Long-Term Care (LTC) Market

Market Overview

The global long-term care (LTC) market size was valued at USD 1,055.30 billion in 2022. It is estimated to reach USD 1,925.48 billion by 2031, growing at a CAGR of 6.91% during the forecast period (2023–2031).

Long-term care encompasses a variety of services intended to satisfy a person's health or personal care needs over a short or extended period. Long-term care (LTC) helps individuals with functional or cognitive limitations perform activities of daily living (ADLs), such as walking, grooming, bathing, dressing, eating, utilizing the restroom, and moving. Depending on a person's needs, caregivers provide long-term care in various locations.

Unpaid family members and friends at home give most long-term care. It may also be delivered in a nursing home or public setting, such as an adult daycare facility. Community services, including meals, adult day care, and transportation, are also a part of long-term care. Long-term care is frequently necessary when a person has a serious, enduring health condition or disability. A heart attack or stroke may necessitate long-term care immediately. However, it usually develops gradually due to a person's advancing age, weakness, or the progression of an illness or disability.

Highlights

• Nursing care dominates theservice segment
• North America is the highest shareholder in the global market

Market Dynamics

Global Long-Term Care (LTC) Market Drivers

Growing Geriatric Population

Advancements in modern medicine and the healthcare industry have increased life expectancy, so most individuals can expect to live in their sixties and beyond. According to WHO, as of February 2018, the number of individuals aged 80 and above was 125 million, expected to increase to 434 million by 2050. The population aging rate is increasing drastically globally, especially in high-income countries.

Only six countries—China, the United States, India, Japan, Germany, and the Russian Federation—are home to more than 54% of the world's elderly population. As a result, there is more pressure on the governments of these nations to provide care services for their citizens while balancing labor force participation and preserving their economies. Several nations' governments are overhauling their healthcare systems to offer senior citizens the care they require at reasonable costs. The American government supports LTC for seniors through the Medicare and Medicaid programs. These aspects are expected to fuel the growth of the LTC market over the forecast period.

Increasing Employment of Women

Traditionally, women took care of the elders in the house; however, with modernization and the need for higher income, women's employment has increased. This has created the need for formal care for elders in the house. Increased nuclear families have also contributed to the growing demand for LTC. According to International Labour Organization (ILO), in 2018, around 606 million working-age women did not seek a job due to unpaid care work compared to only 41 million men inactive for the same reason.

Additionally, there has been an increase in the number of employed women globally, especially in developed countries. For instance, according to the U.S. Bureau of Labor Statistics, women's participation in the U.S. labor market almost doubled from 1950 to 2016. Even though there are benefits to more women working, such as an increase in the family's annual income, it also increases the need for elderly caregivers, which drives up the demand for long-term care services.

Global Long-Term Care (LTC) Market Restraints

Stringent Regulations

Stringent government regulations by the U.S. government to start and expand long-term care facilities will likely pressure the established and new entrants. Various federal and state laws regulate nursing homes and assisted living facilities. For instance, according to the Nursing Home Reform Act, the facility must provide services and activities to maintain every resident's highest level of practicable mental, physical, and psychosocial well-being per the written Plan of Care (POC). Similarly, LTC facilities must comply with federal requirements to participate in Medicaid and Medicare. Hence, stringent regulations for nursing homes and assisted living facilities will likely drive the market during the forecast period.

Global Long-Term Care (LTC) Market Opportunities

Technological Development

The expansion of services on the global market is mostly due to technological advancements in the long-term care sector. The market is expected to grow because of the development of complex yet user-friendly products and services like telemedicine, apps for mobile health, and Internet-enabled home monitors over the forecast period. The healthcare sector has witnessed various technological advancements such as wireless data communication, electronic health records systems, electronic health record sharing, telemedicine/telehealth, activity monitoring systems, fall prevention or detection systems, tracking or wander management systems, and medication adherence system over the past few years.

Additionally, the market is becoming more organized and attracting the attention of investors and entrepreneurs thanks to the adoption of telehealth applications by long-term care service providers. Significant advantages of technology-integrated services are a reduction in the financial burden associated with medical procedures and a decrease in the requirement for institutional care. The quality of care offered in long-term care facilities is also rising due to data science and artificial intelligence (AI) developments. For instance, predictive AI can assist in recommending the best care solution based on previous data available with the service provider. Hence, developing sophisticated devices in long-term care will propel the market during the forecast period.

Regional Analysis

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global long-term care (LTC) market shareholder and is estimated to exhibit a CAGR of 6.99% during the forecast period. The large geriatric population in this region, sophisticated healthcare infrastructure, and relatively high disposable incomes are some of the significant drivers of this market. Increasing government initiatives that curb healthcare expenditure by promoting long-term care is expected to serve as a high-impact rendering driver. The "Aging in the United States" report from the Population Reference Bureau estimated that by 2060, there will be double as many Americans over 65 (from 46 million to over 98 million). Moreover, as per the report titled "The State of Seniors Health Care in Canada" by the Canadian Medical Association, around 75% to 80% of senior citizens in Canada suffer from one or more chronic health conditions. As per a paper published by Statistics Canada in 2012, around 2.2. million Canadians 65 years and older received home care due to long-term health conditions, disabilities, or problems related to aging. These factors are likely to boost the long-term care market in North America.

