. But the Kalorama report notes that this high life expectancy statistic could be misleading, especially where gender is considered.
“Life expectancy is an averaged statistic and thus it doesn’t tell the full story,” said Bruce Carlson, publisher of Kalorama Information. “For men the average age is 76, but for women, it’s over 80 years of age. Elderly women thus have a higher chance of being widowed and, absent another caregiver, may require outside care."
[See related stories: Gender delineation seen in medical spending; despite healthcare spending, Americans lag in life expectancy]
According to Kalorama, home care and assisted living services have experienced the highest rate of growth and will continue to do so as the elderly population increases. Overall the market is expected to grow an average of 5 to 6 percent annually for the next five years.
A key driver for sales of long term care services is the offering of a continuum of care. The average patient may start with some home care assistance. At a certain point, however, the elderly require a level of care that exceeds what can be comfortably met through home care. As this occurs, residential assisted living may be considered as an option to provide care, ensure safety and improve quality of life.
The last step in this progression represents the move from assisted living or a family member’s home to a residential nursing facility. It usually occurs when the individual’s degree of impairment becomes such that he or she needs continuous supervision and/or help with a large number of activities of daily living. Many assisted living companies have nursing care facilities attached so that they can offer all services.
“In long term care, demand is not a problem, so the revenue will go to whoever can provide the service most efficiently and it will hinge on the ability of the industry and patients to maintain the commitment of payors to reimburse costs,” Carlson said.