In the mid 1950’s, the U.S. experienced 76 million births. Life expectancy increased in recent years due to advanced technologies in healthcare, especially through medicine and nutrition. Hence demand for this industry is expected to grow, irrespective of economic or market conditions. By 2030, the global population of people over the age of 60 is expected to increase to 1.5 billion. The world economy will take notice of the aging population as nations will care for their elderly.
The “Senior Care” industry is composed of healthcare agencies, nursing homes, social services agencies, and assisted living facilities. In 2018, this sector’s revenue grew to nearly $400 billion — a 6.3% gain from its previous years. Demand for this industry is expected to grow as “Baby Boomer” generation will soon enter their retirement age and the U.S. market will reach $225 billion by 2024. Furthermore, growth is especially fueled by federal regulations regarding medicare and medicaid payments, which will bring flexibility in payment solutions and offer more service options for patients.
A person becomes a senior citizen at the age of 65. Population Reference Bureau estimates that Americans aged 65 or older will grow to 98 million by 2060. That’s 24% of the world’s total population. Traditionally, immediate or extended family members held the sole responsibility to care for their elders. However, studies have shown that U.S. businesses have lost $33.6 billion each year in productivity due to employees who were also part-time caregivers. Therefore, senior care companies have become in-demand for family members to relieve their burden of caring for their elderly loved ones.
While senior care businesses are expected to increase, finding qualified employees might be a bit more difficult to process. A report called Getting to 2025: A Roadmap for the Senior Living Industry finds that to keep up with Baby Boomers’ retirement age, the senior care industry must hire 1.2 million new employees by 2025. It also has to create attractive work cultures, address regulatory changes, and roadmap successful career paths. On top of this, the senior care industry will most likely compete with other healthcare and service sectors in finding qualified employees. Hence, it’ll require innovative approaches to attract new workers.
- American Senior Communities reports that people aged 85 years or older will triple from 5.7 million to 14.1 by 2040.
- Population Reference Bureau finds that Americans ages 65 and older requiring home care facilities will go up by 75%, or 2.3 million, by the year 2030.
- According to American Senior Communities, females in their 80’s who live independently are considered a typical “assisted living resident”.
- The Family Caregiver Alliance reports that only one in four people ages 45 and above are prepared for long-term care financially.
- A study done by Genworth Financial shows that regarding long-term care, more than 50% of people find it burdensome to their family members.
Investment in Elderly Care Industry
To race along the fast-paced growth of the elderly care industry, top Silicon Valley venture capitalists are looking to back the caregiving marketplace. Oxford Economics quotes, “The so-called longevity economy, which services the needs of Americans over 50, is currently a $7.1 trillion market.” Well-known firms like True Link Financial, Andreessen Horowitz, and Kapor Capital are also putting their investment funds into tech startups trying to disrupt the senior care industry. However, keep note that this sector isn’t a get-rich-quick scheme. Investors looking to make quick gains should look elsewhere, as the aging economy won’t expect overnight results.
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