The first baby boomers in the U.S. turn 80, and a structural inflection point arrives for post-acute and home care demand

Overview

This is the first report in UBS Healthcare Horizons. It focuses on the U.S. impact after the first baby boomers reach age 80 in 2026, including healthcare facilities, post-acute care, home care, assisted living, deathcare, hospitals, and managed care organizations. The key conclusion is that expansion of the over-80 population is not only an increase in headcount, but also a nonlinear rise in multimorbidity, comorbidity burden, care duration, and supportive service demand, which changes both the structure and intensity of healthcare demand.

Core views

UBS believes that aging will be a structural tailwind for U.S. healthcare services over the next decade, but the degree of benefit will vary across care settings. Home Health, IRF, SNF, Hospice, Personal Care, Assisted Living, and Deathcare are expected to benefit more directly because these services target older patients, are relatively lower cost, and align with payer cost-control priorities and older adults’ preference to age in place. Hospitals will also benefit from increases in older-age emergency, inpatient, and outpatient volume, but growth is expected to be lower than that of post-acute care. For MCOs, growth in Medicare Advantage membership and upward shifts in age-risk factors provide revenue support, while rising utilization among older members and delays in risk coding may create short-term MLR pressure.

Analysis framework

The report combines demographic analysis, CMS/NHE healthcare spending forecasts, care-setting utilization profiles, industry operating data, payer behavior, and the UBS HOLT factor framework. It starts with growth in the U.S. 80+ population and chronic disease burden, then breaks down healthcare spending and care-demand migration by age cohort, maps those trends to segments including Home Health, SNF, Hospice, Senior Housing, Deathcare, Hospitals, and MCOs, and finally evaluates relevant companies through UBS HOLT’s Operational Quality, Momentum, and Valuation dimensions.

Methodology notes

• factor_analysisUBS HOLT Scorecard

  Cash flow and valuation factor scoring

  UBS HOLT is a cash-flow framework independent of fundamental analysis that uses CFROI to measure return on invested capital and ranks peers on Operational Quality, Momentum, and Valuation on an equal-weight 0 to 100 scale.

• demographic_analysisage-cohort healthcare utilization analysis

  Segmenting healthcare spending and care-setting migration by age cohort

  The report stratifies 65-74, 75-84, and 85+ age groups and compares chronic disease burden, inpatient utilization, post-acute services, home care, and long-term support-service demand to identify beneficiary industries.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Addus HomeCare Corporation (ADUS)

  Benefits from rising Personal Care and Home Health demand

  Strengths

  Preference among seniors for aging in place, rising ADL assistance demand, and relatively strong HOLT Operational Quality.

  Weaknesses

  Growth is constrained by home care labor supply and wage cost.

  Comparison

  Compared with institutional care, home and community care are lower cost and more aligned with payer cost-control trends.

  Risks

  Workforce shortages, reimbursement policy changes, and state and federal funding constraints.

• BrightSpring Health Services (BTSG)

  Benefits from supportive and community care demand among older populations

  Strengths

  HOLT Overall Peer Rank and Operational Quality scores are relatively high, with clear thematic exposure.

  Weaknesses

  Valuation and operating execution still need to be validated against company-specific fundamentals.

  Comparison

  Ranks highest overall in the HOLT sample, reflecting a strong factor-screening outcome.

  Risks

  Growth in care-service demand may be constrained by workforce bottlenecks and payer bargaining power.

• Encompass Health (EHC)

  Benefits from growth in IRF and post-acute rehabilitation demand

  Strengths

  Rehab needs after hospital discharge are rising among older patients, and HOLT Operational Quality is in a strong position.

  Weaknesses

  Facility-based services require more capital and staffing than Home Health.

  Comparison

  IRF sits within the post-acute care chain and benefits from higher referral flow after hospital discharge.

  Risks

  Inpatient rehab reimbursement, referral tempo, and labor supply changes.

• Ensign Group (ENSG)

  Benefits from sustained demand for Skilled Nursing Facilities

  Strengths

  As a relatively lower-cost care setting, SNF may benefit as payers redirect patients to lower-cost sites.

  Weaknesses

  SNF costs are not lower than Home Health and are highly staff-intensive.

  Comparison

  Compared with hospitals, SNF daily cost is around $550, giving payers cost-control appeal.

  Risks

  Workforce shortages, quality scores, regulatory, and reimbursement-policy risks.

• PACS Group (PACS)

  Benefits from increasing volume in SNF and post-acute care

  Strengths

  Aging drives higher SNF patient-days and stronger post-acute care demand.

  Weaknesses

  Although HOLT score is in the upper half, Operational Quality is not among the strongest.

  Comparison

  Shares SNF thematic exposure with ENSG and benefits from post-discharge care migration.

  Risks

  Occupancy, staffing, reimbursement, and quality outcome volatility.

• Service Corporation (SCI)

  Benefits from growth in Deathcare volume and pre-need demand

  Strengths

  Deaths are expected to rise 19% by 2045 versus 2022, with older populations driving demand for funerals, cemeteries, and prepay arrangements.

  Weaknesses

  Rising cremation rates are expected to compress per-service revenue mix.

  Comparison

  Unlike healthcare service providers, SCI benefits from deathcare demand that rises with population aging.

  Risks

  Cremation substituting for traditional burial, changing consumer preferences, pressure on per-service revenues.

