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Fewer Seniors Live in Nursing Homes: What it Means.

Posted Dec 02 2008 6:26pm

An article in USA Today titled Fewer seniors live in nursing homes discusses how despite the graying of the nation, the percentage of elderly living in nursing homes has declined.

The article says this trend is the result of two factors: (1) the improved health of seniors and (2) more choices of care for the elderly. However, this has much more to do with the fact that family's have more choices than it has to do with the improved health of seniors. There are a LOT more elderly people in the USA than ever before so even though the elderly population may be healthier, that alone does not explain the decrease in nursing home popularity.

For example, the article mentions that about 7.4% of Americans aged 75 and older lived in nursing homes in 2006, compared with 10.2% in 1990.

According to US Census data,  in 1990, there were approximately 13,135,000 people over the age of 75 and in 2006 this number was estimated to be 18,263,307. This means, according to the USA Today article, that in 1990 there were 1,339,770  people age 75+ in nursing homes (10.2% of 75+ population) and in 2006 there were 1,351,485 (7.4%) people - about the same number as 1990.  Yet, the 75+ population grew by over 5 million people. I don't think that many seniors are that much healthier.

So where are these people going?

The answer is most are choosing other housing options (e.g., Assisted Living) or simply staying at home - and the economical impact of this is huge, especially when you consider that by 2030, there will be over 33 million people over the age of 75. This means that even if the percentage of people age 75+ in nursing homes drops to 5% by 2030, there will still be 24% more people in nursing than today. And this still leaves a big percentage of 31 million additional people over age 75 choosing other options.

And this means strong demand for "other" housing options like Assisted Living ( wonder why private equity likes this space? ). And it also means strong demand for in-home care services and all the related products and services.

What related products and services? The average cost of nursing home care is more than $67,000 a year and tops $100,000 in some urban areas - and a good percentage of this cost is for related products and services the elderly person will need as a part of their care .  So if an elderly person chooses to stay at home by using a home health care company or a non-medical home care company like ComforCare,  the family or the in-home agency will need to purchase many of these products and services including such things as home safety, pharmaceuticals, medical equipment, personal healthcare, mobility, etc.

And this will be a boom for the suppliers of these products and services. And this is why services like SeniorCareMarketer will be so valuable to the suppliers to help them generate publicity, website traffic and sales leads.

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