Population changes have and will continue to be a huge source of future demand for Healthcare Sector products and services. The older population segment is growing (through increasing average life expectancy & baby boom generation) and becoming more chronically ill. The rise of chronic illness stems from unhealthy lifestyles that have produced significant demand for a variety of healthcare services and products. For example, 64 million Americans had a form of coronary heart disease in 2001 and use a variety of healthcare products from pharmaceuticals (cholesterol regulators), to equipment (pacemakers), to services (operative procedures). In addition, orthopedic devices will experience growth as lengthening lives lead to more joint replacements. Long-term care facilities can expect to become more specialized to target this population segment as well. Given the continued growth of this demographic segment, the demand for the healthcare industry’s products will progressively increase. Although, the population segment over 65 represents only 12% of the US population, it represents 40% of total healthcare expenditures.
Healthcare costs have been consistently outpacing inflation, at 9.3% in 2002. The facilities industry is experiencing costs rising 10% per bed due to increasing operating expenses and increasing malpractice insurance costs. Combined with declining hospital capacity (-1.1% in 2003), increased focus on consumer adoption of IT, and increased focus on quality care and preventative measures, there is significant pressure for upward moving prices. ustry.
Cost Pressures (Government, Managed Care, Individual Buyers)
Since the government and managed care are significant sources of healthcare demand (through Medicare (for elderly)/Medicaid (for poor) programs and health insurance plans), their deficits/declining financial positions indicates an even heavier focus on healthcare cost cutting. In 2003, the government... [continues]
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