Healthcare leaders want to be confident that a major capital investment will support their service delivery needs many years into the future. A directionally correct demand forecast, at the service line level, is a key component for the development of a rational capital investment strategy. It is valuable to first understand the future total market demand before any discussions of market share, service line initiatives, or care disruptors. Thus planning teams should first analyze historical age and gender adjusted utilization rates to help define future requirements by service line. These retrospective methods are then combined with a deep understanding of the underlying trends and transitioning demographics. This combination of analyses is critical to providing meaningful population-based forecasting that is grounded in evidence as well as a clear understanding of existing market conditions and patterns of change in any geographic locality.
Many health systems are primarily focused on the aging of the population, which likely brings higher utilization rates for services. But the aging population is not the whole story. Which brings us to millennials…
A recently published Blue Cross Blue Shield (BCBS) report on the health of millennials indicates that this population cohort are not only less healthy than the previous generation (Gen X) but will also contribute to greater demand for treatment and even higher healthcare costs in the years ahead.
The millennial generation, most commonly defined as those born between 1981 and 1997, are now in their mid-20’s through mid-30’s. They are the largest generation in the U.S. labor force—surpassing both Baby Boomers and Generation X—and still growing.1 For employers, the findings in this report come with concerning implications for rising healthcare costs and potential effects of health conditions on employee productivity and rates of absenteeism.
The BCBS report findings further show that older millennials (in their mid-30s) have higher prevalence rates for nearly all the top 10 health conditions than Gen X members when they were the same age. While prevalence rates are still quite low, at 5 per 100 millennials for major depression and 8.1 per 100 millennials for hypertension for example, it is the significant rate of increase that is troubling. The prevalence rate (per 100 millennials) of 8 of the top 10 health conditions were up by double digits, and the prevalence of major depression, hyperactivity, and type II diabetes increased 31%, 29%, and 22% respectively.2
The reported increased rates of hypertension, high cholesterol, coronary artery disease, and type II diabetes in millennials indicate that this age demographic will contribute to increased demand for primary care, emergency medicine, cardiology, and other specialty services if their needs are not sufficiently addressed in the near term. Similarly, increases in substance abuse disorders, psychotic disorders, depression, and other behavioral health conditions will increase demand for behavioral health providers and the facility space needed for them to see these patients. The findings in this report highlight the need to consider how the evolving needs of the 25-39-year-old age cohort impact healthcare utilization—a demographic that historically was not a large driver of overall healthcare demand.
The increasing prevalence of these conditions in people in their 20’s and 30’s means that the health status and utilization of millennials will be an even more significant variable for healthcare planning when this group reaches their 40’s and 50’s. While employers, communities and healthcare systems can (and should) invest in preventative efforts to address these findings, healthcare planners need to consider how to deal with the implications if they are not successful.
Are you considering the healthcare demand of the millennial generation in your mid-term plans? The Innova Group has use detailed models to estimate age and sex adjusted demand for health systems around the country.
1 – Pew Research Center Fact Tank, https://www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-labor-force/, April 11, 2018.
2 – The Economic Consequences of Millennial Health, Blue Cross Blue Shield and Moody’s Analytics, Health of America Report, https://www.bcbs.com/the-health-of-america/reports, published November 6, 2019.
By Eric Poulsen | December 2019
