The aging of the U.S. population should keep demand for elder care services growing.
Total revenue for skilled nursing home services, home health care, continuing care and assisted living facility stays could increase an average of 5.2 percent per year over the next few years, to about $320 billion by 2016, according to analysts at the Freedonia Group.
The Freedonia Group — a real market analysis firm based in Cleveland, not a fictional company in the Marx Brothers’ fictional land of Freedonia — said in a recent report that revenue should grow in spite of state and federal efforts to restrict spending on elder care.
The government will be encouraging more frail older people and older people with disabilities to get care at home and in the community, and to rely as much as possible on informal help from friends and relatives, the analysts said.
The government may have trouble increasing use of informal care beyond a certain point, because “a growing number of older adults either do not have family who are able to care for them, or simply prefer using professional care,” the analysts said.
But the push to control elder care costs means home health care spending and community-based care spending will probably grow faster than spending on nursing home care, the analysts said.
In a separate report, on the world home medical equipment market, the Freedonia analysts have said cost-management programs could help worldwide spending on home medical equipment and other home patient support equipment, such as wheelchairs and bathroom safety products, grow faster than elder care spending.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance, said in a response to the Freedonia forecast that continuing growth in demand for elder care will place an enormous burden on families.
“Medicare and Medicaid will not be able to carry the burden without seeking additional tax revenue or forcing states to reduce allocations to other programs such as education,” Slome said. “You just can’t have everything unless someone is willing and able to pay.”
Families that want to avoid entrusting the care of their loved ones to cash-strapped public programs must think about private long-term care insurance and other private long-term care financing options, Slome said.