It is no exaggeration that the American healthcare industry faces a looming crisis: an increasing number of older adults with complex healthcare needs. Today, the 65-and-older population in the U.S. is just 13 percent but accounts for more than a third of healthcare expenditures. That number will increase significantly over the next 25 years. It’s estimated that by 2050, one-fifth of the total population in the United States will be aged 65 and older, and healthcare costs will rise at a similar pace.

Most of these older adults will transition from commercial healthcare plans to Medicare, which has already seen a steadily increasing number of enrollees over the decades. The Centers for Medicare & Medicaid Services (CMS) estimates that by 2031, Medicare enrollment will reach 76.4 million, up from 63.6 million in 2022. It’s easy to see how this demographic explosion will place tremendous strain on Medicare and other healthcare systems as costs increase and the need for services grows. While large-scale change is needed at the policy level, healthcare payers and providers can also work together using data analytics technologies to ensure that the healthcare industry can continue to provide accessible, affordable, and effective care for a growing senior population. 

Navigating this demographic shift successfully requires advance planning. Healthcare providers and payers need to be equipped to handle the influx of patients with complicated needs while maintaining quality care without burdensome costs.  

Operational efficiency and resource management

Payers and providers can collaborate to improve care and control costs by reducing inefficiencies in everything from treatment options to the ordering of supplies and ensuring all resources are fully optimized. 

Studying industry trends and patterns related to aging populations can help payers and providers allocate resources by hiring more staff with geriatric expertise, budgeting for technologies, equipment, and medications for older patients, and investing in specialized facilities for physical rehabilitation, memory care, and other long-term and specialized care.

About one-third of Medicare dollars are spent on patients in their final two years of life, suggesting the need to direct more financial resources to expanding end-of-life and palliative care options. This could include programs that help individuals and their loved ones make difficult healthcare decisions ahead of a crisis, preventing costly interventions and treatments that add little to the length or quality of life.

Improving Patient Outcomes

The number of individuals over 65 with three or more chronic conditions is expected to grow to 40 percent by 2030. Designing systems for elderly care coordination with complicated needs can help reduce trips to the emergency room and other costly healthcare interactions. This may involve developing new care pathways and processes specifically for geriatric patients that emphasize ongoing healthcare communication and collaboration across different providers.

Providers and payers can also work together to implement preventive measures and support early interventions that can help geriatric patients stay healthier longer and reduce the need for more expensive care. These may include screenings that detect disease and conditions early, guidance on proper nutrition and healthy meals, and programs that encourage physical activity.

Payers and providers should also consider the social and economic factors affecting the health of older people. For example, about 1 in 3 adults over 65 are economically insecure. Inexpensive interventions can help older adults on a limited income avoid many common health complications, such as providing HEPA air filters for patients with lung conditions or air conditioners to those who may be homebound during intense heat waves. 

Identifying Structural Challenges

While providers and payers can explore innovative solutions and approaches for managing better care for aging adults, there are also significant structural challenges, including different reimbursement models between commercial insurance plans and Medicare. Medicare has specific requirements for billing and documentation that require separate processes, increasing administrative complexity and adding labor costs. Some requirements have already been simplified as part of the government’s Patients Over Paperwork initiative, but more streamlining will be needed in the future.

Making healthcare costs more transparent and standardized is critical. One study found that in 2020, employer and private health insurance plans paid hospitals 224 percent more for inpatient and outpatient services than Medicare. Prices varied widely across states as well. 

More standardized pricing could help lower Medicare costs while providing more predictable revenues and reducing administrative complexity. 

Using healthcare data analytics for changing needs

Data analytics is a powerful tool that can provide insights to help providers and payers prepare for an older patient population. For example, data analytics can help streamline tasks. By leveraging demand forecasting, they can predict future utilization, like patient flow, and adjust resources accordingly. The result is greater efficiency, reducing overhead costs and improving the overall patient experience by ensuring appointment availability and reducing waiting times.

On a macro level, payers and providers can use demographic data to analyze current and future trends in healthcare needs, such as identifying areas with large populations of older people. This information can be used to support the proactive development of preventive care and wellness programs, community outreach initiatives, and other services for the elderly. Hospitals, geriatric specialists, and facilities specializing in care related to older adults can also use these insights to plan for long-term needs related to staffing and budgets for specialized equipment and supplies.

Organizations can use predictive analytics powered by clinical and claims data to identify patients at risk of chronic disease or complications or even help detect certain conditions before the onset of symptoms, empowering providers to offer preventative care proactively or begin critical treatment earlier. Real-time data analysis also helps clinicians monitor the effectiveness of treatments in individual patients. All these abilities improve care and cost-efficiency by enabling early intervention and minimizing unnecessary tests and treatments.

Finally, healthcare data analytics can also make it easier to see the financial and health benefits of preventative care and various treatment options. These insights will become more critical for both payers and providers to ensure cost-effectiveness and quality care for the senior population. They can also use analytics to implement accurate benchmarking against industry standards, promoting consistency in treatment across providers and continuous quality improvement.

Change Starts Now

The statistics show there is no time to lose. With the healthcare system still showing the strains of the Covid pandemic, preparing for the needs of a growing elderly population and their complicated needs is crucial.

By working together, payers and providers can help ensure healthcare systems and communities can absorb the impact of this demographic shift. Healthcare planning that focuses on operational efficiency and resource optimization supports cost management and efficient care. Disease prevention, early detection, and care coordination all support improved outcomes among older patients with complicated healthcare needs. Different models for Medicare payments and billing pose a challenge, but streamlined processes can reduce administrative complexity.

The key to managing all these tasks is data analytics. The ability to gather and analyze enormous amounts of information to identify healthcare needs by population, region, and even individual patients is essential. Payers and providers can use the insights generated by data analytics to identify inefficiencies, better support an aging population, and plan for the future of healthcare.