Demand for Healthcare is About to Skyrocket

Tanner H. Jones

Issue Areas

Physician shortages have been announced and projected multiple times in the past 100 years in America. In the ’60s and ’70s, and again in the 2010s, researchers and pundits sounded the alarm about a looming scarcity of doctors. Shortages yield longer wait times, difficulty finding doctors, and physician burnout, which creates a negative feedback loop driven by attrition. Different groups have proposed different “fixes” for shortage problems, often suggesting methods to increase the supply of healthcare providers. Yet, merely focusing on supply ignores the demand side of the equation: the side most poised for rapid growth.

Supply-side discourse has flaws related to technological, practice, and generational changes, as well as data flaws regarding how licensed practitioners are counted and their ability to meet demand. But supply-focused analyses also neglect demand, overlooking demographic, utilization, and economic headwinds that signal a growing need for healthcare professionals. As state policymakers consider regulatory and statutory barriers to medical licensure and healthcare facility development, they should be cognizant of the looming demand for healthcare services.

America’s aging population is a key driver of increased healthcare demand. The number of Americans ages 65 and older is expected to increase by 47 percent, from 58 million in 2020 to 82 million by 2050. The influx of elderly Americans will put unprecedented strain on healthcare systems. One recent study projects that “of the population 50 years and older, the number with at least one chronic disease is estimated to increase by 99.5% … to 142.66 million by 2050.” Demands and costs for the next age bracket are even more problematic. The Centers for Medicare & Medicaid Services found that per capita costs for those 85 or older are twice as high as for those 65 to 84.

Moreover, a slowing economy casts a long shadow over the healthcare sector. A robust economy is the backbone of a strong healthcare system, driving innovations that enhance healthcare delivery and outcomes. As America’s GDP growth continues to slow and workforce productivity gains diminish, foundational supports weaken, risking a cascading effect that could exacerbate shortages and inflate healthcare costs. The broader implications of fiscal health pose serious challenges for the healthcare ecosystem: a thriving economy ensures that the public infrastructure supporting private markets remains well-resourced. Everything from infrastructure to emergency services suffers when austerity is deployed, ultimately straining healthcare systems as demand for private and public healthcare resources expands.

Further compounding these issues is the fact that America is becoming less healthy. According to 2019 data from the Centers for Disease Control, more than half of 18-to 34-year-olds have at least one diagnosed chronic condition, and roughly one quarter have at least two. Moreover, an analysis from the Harvard T.H. Chan School of Public Health concluded that “Over the past three decades, childhood obesity rates have tripled in the U.S., and today, the country has some of the highest obesity rates in the world: one out of six children is obese, and one out of three children is overweight or obese.” For comparison, just five percent of American children were obese in the 1970s, marking a dramatic increase: from one in 20 then to one in 6 today. America’s adults are chronically ill as well. As each demographic bracket ages and becomes even less healthy, physician demand will continue to increase.

While technology may offer some relief by filling gaps in healthcare delivery, automation can only partially offset increasing demand driven by complex, interwoven structural demographic and economic forces. Thus, it becomes imperative for state policymakers to consider demand-side trends when they evaluate their laws and regulations. Even if the physician shortage seems opaque in the status quo, it will become evident in the coming years and decades. Consequently, state lawmakers should ease pathways to enter the medical profession and develop new healthcare facilities and clinics, preparing their states to meet forthcoming demands.