We wrote in an earlier piece that population aging isn't likely to shift the composition of care that hospitals need to offer. We analyzed Medicare fee-for-service data and modeled future utilization by age bracket and demographic group using projections from the Census Bureau. Our topline conclusion: the over-65 population is growing so quickly that overall growth overwhelms extreme shifts in parts of the population.

That's too simple a story.

Two segments are set to experience outsized increases: seniors over age 85 and people of color. If we view demand for hospitalizations as a proxy for demand for health care services in general, then expansion in these markets creates an unaddressed opportunity for investment in specialized or dedicated services, even if the market may not seem to exist today.

Seniors over 85

The population over 85 will grow by nearly half in ten years, from 6.7M in 2020 to 9.1M in 2030. Seniors over 85 utilize health care services at a higher rate than other parts of the Medicare population, and often have different care needs. For example, they're hospitalized for medical care at a rate 17 percentage points higher than seniors 65-75. As a result, the extra 2.3M seniors over 85 represent an outsized increase in addressable market for providers and investors.

With both greater longevity and a rising chronic disease burden, this larger population of older seniors will need new or expanded care models to support their unique needs. As a result, we expect to see increased demand for services like senior-focused primary care, or even more highly specialized care models yet to be developed.

Seniors of color

Our take: The future of senior-focused primary care

The number of non-white seniors is set to almost double, from 8.5M in 2020 to 13.3M in 2030. This growth represents not only a market opportunity, but also an imperative to improve health equity.

In our analysis, we found that hospital utilization varies widely between white and non-white Medicare fee-for-service beneficiaries. White patients are hospitalized for surgical care at a higher rate than patients of color. The difference is even greater looking at the service line level.

In 2019, hospitals provided orthopedic care at a rate 41% lower for non-white patients than white patients and 27% lower for spine surgery. In contrast, non-white patients utilized more medical services like neurology (21% higher), vascular services (24% higher), or general medicine at a higher rate.

It's impossible to say based on the data alone whether these disparities are the result of underlying inequities or differing health needs. In either case, the difference shows the need for tailored health services that either address disparities or tailor health care delivery to different populations' needs.

For both seniors over 85 and seniors of color, larger absolute numbers mean that providers will have critical mass of patients to specialize around these populations. While this patient population may not exist today, it's worth examining what investments are necessary to be prepared for future growth.