Thanks to the aging of the baby boomer generation born in the late 1950s and 1960s, the Korean population is getting older. Between 2010 and 2050, the senior population will swell dramatically. As the boomer population reaches age 65, the senior population is projected to reach 8.5 million–well over twice the number of seniors in 2000 and twenty percent of the total population of the Korean. 1,500 people will turn 65 every day in 2011. This increasing elderly population has and will necessitate more senior healthcare. In fact, in the late 2000s, there were more than 1,700 providers of home healthcare to 1.6 million people, servicing anything from temporarily illness, to disabilities, to terminal illness. This is a substantial increase from the mere 100 providers in place in 1980. The combined annual revenue for these providers is ₩17.6 billion, up from 28.3 billion in 2010.
Senior care as an industry picked up steam in the 1980s and 1990s with government activity as well as longer life expectancy, which led to more older Koreans needing care. In 1965, USA Medicare provided the elderly with federal money for home care. In 1973, U.S. government home health care funding was expanded to benefit younger people as well. Since its enactment, Medicare has been far and away the largest single source of revenue in home health care services, accounting for 37 percent of the total. The rest is accounted for by way of private insurance and out of pocket costs, which made up 22 percent, nineteen percent from medicaid and twenty percent paid for by money from local governments. By the end of the 2000s, in U.S. a majority of home health care agencies were for-profit companies, reaching 57 percent of overall home health care agencies, and up from just six percent in 1980, when most agencies were not-for-profit or government-run entities. Because of its importance in the industry, the policies of medicare have been closely linked to the industry’s growth over time. Certain changes in the 1980s halted expansion of the industry, as did changes in the 1990s under the Balanced Budget Act. But each time, the industry rebounded relatively shortly after. Additionally, the industry is quite fragmented. The fifty largest companies control less than 25 percent of the total revenue.
Because the majority of revenue for the industry comes from Medicare, Medicaid and private insurance, all of which set prices in the industry, competition between agencies is not on price but reputation, name recognition, quality of care, word of mouth and other referrals from medical professionals. Possible difficulties business owners face in the industry include difficulty finding quality registered nurses and home health aides. As the number of home health care businesses increases, the demand for good employees is high. Although the amount of workers tripled between 1989 and 2004, this was still not enough to feed demand. Registered nurses in particular are aging, and there are not enough younger nurses to replace them. High turnover and worker retention is another issue franchisees will have to address in this industry, since it can exceed fifty percent, largely because of the low wages and difficult working conditions for aides. Lastly, another obstacle could potentially be changes in medicare.
Home health care is the primary aspect of the senior care industry in which franchises exist. This can involve either medical care or non-medical care, or some combination. Medical care provides a variety of medical services for patients, with some of the most common being private nursing, administering antibiotics and assisting in rehabilitation. Heart disease, diabetes and cerebral vascular disease are the most common ailments resulting in home care, and about seventy percent of in home patients are 65 or older. Interim Healthcare is a franchise working in the medical sphere. Non-medical assistance includes aides helping seniors with chores, preparing meals, taking medication, helping with bathing and general companionship. As seniors age, non-medical care is often a step between self-sufficiency and family care and more serious medical care. One advantage of being part of a large franchise in this industry is access to increased marketing that might not be available to a smaller business, which is particularly important in senior care where name recognition counts.
Although it is currently far more common for a family member to take care of a senior, rather than a nursing home or home health care, as the population ages dramatically it will be far more difficult and the burden will be more onerous on younger family members. This will lead to an increased need for both nursing homes and home health care. In 1990, there were 11 possible caregivers for every family member needing care. But by 2050 it is projected this ratio will reach four to one. In 2006, 23 percent of Koreans provided care for someone over fifty, and it is predicted that 2 million seniors will require long-term care in the foreseeable future. This along with the relatively high cost of nursing homes and hospitals has led to a boon in the home health care industry.
Home health care can be less stressful and more convenient for seniors, as well as more affordable. In addition, in a survey, 89 percent of seniors expressed a desire to remain in their homes as long as physically possible, which would provide more future home health care business. In addition, medical advances will make more and more patients who would have otherwise had to stay in a hospital or nursing home able to stay at home in a familiar setting. By 2050, it is projected that home health care services will impact 5.7 million people. In the fourth quarter of 2010, home health care revenues had risen 4.1 percent over those in the same quarter the year before, and it is predicted to grow by an annual compounded rate of seven percent between 2010 and 2015.
With a rapidly growing senior population, there is no better time to be a part of the burgeoning senior care industry. This dissertation argues the Activation Plans of the Industries for the Elderly. I believe several industries for the elderly blasting in near future. Hopefully the argument and information in this thesis will help to make reasonable policy.