Post Acute Market Report

  • ID: 4421927
  • Report
  • 32 Pages
  • Health Industry Distributors Association (HIDA)
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The Market for Post-Acute Services is Expected to Grow at a CAGR of 14.0% to $500 Billion by 2024

Market At-A-Glance

The market for post-acute services is valued at $200 billion in 2017. This is expected to grow at a compound annual growth rate of 14.0% to $500 billion by 2024. The driving factor in post-acute market growth is increased life expectancy which has risen to 78.7 years. By 2050, the number of seniors seeking post-acute or home care services is expected to grow to 27 million, up from 8 million in 2012.

Skilled Nursing Medicare Margins Are Up, But Payer Mix Deteriorates

  • At $55 billion in 2016, Medicaid is the largest SNF payer, equaling 43.3% of total revenues. Medicare reimbursements are the second largest revenue source for SNFs, totaling $40 billion in 2016 and accounting for 31.5% of revenues. Over the years, Medicare margins have improved for SNF providers; however, shifts in the SNF payer mix have lowered the percentage of Medicare patients, negatively impacting revenues. These shifts have also introduced increasing numbers of lower-paying Medicare Advantage patients, putting profits under pressure.
  • Over the past 10 years, the number of Medicare Advantage patients grew 300% to more than 18 million.
  • These programs typically pay 20% less than traditional Medicare for the same services.
  • Because of this, some of the largest skilled nursing investors are exiting the industry.

Inpatient Rehabilitation Facilities Profit Margins Improving

  • Payments per case for inpatient rehabilitation facilities increased by 40% since 2004.
  • Over a similar period, this segment experience slower-than-expected growth in costs, resulting in improved profit margins.
  • From 1999 to 2015, Medicare margins grew 60% for inpatient rehab facilities.

Assisted Living Revenues Projected To Grow

  • By 2021, revenues for this segment are expected to grow 31%, up from $24.5 billion in 2016.
  • Occupancy has remained stable for assisted living facilities from 2001-2016; however, the number of facilities grew 24% over the same period, raising bed capacity by 45%. Continuing Care Retirement Communities Expect More Residents
  • By 2025, the number of daily residents in continuing care retirement communities (CCRCs) is projected to grow 49% to exceed one million. With the influx of new residents, revenues are expected to increase 25% over a similar period.
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1. 2017 Post-Acute Market Overview

2. SNFs, Health Systems Anticipate Collaboration, Not Consolidation

3. Discharges From Hospitals To Post-Acute Facilities Projected To Increase 60% By 2035

4. Seniors 85+ Twice As Likely To Need Post-Acute Services

5. Providers Struggle To Compete For Talent

6. SNF Numbers And Occupancy Remain Flat

7. Skilled Nursing Market Is Fragmented

8. Majority Of SNFs Are Freestanding And For Profit

9. Medicaid To Remain Largest SNF Payer Through 2021

10. Medicare Spending Growth Twice That Of Other Payers

11. Medicare And Medicaid Spend Per Patient Day Increases For Skilled Nursing

12. SNF Medicare Payments Higher Than Costs

13. Payer Mix Deterioration Erodes Profits

14. Patient Mix, Size Impact SNF Profitability

15. SNF Intensive Therapy Days Increase

  • Services For SNF Patients Include Assistance With Daily Activities, Incontinence
  • SNF Patient Volumes Projected To Increase, Despite Flat Occupancy
  • SNF Leaders Report More Short-Term Stays, Plan To Expand Amenities
  • Fewer 5-Star SNFs
  • SNF Shareholders Are Looking For Exits

16. $14.4 Billion In LTC M&A Deals In 2016

17. IRF Profits Increase While Number Of Facilities Remains Flat

  • IRF Profits Fueled By Payment Growth Outpacing Costs
  • IRF Stroke Patients Result In Lower Medicare Margins

18. LTAC Moratorium Ends In 2017

19. Assisted Living To Grow To $32 Billion By 2021

20. Increased Spending Anticipated For All

21. Assisted Living Payers Through 2021

22. Memory Care Investment Increases Despite High Out-Of-Pocket Costs

  • CCRC Occupancy To Grow 50% By 2025
  • GHX Reports $2.3 Billion In Post-Acute Sales Through The Distribution Channel In 2016
  • GHX Lists Top Post-Acute Care Products Sold Through Distribution
  • GHX Reports Post-Acute Care Sales By Segment

23. Definitions

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