Growing Aging Population a Myth? Yes According to This Analyst.

An article Home Healthcare Industry: Ghosts in the Demographic Machine written by a stock analyst argues that the aging population "has not played—nor will play for a while—a meaningful role in the incredible growth by home healthcare agencies (HHAs)."

The article was written from an investment perspective and the author suggests not to invest in this industry because in his opinion the growing aging population is a myth and does not support the dramatic growth of HHAs.

I don't fully understand how he comes to that conclusion and I cannot completely grasp his number crunching which leaves me a little suspicious of his predictions. But the article is certainly interesting and worth a short read.

But I do disagree with the logic he uses to show that the number of people using home health care is not really increasing.

His data for the growth of HHA comes from "Admissions" and Medicare filings. However, a significant number of home health care purchases never involve medicare (not always covered) and there are no formal admissions that can be tracked with any level of accuracy.

If I purchase the services of a home care company (one of the fastest growing segments of the home health market) to visit the home of my aging loved one for a day, a week or even as a full time live-in, medicare or any other national reporting entity will never know about it. So, it is difficult to measure the growth in these companies except by  what we see in the market and what we see is major growth.

Does the author of the article not include home care companies as a significant component to "home health"?  It wasn't clear in his analysis.

Another fact that the author may have overlooked is the dramatic shift in attitudes amongst Boomers about residential care (Assisted Living, Nursing homes) versus home health care. Increasing number of people shun the former in favor of the latter and this will result in more older people choosing home health in coming years so even if the author's numbers are correct about the number of older American's not really increasing the percentage choosing home care will increase.  

Anyway, give the article a read - it's worth it.

Comments

[James Watson]

I wrote a blog in response to this article. You may like to check it out:

http://www.premierhomecareservices.com/blog/premier-homecare-services-blog/demographics-debunked-%e2%80%93-thinking-critically-of-growth-in-the-senior-care-industry/