The share of Americans aged 65 and older will grow from about one in seven of the population today to one in five by 2060, according to Census Bureau projections, an increase from 43.1 million to 92 million. The share of those 85 and older will triple, from 5.9 million to 18.2 million people. The Department of Health and Human Services estimates that about 60 percent of seniors will need at least some kind of long-term care during their lifetime and more than 40 percent will need to be cared for in a nursing home at some time. It seems inevitable that senior care will grow in importance as an industry.
While some elder care is paid for privately by families, much of the funding comes from from Medicare and Medicaid. Therefore, the factor that adds the greatest element of uncertainty to the outlook for the industry is the future funding of these entitlement programs. When political candidates talk about the need to rein in federal spending, these programs are frequently offered as targets.
Of the occupations offering services for the elderly and persons with disabilities, the fastest growing will be those offering care in the home. This will happen partly because seniors will prefer to live independently as long as possible and partly because federal efforts to reduce health-care costs will encourage home care and assisted living as opposed to nursing-home care. Advances in technology also will help this trend. The number of personal care aides who serve this industry is projected to increase by 36 percent, or 881,000 workers, through 2028. For home health aides, the projected increase is 37 percent, or 304,800 workers, in that same time frame.
In addition to workforce growth, employee turnover is always a factor in the number of job openings that become available. Workers who care for seniors in their homes are notorious for their high rate of turnover. The jobs require few skills and pay low, so workers have only a small investment in staying. Additional discouragements are the amount of driving required, the lack of extra pay for overtime work in many states, and the fact that around 85 percent of home health providers have reported experiencing at least one work-related injury.
Many home-care workers are employed by franchises; home care is recognized as one of the fastest growing and most profitable types of franchise business. The market research firm, IBISWorld, estimated that 9,150 such franchised firms were operating in 2018, employing 364,521 workers. The aging Baby Boomer demographic was expected to propel demand in this market through 2023, following the 9.2 percent annual growth that already had occurred between 2013 and 2018.
Much personal and health care for seniors presently takes place in assisted-living facilities. The Medicaid expenditures required for one person in a nursing home can support almost three in assisted living. As a result, many states are changing their Medicaid laws so support can go not only to nursing home residents but also to those in assisted living. This trend is expected to increase the population receiving care in assisted living. IBISWorld revealed that 3.6 percent annual growth had occurred in the retirement communities industry between 2013 and 2018. The firm anticipated that this trend would continue through 2023, thanks to economic growth, healthcare reform, an aging population, and the introduction of new services.
Apart from personal care and home health aides, other occupations are projected to experience strong growth within this industry. Employment for nursing aides, orderlies, and attendants is projected to grow by 9 percent, or 137,800 workers, through 2028. Social workers and counselors of all kinds will experience 11 percent employment growth, or 81,200 workers. Registered nurses will experience 12 percent employment growth, or 371,500 workers.
Hospice care seems likely to be an area of growth as seniors increasingly become aware of this relatively new option for end-of-life care and as a way of reducing health-care costs. Patients in their last year of life represent approximately 5 percent of Medicare recipients, yet account for one-quarter of Medicare expenditures. Hospice care has been shown to reduce Medicare expenditures for these patients, as well as reducing anxiety and depression among the patients and their families.
Nursing homes served as a major source of infection during the coronavirus pandemic from the early days in 2020 until elder care professionals recognized the risk and took steps to mitigate it. With their residents and patients in high-risk categories and many with weakened immune systems, nursing homes enabled fast spread of the coronavirus. In some states, such as New York, government policy early in the pandemic prohibited nursing homes from turning away new patients who were or might have already been infected, contributing to a large number of deaths, before experts better understood how the disease spread.
For in-home caregivers, following social distancing, quarantining, and lockdown protocols plus taking precautions such as wearing a mask, reduced risk for both the patient and the professional. Those employed in nursing homes or other care facilities were deemed essential employees and continued to work as safely as possible throughout the pandemic.
The COVID-19 vaccines rolled out in early 2021 and nursing home residents across the U.S. have been among the first groups to be vaccinated. Nursing home and elder care workers have also been priorities for receiving the vaccine. According to research group IBISWorld, revenue for nursing care facilities was expected to decline only slightly in 2020 due to a nearly $5 billion infusion of relief funds given directly to skilled nursing facilities. In fact, the elderly and disabled services industry was projected to have an increase in revenue of 1.6 percent in 2020, in spite of the pandemic. Growth is expected to pick up in the U.S. nursing care facilities industry through 2025 because the baby boomer population continues to age, requiring nursing care and elder care services. There is also an anticipated increase in at-home managed care services for the elderly, as the government seeks ways to "contain rising health care costs."