We soon will have more older people than children and more people at extreme old age than ever before. The number of people aged 65 or older is projected to grow from an estimated 524 million in 2010 to nearly 1.5 billion in 2050, with most of the increase in developing countries.
The Aging Population
- In 2010, an estimated 524 million people were aged 65 or older – 8% of the worlds population. By 2050, this number is expected to nearly triple to about 1.5 billion, representing 16 percent of the world’s population
- This remarkable phenomenon is being driven by declines in fertility and improvements in longevity. With fewer children entering the population and people living longer, older people are making up an increasing share of the total population
- one of the major epidemiologic trends of the current century is the rise of chronic and degenerative diseases in countries throughout the world— regardless of income level.
- Over the next 10 to 15 years, people in every world region will suffer more death and disability from such noncommunicable diseases as heart disease, cancer, and diabetes than from infectious and parasitic diseases
- Major risk factors include physical inactivity, current tobacco use, heavy alcohol consumption, a high-risk waist-hip ratio, hypertension, and obesity
- The future need for long-term care services (both formal and informal) will largely be determined by changes in the absolute number of people in the oldest age groups coupled with trends in disability rates.
Drivers for the Aging Population
- Increases in life expectancy as a major driver of ageing: most changes in life expectancy occur because of changes in senescent mortality, namely the effect of ageing, which can be postponed by medical intervention
- Declining fertility: economic development and industrialisation (rising wealth, improvements in material conditions, healthcare, lifestyles and wider availability of birth-control measures), changes in values (reduced demand for children, shifting priorities), and higher education and employment rates, particularly for women
growth (driven by
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declining mortality (due
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Impact of an Aging Population
- As the population ages, and even shrinks, in mature economies and the ability to use debt is limited, governments may come under pressure to raise taxes to maintain social programs.
- Health systems may need to be re-engineered (and paid for) to handle many more participants in economies which will often see declining GDP.
- The workforce may need to be retooled in all parts of the world: in the aging
- economies, older workers will need to learn new skills and work longer, and their work may have to be supplemented by migrant populations. In emerging growth markets, the gaps between supply and demand for those with university-level education will have to be filled.
Aging Population Value Chain
- Nursing Homes Nursing homes or centres are essentially long-term care facilities for elderly people who are completely dependent on caregivers. Licensed nurses are available 24/7 to provide a high level of medical care and professional assistance.
- Assisted Living Also referred to as personal care homes, assisted care communities are ideal for individuals who are not capable of living safely on their own, but are not so dependent that they need the high level of care found in nursing homes
- Memory Care Many of these facilities facilities provide a dedicated area for people with Alzheimer’s or dementia, though there are some facilities that exclusively handle seniors with impaired memory
- Senior Independent Living Communities: Also known as retirement communities or congregate care, independent living communities are ideal for those with few medical problems who are still strong enough to live independently.
- Residential Care Homes: These are essentially private homes designed to serve seniors living together in a private and home-like setting
- Home Care: This kind of care allows the elderly to continue enjoying the comfort and independence of staying in their own homes
- Medicare: is a federal program that provides health coverage if you are 65+ or under 65 and have a disability, no matter your income
- Medicaid: is a state and federal program that provides health coverage if you have a very low income
- The growth of the elderly population will drive changes in the composition of government services. Cause the demand for many services catering to the elderly to rise while, with fewer schoolage children in many states, the demand for education and youth and child welfare services will fall
- Better transportation services and aggressively screening older drivers to make sure they can safely operate motor vehicles
- Law enforcement is another area likely to see major adjustments, such as increased attention to preventing and investigating crimes and frauds against the elderly
- Elder care: Home health care costs much less than nursing home or hospital care, and technological advances have made it as effective as hospital care for many treatment
- Not only is the average Medicare home health service expenditure lower, but it also increased at a much slower rate than nursing home care between 1992 and 2002
CAGR Growth of Segments
- Global long term care market size is expected to reach USD 1.7 trillion by 2027, expanding at a CAGR of 7.1%
- The U.S. hospice market size is expected to reach USD 63.7 billion by 2026. It is projected to register a CAGR of 9.0% over the forecast period
- National health spending is projected to grow at an average annual rate of 5.4 percent for 2019-28 and to reach $6.2 trillion by 2028.
- Medicare is expected to experience the fastest spending growth (7.6 percent per year over 2019-28), largely as a result of having the highest projected enrollment growth.
- Over 2024-28, Medicaid spending is projected to grow slightly faster at 5.8 percent on average related to the expiration of reductions to disproportionate share hospital payments during 2025 and a progressively higher share of enrollment attributable to aged and disabled beneficiaries, who tend to utilize a greater number of, and more costly, services.
- Over 2024-28, growth in physician and clinical services is projected to average 5.6 percent per year. During this period, growth in Medicare spending on physician and clinical services is anticipated to be faster than growth in private health insurance spending on the sector largely due to relatively higher enrollment growth as the shift of the baby-boom generation from private health insurance into Medicare continues
- The nursing care held the largest share in the service segment of the long term care market attributed to the presence of a large number of facilities offering nursing care, medical supervision, and round the clock assistance
- The home healthcare segment is expected to witness high growth in developing nations owing to increasing need for geriatric care, presence of double-income households, and ongoing social changes
- Hospice is the fastest growing segment owing to the increasing incidence rate of Alzheimer’s and dementia and an increase in post-hospital care. Moreover, the coverage offered by both Medicaid and private insurers has relieved residents from out-of-pocket payments that have to be borne by them
|Care period||Typically long term||Short term (six months or less, with renewals possible)|
|Financials||Medicaid, private insurance, Veterans Health Administration, long-term care insurance, life insurance, self (or a combination)||Medicare, Veterans Health Administration, Medicaid (in most states), private insurance, community sources, self (or a combination)|
|Daily living activities such as feeding and laundry||Yes||Usually no but should be arranged separately|
|Focus on getting better?||Medication for ongoing conditions can be given, and residents can visit doctors for treatment (usually offsite)||No, focus is on comfort, pain management and dignity, among others. However, hospice is not irreversible. It can be stopped if the patient decides to seek treatment for the condition.|