The US senior population is booming, driving explosive growth in home and post-acute care. Programs like PACE are expanding fast, offering innovative, in-home solutions and digital health advancements. This shift presents huge opportunities for healthcare providers to lead the future of senior care.
The US senior citizen population is reaching a historic height of over 60 million people, and specifically the population of Americans aged 80+ is projected to increase by a remarkable 47% to 82 million towards the year 2050, which has spawned a new term called The Great Geriatrification of society - not seen in our country’s 248-year history. As a result of this aging evolution, there is a revolutionary demand for non-acute care and post-acute care throughout the provider continuum of the healthcare industry. A foundational example of this seismic shift can be seen in the volume of home health care, palliative care, and PACE programs (programs for all-inclusive care of the elderly), as well as the increase in average daily census for hospice programs providing end-of-life services. Over the last 12 years, patient counts in the PACE sector alone have nearly tripled, and this trend is projected to continue over the next two decades. This unprecedented growth, which mirrors our aging society, represents an enormous opportunity for the post-acute sector of healthcare, and specifically the blossoming PACE avenue, to continue expanding its reach and impact with more innovative strategies, driving more effective solutions.
The US home care market, along with PACE programs, is expected to more than double from a market-cap of $100 billion in 2016 to an impressive $225 billion by 2025. This substantial growth underscores the increasing preference for in-home care and the integration of digital health technologies, such as telehealth, telemonitoring, and wearable healthcare technology, positioning PACE and home health at the forefront of the industry’s new horizon with accelerating change. Since the turn of the 20th century and through the baby boom era, population trends have steadily grown, though during the COVID pandemic, for the first time in generations, the Brookings Institute and the US Census Bureau have both reported a flatline trend in overall population growth coming to a stall, resulting in a projection by 2045 of deaths outpacing births. This reverse growth trend will lead to the US Population starting its decline by the year 2080. This new reality is already starting to be noticed in the healthcare ecosystem by which labor & delivery departments in several regions of the country are reducing staff or closing, while census for long-term care facilities, home health, PACE, and hospice providers are seeing record growth and excessive demand. This societal population shift is not unique to the US. This same population decline is facing most developed economies, such as the European Union, Japan, and South Korea, which all recorded natural population decline in recent years, along with the largest percentage of senior citizens on record. Consequently, this reactionary pivot within the US healthcare system will also have parallel impacts globally.
Legislative Changes Paving the Way for Future PACE Programs & Hospital-At-Home Models
In 2024 and 2025, an increasing number of states are passing legislation allowing for the creation of PACE programs, including my home state - Illinois, which will begin operating PACE services this year. PACE and several expanding post-acute care continuum services will further integrate into umbrella structures by visionary aggregators, both non-profit and for-profit, in an expansion of what was traditionally among the smallest sectors of healthcare. The most effective and successful of these organizations will balloon into nine-figure portfolio enterprises. The demand for healthcare leadership and competent operations executives will outpace the current market supply, in tandem with the largest wave of retirements seen in recorded history leading to warp speed succession planning. This is where the biggest opportunity exists for talent advisory firms to play a partnering role as well-positioned solutions providers.
As of today, PACE programs are actively operating in 32 states and the District of Columbia, and the number is steadily increasing. This growth is a testament to the effectiveness of PACE programs providing comprehensive medical and social services to certain frail, community-dwelling elderly. With new programs continually opening, PACE is set to become an increasingly integral part of healthcare provision, offering preventative, acute, and long-term care to more and more communities across the United States. One unexpected yet positive realization is the gift of adding risk assessment and SDH (social determinants of health) scores to previously marginalized at-risk populations who suffer inequalities for access to quality care, food insecurity, medical transport insufficiency, anemic specialized care and clinical trials participation, and community safety challenges from violence and abuse. By expanding care to all deserving citizens regardless of their ability to pay, PACE programs and home health care speed up the early detection of life-threatening conditions before they become chronic and fatal, which also decreases the financial burden on the system. Perhaps the #1 imperative offering exponential improvement is that of diabetes screening and dietary education, which has been proven to reduce the vast size of pre-diabetic population that currently exists under the radar. Such exorbitant cost of care for this future population could be significantly reduced, which would also decrease spending down the road, since diabetes care is the most expensive chronic illness among the major disease categories, accounting for one in four healthcare dollars spent. A recent study by the American Diabetes Association estimates that the total cost of diagnosed diabetes in the U.S. was $412.9 billion in 2023, with $306.6 billion in direct medical costs and $106.3 billion in indirect costs.
Large integrated health systems and delivery networks are keenly taking notice about the hundreds of millions in revenue leaving their traditional acute care hospital environments. The highly strategic organizations are already adapting and innovating in order to meet the patient at the future intersection of where they seek care, both from a cost-of-care and preference standpoint, as well as to implement initiatives designed to capture the leakage they’re experiencing as a byproduct of hemorrhaging profits. While The Center for Medicare & Medicaid Services (CMS) allows health systems to apply for waivers to be reimbursed for hospital-at-home care, not all state Medicaid programs cover the care model. As of May 2024, *11 states reimburse for hospital at home, according to the State Campaign for Hospital at Home, and several more are in the process of joining the quickly expanding trend. (*AZ, AR, FL, MA, MI, NY, NC, OK, OR, SC, & SD)
A Shift In Care Environments From Acute to In-Home Care
According to recent reports, since the start of the COVID-19 pandemic, more than 300 nursing homes have closed across the country due to understaffing. In addition, up to 40 percent of nursing home residents are living in facilities that are financially at risk of closure, underscoring the importance of alternative care solutions. To make matters more challenging and dire, the rate of rural community critical access hospitals closing has reached all-time highs, which makes access to care an inequality in several states located among the less populated regions of the nation.
As nursing homes face closures and staffing challenges, states view PACE programs as a more efficient and cost-effective solution and approach to keeping the elderly engaged and active during the day with supervision while remaining at their home residence. This shift of care to in-home settings is lighting a spark to flip the balance of power from the institutions of care to those who will decide who is welcome into their homes. This evolution revolution is truly being driven by consumerism healthcare.
Recently, I read with great interest the Becker's Healthcare article on Cleveland Clinic's 'Hospital At Home' model in northern Florida that is delivering similar levels of patient experience as their traditional acute care environments. Based on these positive results, they are strategically planning to double the program within the next year, and may bring the program to their core Ohio service market in the future. Part of their success is attributed to utilizing local community relationships with existing healthcare service organizations as a win-win partnership. This innovative model is quickly expanding across the country at other forward-thinking integrated provider organizations such as Mass General Brigham, in order to meet the preferences of healthcare consumerism and the aging population creating a demand for transition of care to post-acute environments from in-patient settings.
As this post-acute evolution revolution picks up speed, scores of forward-thinking organizations are implementing strategic plans that establish collaborative initiatives with health systems and care delivery networks as a key partner in their regional service markets. Those institutions that are leading the charge and answering the consumer-driven shift will survive and thrive, while other organizations who continue to ignore the vacuum sound and remain determined to operate in the old model will either no longer exist in the future as they are structured today or they will be ripe for acquisition by the larger aggregators who are in a strong position to drive care coordination both inside and outside of the hospital environment. The larger organizations who excel will be the attractive suitors to the large health plans and government programs (Medicare & Medicaid), which further drives the industry towards increasing consolidation and smaller inner circles of visionary decision makers. One outcome is certain, US healthcare will never look the same again – and perhaps that’s for the best. If it’s broken, change it – and while it’s being changed, then it’s a great opportunity to fix it as well.