• Brookdale Senior Living (BKD)

  Benefits from demand for Senior Housing and Assisted Living

  Strengths

  Senior Housing occupancy is near 90%, and constrained supply supports pricing and occupancy.

  Weaknesses

  The report lists it as not covered but exposed to the theme.

  Comparison

  Compared with Home Health, Senior Housing depends more on occupancy, supply availability, and real-estate operations.

  Risks

  New supply, operating costs, occupancy declines, and resident affordability.

• Chemed Corp (CHE)

  Benefits from Hospice and related high-age care demand

  Strengths

  Rising hospice utilization, average admission age around 80, and HOLT Operational Quality ranks among the top.

  Weaknesses

  Hospice growth depends on referrals, compliance, and the Medicare policy environment.

  Comparison

  Compared with SNF and Home Health, Hospice is more directly tied to end-of-life care and days of care before death.

  Risks

  Medicare oversight, changes in referral practice, and compliance reviews.

• The Pennant Group Inc (PNTG)

  Benefits from Home Health, Hospice, and Senior Services themes

  Strengths

  Its business is linked to rising high-age care demand and expanding post-acute service volumes.

  Weaknesses

  HOLT Overall Peer Rank is relatively low within the sample.

  Comparison

  Also exposed to post-acute and home care, but HOLT factor screening is weaker than that of leading companies.

  Risks

  Execution quality, reimbursement policies, labor supply, and competition.

• Managed Care Organizations

  Medicare Advantage membership expansion benefits, but higher utilization creates pressure

  Strengths

  Aging lifts CMS-HCC risk model coefficients, and MA membership growth supports premiums.

  Weaknesses

  Health deterioration and risk coding time mismatches may cause revenue lag while medical costs move first.

  Comparison

  Unlike post-acute operators, MCOs act more as payers and traffic allocators, potentially controlling costs through value-based care and low-cost settings.

  Risks

  Rising MLR, delayed risk adjustment, policy and reimbursement changes.

Key data

• U.S. population age 80+about 15 million rising to close to 30 millionBrookings projects roughly a doubling from the mid-2020s to the mid-2040s.
• U.S. population age 85+about 14 millionThe U.S. Census Bureau projects this level by 2040, a 72% increase from about 6 million in 2022.
• Per-capita personal healthcare spending for ages 65+$22,3562020 data, more than five times that of children and about 2.5 times that of working-age adults.
• Share of healthcare spending from 65+ populationabout 37%This age group is about 17% of the U.S. population but accounts for about 37% of total healthcare spending in 2020.
• Per-capita healthcare spending for ages 85+about $36,000CMS data, substantially higher than for younger elderly cohorts.
• U.S. healthcare spending forecastabout $9 trillion by 2034; 2025-2034 CAGR about 5.4%CMS NHE forecasts healthcare spending growth above the roughly 4% average GDP growth, with healthcare’s share of GDP rising from about 18% to about 21%.
• Home Health spending growth2025-2034 CAGR about 7.8%Higher than total healthcare spending of about 5.4%, hospitals about 4.8%, and nursing facilities and assisted living communities about 4%.
• Hospice utilization1.9 million Medicare beneficiaries in CY24National Alliance for Care at Home data, 4.4% year-over-year growth in CY24; 53.1% of Medicare decedents received at least one day of Hospice care.
• Senior Housing occupancy89.5% in 1Q26NIC data, up 40 bps sequentially, while inventory growth remained below 1% for three consecutive quarters.
• HOLT thematic company scoring8 of 10 companies are in the upper half of the HOLT sampleOperational Quality is strongest; ADUS, BTSG, CHE, EHC, and SCI are in the top fifth of this factor.

Impact & implications

The investment implication is that aging effects should not be understood only by total population above 65; accelerated growth of the 80+ and 85+ cohorts will drive substantial changes in care intensity, care duration, and care settings. Payer cost control, older adults’ preference for home-based care, and rising post-acute care demand together reinforce medium- to long-term volume-growth logic for Home Health, SNF, IRF, Hospice, Assisted Living, Personal Care, and Deathcare. By contrast, hospitals benefit more modestly, while MCOs face a dual dynamic of both favorable membership and risk-adjusted revenue and risk of margin pressure from rising utilization and lags in risk scoring and income adjustment.

Risks

• Direct caregiver shortages may limit the ability to absorb demand growth in Home Health, SNF, Hospice, and community services.
• Changes in payer and government reimbursement policies may affect provider revenue and margins.
• Rising utilization among older MCO members may first increase healthcare costs, while risks of lagging coding and income adjustment exist.
• Senior Housing and Assisted Living are affected by operating costs, resident affordability, and supply cycles.
• Although deathcare has favorable mortality demographic tailwinds, increasing cremation rates may pressure revenue structure.

What to watch

• The actual growth pace of the U.S. 80+ and 85+ populations.
• CMS/NHE forecast updates for Home Health, Hospitals, Nursing Care Facilities, and total healthcare spending.
• Changes in Medicare Advantage risk scores, MLR, and membership composition.
• Occupancy, referral volume, patient-days, and workforce supply for Home Health, SNF, Hospice, and Senior Housing.
• Whether NIC Senior Housing occupancy rises above 90% and whether new inventory growth remains below demand.
• NFDA trends in deaths, cremation rates, and pre-need sales.
• Changes in UBS HOLT Operational Quality, Momentum, and Valuation factor rankings.