A spate of recent transactions underscored the increasing focus on home healthcare, an understandable and sensible pivot given the aging U.S. population and the desire of American seniors to age in place.
First, the Walgreens Boots Alliance announced in August 2022 that it had purchased a majority share of the home-centered platform CareCentrix for $330 million. The following month CVS made public its $8 billion purchase of Signify Health, which dispatches clinicians in the same manner Uber provides drivers. And finally, in early October, Texas-based Addus HomeCare Corporation acquired Apple Home Healthcare for an undisclosed sum.
While some observers have said this is reflective of the continuing desire for convenience that took root in the early stages of the pandemic, it seems more a response to what has been labeled “the Silver Tsunami” – i.e., the graying of America.
Roughly 10,000 Baby Boomers are turning 65 every day, and that will be the case until 2030, at which point every Boomer will be at least that old. They will, in fact, comprise approximately 20 percent of the American population by that point. Put another way, there are expected to be more Americans over the age of 65 than under the age of 17 by 2035, the first time that has ever been the case.
A 2021 study undertaken by the AARP showed that roughly three of every four people over the age of 50 prefer to remain in their homes as long as possible, thus preserving their dignity and independence, not to mention their bank accounts. The average cost of a private room in a nursing home is $297 per day, while the cost of a semi-private room runs $260 a day.
But a September 2022 Washington Post article underscored how difficult it is to age in place. While profiling the struggles of a senior couple in Minnesota, the author of the piece, Christopher Rowland, cited statistics that showed nine of every 10 home healthcare patients need help with everyday tasks like bathing, dressing, getting in and out of bed and using the toilet. Two of every three need help eating.
At the same time, Rowland wrote, there is a shortage of home healthcare workers, one that only promises to grow more acute as the Silver Tsunami gains momentum. There are an estimated 2.6 million such workers across the country, though that is far from an exact number. Many have fled the sector for less-difficult jobs that pay as much (if not more) than the $14.27-per-hour average those in the home healthcare industry net.
Moreover, there is going to be a need for an additional one million workers by 2030.
Keith Crownover, associate partner at the healthcare mergers and acquisitions advisory firm Stoneridge Partners, told Health Tech Magazine that the home care industry “has been automated to a high degree since the mid-1990s,” a trend that must continue in order to meet the growing demand, while also enhancing efficiency, easing workflows and improving outcomes.
Certainly the aforementioned sales and mergers would only further home healthcare’s digital transformation, one that has seen increasing use of such solutions as cloud computing, videoconferencing platforms and remote patient monitoring.
More to come, no doubt. It will, in fact, be a necessity, given the needs facing the home healthcare sector in the years to come.