Home Healthcare: United States

Home healthcare services will provide rapid growth since a greater number of the elderly wish to remain at home and regulatory changes will improve access to home-based care.

Revenues to rise 6.3% annually through 2018

The elder care service industry is comprised of skilled nursing facilities, home healthcare agencies, social services agencies, continuing care facilities, and assisted living facilities. Revenues for these elder care service providers are expected to grow 6.3 percent per year, to near $400 billion in 2018. Gains will be driven by demographic changes, in-cluding higher numbers of the “baby boom” generation entering their re-tirement years and longer life expectancies. Growth will be further fueled by modified federal regulations, par-ticularly regarding Medicare and Medicaid payments, which will allow for more flexibility in payment options and more service choices for patients.

As the prices of services are forecast to continue rising through the forecast period, revenue gains will benefit from increased payments per patient. However, growth will be restrained by a reduced pool of con-sumers able to afford the services if they are not covered by Medicare, Medicaid, or some other insurance platform. Efforts at the state and federal level aim to curb Medicare and Medicaid expenditures through reductions in reimbursements and other cost control measures. Still, the 2010 Patient Protection and Affordable Care Act has aided elder care services in that, among other things, it allows states to extend Medicaid eligibility and expand Medi-caid support for home and community-based elder care services.

Home healthcare services to provide fastest growth

In 2013, skilled nursing facilities accounted for the largest share of elder care service revenues with 42 percent of the total. However, home healthcare agencies are projected to see the fastest growth, accounting for 35 percent of total additional elder care revenues through 2018. Gains will be driven by the shift in preference among the older population to age at home, as well as by regulatory changes that improve access to home-based care. Social services will also see rapidly increasing demand with the growing availability of home- and community-based Medicaid waivers to pay for them.

Medicare, Medicaid to remain top sources of coverage, reimbursements

Government programs remain the leading payment source for the elder care service industry. Medicaid and Medicare combined to account for 58 percent of payments for elder care services in 2013. This dominance makes the elder care services indus-try highly reliant on and reactive to changes in coverage, reimbursement rates, or eligibility. Out-of-pocket expenditures continue to be essential for continuing care communities, assisted living facilities, and most social services, since many non-medical care costs are not covered by Medicare or Medicaid.

Study coverage

This Freedonia industry study, Elder Care Services, presents historical demand data (2003, 2008 and 2013) and forecasts (2018 and 2023) by product (e.g., skilled nursing care facilities, home healthcare services, social services, continuing care retirement communities, assisted living facilities), provider (for-profit, nonprofit), payment source (e.g., Medicaid, Medicare, out-of-pocket, private insurance) and US region. The study also considers market environment factors, details industry structure, evaluates company market share, and profiles 39 industry players, including Manor Care, Brookdale Senior Living, and Kindred Healthcare.

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