Although the full effect of the Affordable Care Act on the health care industry remains uncertain, the favorable demographic trends driving the industry’s growth through the long term are clear. The protracted growth in the older age cohorts, due to the aging baby boomer population, has long been anticipated and will result in substantial increases in demand for health care services during the next two decades. According to the Census Bureau, the 65+ age cohort’s share of the total population will surge from 13.7% in 2012 to more than 20% by 2029. During this period, the 65+ age cohort will increase by an average of 3.0% per year, compared with an average annual growth rate for the total population of 0.7% during the same period. This growth will result in the number of people aged 65+ increasing by nearly 30 million by 2030.
The implications of this growth for the health care industry and the medical office market are significant due to higher medical usage rates among the older age cohorts. According to the Centers for Disease Control, the number of annual physician office visits per 100 people increases from 371 for the 45-64 year-old cohort to 624 among the 65-74 year-old population and 715 among the 75+ year-old population. Given the underlying demographic trends, the medical office market is poised to expand significantly during the next two decades in order to serve this rapidly growing, high-demand portion of the patient base.
For a detailed analysis of and outlook for the U.S. healthcare industry and medical office market, please see Colliers’ Medical Office Trends and 2014 Outlook.