Most will agree that living longer is a good thing, and the reality is that life expectancy has been rising in recent decades. One outgrowth of this phenomenon is that elderly people have more health care expenses post retirement than ever before – consuming approximately 20% of their income, according to the Employee Benefits Research Institute (EBRI).
As people live longer, they also need care designed for the elderly. As a result, the sector of extended-care facilities, nursing homes and retirement homes has mushroomed and continues to grow. An interesting, and perhaps overlooked, aspect of this demographic change is that it tends to affect women much more so than men. According to the above-noted study, women over the age of 85 spend considerably more time in nursing homes and other extended-care facilities.
Increased longevity is also met by a substantial increase in the amount of medication prescribed and taken. One treatment that only a few years ago seemed quite unconventional, but has certainly become more notable to investors, is the growing use of medical marijuana. Medication related to arthritis and other pain relief will become more prevalent.
Although universal health care covers a large portion of costs in Canada, a considerable amount of money still comes out of pocket. Thus, there are growing markets relating to elderly care in both the private and public sectors.
According to the Freedonia research group, “US revenues for elder care service providers are expected to grow 6.3 percent per year.” While this might be a high-end expectation for Canada, given that fewer services are available in the private sector, it may be a reasonable expectation. As elderly people have the income and a desire to spend money to make their lives more comfortable, there will be a considerable expansion of the market.