Europe is estimated to exhibit a CAGR of 4.60% over the forecast period. Increasing long-term care costs burden social care and health systems in many countries. The cost of supporting the geriatric population with everyday functions, such as hygiene, medications, and eating, constitutes a large proportion of public budgets. Low pay and challenging working conditions lead to high turnover in the working class. This creates difficulties in attracting highly qualified and motivated care staff. In 2016, Germany and Sweden had the highest ratio of workers against service users compared to the Czech Republic and Estonia, as these countries had relatively underdeveloped formal LTC services. In addition, the European Commission has undertaken various initiatives to encourage the countries to arrange for the changing age demographics across the EU by developing related legislation and policies. The New Start initiative is focused on identifying EU legislative action avenues to address women's underrepresentation in the labor market as the key policy tool to address recommendations to Member States within the objectives of Europe 2020. The European Semester issued specific recommendations on LTC in 2016.

Asia-Pacific is expected to grow significantly over the forecast period. Countries such as India and China do not opt for formal care as they follow a traditional approach to care. However, social and economic changes such as migration for employment and increased participation of women in the workforce are increasing the burden of healthcare expenditure. This is expected to fuel the growth of the LTC market in Asia-Pacific. In addition, Long-term care is required to ensure proper care of the elderly, especially in China, as the country's demography is critical due to its one-child policy. Most countries in Asia-Pacific have no definite government policies for reimbursement or payment of LTC. However, the household saving ratio is high, implying that people are well aware and saving for their old age. Furthermore, the high geriatric population affects the labor force in several countries, adversely impacting the economy. However, a strong need for reforming the existing LTC system persists in these countries since these are the fastest-aging, middle-income countries.

Latin America is considered to be aging according to the standards defined by WHO. Compared to developed countries fighting the problem of insufficient healthcare coverage, countries like Brazil and Mexico have yet to adopt an LTC system. Most insurance companies in this region are private, and only a fraction of the elderly can afford insurance. Although the number of nursing home facilities is increasing at a high rate in Mexico, they are mostly occupied by foreigners attracted to the country's cheaper home care facilities. In addition, residents of Mexico prefer staying at home and hiring part-time or full-time assistance rather than going to nursing homes. The Government of Brazil is taking initiatives to form an LTC system so that elderly people do not have to rely on expensive private insurance companies.

In Middle Eastern nations, long-term care is a relatively new concept. Cultural norms in most of these countries define children as responsible for caring for their old parents, which makes people reluctant to opt for formal care. Increasing awareness about formal care is expected to propel the use of LTC facilities. Initiatives such as Long-Term Care Facilities Conference, held in Dubai in June 2016, help raise awareness, provide information about LTC, and reduce the stigma attached to it, fueling regional market growth.

Segmental Analysis

The global long-term care (LTC) market is segmented by service.

Based on service, the global market is bifurcated into home healthcare, hospices, nursing care, assisted living facilities, and others. 

The nursing care segment dominates the global market and is projected to exhibit a CAGR of 6.53% over the forecast period. A nursing care agency provides basic medical supervision and access, meals, social activities, and 24-hour assistance. With the surging geriatric population and rising incidence and frequency of chronic diseases like heart problems, cancer, and Alzheimer's disease, the need for nursing care is growing. Expenses associated with nursing care are high and are usually borne out-of-pocket by the elderly themselves or their children. Nursing care is also excluded from Medicare and many other insurance plans. A long-term healthcare plan may cover nursing care, but it is often cut short for cost reduction. In the developing nations of the Asia-Pacific region, even the fastest-growing economies like India and China do not have any government policies for nursing care-related expenses and reimbursements. This is hampering the growth of the nursing care market.

Home healthcare includes services provided for injury or illness at home, such as administering medication, monitoring parameters such as blood pressure and heart rate, and helping regain independent living. Therapeutic, diagnostic, and mobility assist devices (wheelchair and walking assist devices) are some of the equipment used to provide home healthcare services. The availability of partial or complete coverage for home care services, especially in developed and developing economies, contributes to the increasing adoption of these services. In addition, the use of wearable devices, video consultation, and other telehealth services with remote patient monitoring can enable doctors to assess medical conditions in real-time and provide consultation, avoiding emergency hospital admissions. The advantage of receiving care with the comfort of staying at home while avoiding added expenditure and stress associated with hospitalization attracts more patients to opt for home healthcare services.

Assisted living facilities offer meals, housekeeping services, social and recreational activities, and wellness and exercise programs. However, they only offer medical assistance in an emergency. Due to the fact that assisted living does not offer skilled medical care, it is not protected by Medicare or any other health insurance type. Adults who choose assisted living either use their savings and investments to pay for it or enlist the aid of their kids. In addition, elderly residents who need assistance with their daily needs can get it from community service organizations, household suppliers, and luxury senior living communities. China has the greatest concentration of assisted living facilities among the Asian nations. The country has a large geriatric population base, and the public and private sectors provide these facilities. The assisted living facility segment is emerging in China and is expected to grow rapidly during the forecast period.

Recent Developments

• June 2023- The contract to construct the new La Ronge Long-Term Care (LTC) Home in Saskatchewan was awarded to Ledcor Construction Limited. A news release describes the residence as a three-story, two-wing per-floor building with up to 80 resident rooms, living areas, bathrooms, family rooms, a traditional recovery area, a serenity room, and space for health services.
• February 2022- illumifin, a leading third-party administration and software provider for the insurance industry, announced that it had inked a definitive agreement to acquire LTCG, a prominent provider of administrative solutions and clinical services to the long-term care ("LTC") insurance industry. It is anticipated that the transaction will close within the next 60 days.