Two major forces driving the rapid growth (+7 million jobs by 2024) of Healthcare in the United States

I recently published a post detailing industry job shifts in the United States, and one of the key takeaways was that healthcare is expected to grow faster than any other industry, adding ~6.8 million jobs in the next ~10 years. Politics aside (looking at you, Obamacare), below are two reasons healthcare is expected to add so many jobs in the next ~10 years:

*note, I do not claim that these forces are the sole factors that will drive healthcare growth, just major contributors

(1) The population in the United States is aging…fast:

Below, we can see that as a percent of total population the 65-84 year-old cohort is expected to grow by 4% in the next 10 years.

Screen Shot 2016-07-16 at 10.26.11 AM

 

What does this translate to in terms of actual people, you may ask? The 65 and over cohort is expected to grow from 47.5 million to 65 million (+17.5 million) in the next 10 years.

Screen Shot 2016-07-16 at 10.27.28 AM

 

(2) Life expectancy in the U.S. is increasing by about 2 months each year, moving from 70 in 1960 to 79 years in 2014. 

Screen Shot 2016-07-14 at 8.55.19 PM

(Source: Worldbank)

Putting things together (with a crappy drawing!)

Generally, the 65 and over age group utilizes a greater amount of healthcare (particularly nursing homes, outpatient clinics, etc), meaning as this group grows (point 1 above), demand for healthcare should grow as well.

So, when we have a large cohort aging and entering the 65-84 year age group (what I have coined below as the ‘window of medical need’), and we couple that with life expectancy increasing by ~2 months/year (point 2 above), we get something like this:

 

healthcare_d2

 

We can see as our 75 million Baby Boomers begin to retire, they enter the ‘window of medical need’, with 17.5 million entering the 65 and up age group by 2025. Additionally, those already in the 65+ club are enjoying longer life expectancies. This means the ‘window of medical need’ (green bar) is gaining a large amount of people, while expanding/retaining those in the window for a longer period; it is these two factors that are major contributors to the rising demand for healthcare. In turn, healthcare has seen a huge spike in IPOs over the past three years.