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From Every Angle: The silver tsunami

How healthcare systems can act now to address the rising complexity, costs and capacity demands driven by an aging population
Financial sustainability
Pharmacy
Profitable growth
Quality & clinical operations
From Every Angle: The silver tsunami (Original)
Key points

      The “silver tsunami” is no longer a distant forecast — it’s here, reshaping the future of healthcare in real time. Every day, 10,000 Americans turn 65, and by 2030, one in five U.S. residents will be 65+. This massive demographic wave brings both opportunities and challenges. Older adults are living longer than ever before, but they’re also presenting with multiple chronic conditions, higher medication use and unique social needs that stretch the limits of traditional care models.

      For hospitals and health systems, the implications are immense. It’s not just about more patients — it’s about more complex patients who require coordinated, continuous and resource-intensive care. Service lines like cardiovascular and orthopedics are already seeing unprecedented demand, while financial pressures from shrinking commercial payer bases, thin Medicare reimbursements and workforce shortages continue to mount. The traditional inpatient-focused model simply cannot shoulder the weight of what’s coming.

      That’s why leaders are rethinking how and where care is delivered. Growth in ambulatory settings, hospital-at-home programs and community-based support networks is no longer optional — it’s critical for sustainability. Financial health will increasingly hinge on the ability to shift to lower-cost sites of care while still investing in preventive programs, chronic disease management and patient experience. Just as important, systems must form strategic partnerships, strengthen transitional care and align their service lines to meet the needs of an older, more medically complex population.

      In short, the silver tsunami is not a threat to brace against but a wave to ride. By reimagining care delivery, expanding into ambulatory and community settings, and investing in both people and partnerships, health systems can transform demographic pressure into an engine for growth and resilience. The future belongs to organizations that see aging not as a crisis, but as a call to innovate in ways that improve patient outcomes, sustain providers and strengthen the entire care continuum.

      Tony Guth quote

      Rethink aging population beyond hospital walls

      Tony Guth, Senior Director, Intelligence

      Why it matters: The aging population is reshaping healthcare, driving demand across all care settings but especially in ambulatory environments. Hospitals will remain vital for complex cases, yet most growth is happening outside their walls.

      The challenge is not just volume — it’s complexity. Older adults present with multiple chronic conditions, high medication use and unique social needs. “At a certain age, you’re going to be a more complex patient consuming a lot more healthcare on average than when you were 20 or 30,” said Tony Guth, Vizient senior intelligence director. “So backup care beyond the hospital walls that can be done in a clinic or ASC setting will be increasingly important.”

      While every system and market are different, it’s important for leaders to tailor strategies to meet those needs while adapting to a shrinking commercial payer base and lower Medicare reimbursements. Financial sustainability will depend on how effectively organizations shift into lower-cost ambulatory models.

      “Ambulatory care by itself is inherently lower cost,” he said. “For leaders, the opportunity lies in building capacity, forming partnerships and delivering meaningful patient experiences that earn loyalty and trust.”

      Strategies to consider:

      • Segment the population: Design different approaches for patients — healthier, resource-rich seniors versus vulnerable, high-acuity patients. The spectrum not only impacts their ability to access requisite services but then how it affects utilization as well as patient outcomes. Recognizing that this nuance exists and thoughtfully designing programs accordingly is important.
      • Strengthen post-acute and transitional care: Ensure seamless patient handoffs, invest in hospital-at-home and virtual models, and expand community-based support systems. If you pay money up front to send patients to their home and provide the necessary social work needs, they’ll be less likely to show up in the ED later.
      • Build operational capacity: Address workforce shortages, extend patient visit times where appropriate, and prioritize navigation support. Consider how you can drive efficiencies across your care continuum and augment your human capital to optimize capacity and meet this growing demand is going to be key.
      • Invest in preventive and chronic disease management: Support wellness, disease prevention and medication adherence programs to prevent and slow disease progression. Also remember the importance that social determinants of health play on patient health. “An 80- year-old who has lived a clean life is going be healthier than an 80-year-old who smokes, drinks, has a poor diet and lacks transportation to care,” Guth said.
      • Form partnerships: You don’t have to offer the full continuum of care. But to avoid gaps that could cause patients to end up in your hospital, you can use joint ventures and collaborations (e.g., ASCs, specialty providers) to scale ambulatory services. If it’s intimidating, start small and take an incremental stepwise approach. For example, move orthopedics out of surgery, and then consider spine or cardiac. Just make sure that your strategy relates to aging ties to your overarching system mission and your stakeholders across the business are all on board.
      • Focus on financial sustainability: As your contracts and how you get paid by CMS changes, you need to look at these lower cost structures and that is by definition ambulatory. Expand into growth areas like ambulatory surgery and specialty pharmacy while adapting to bundled payments. “We expect the majority of many health systems’ margins will be driven by specialty pharmacy in the future,” Guth said.
      • Prioritize patient experience: Prioritize patient experience by ensuring high-quality, unrushed interactions supported by technology that enables rather than replaces care. For geriatric patients, this means slowing down operationally — providing clear next steps, personalized support and satisfaction-driven interactions to build loyalty. “With the erosion of the commercial payer mix as people age into Medicare, strategically approaching these patients will support your volume thresholds move forward,” Guth said.
      Josh Aaker quote

      Strengthen the cardiovascular service line through collaboration and innovation

      Josh Aaker, Senior Intelligence Director

      Why it matters: The cardiovascular service line is at an inflection point. An aging population, coupled with rising rates of chronic conditions like diabetes and hypertension, is driving unprecedented demand. By 2035, nearly 72% of adult CV inpatient discharges will stem from patients over 65. Combine that with a projected 106% increase in valve procedures for the 65+ population and rising rates of multimorbidity, and the strain on capacity is undeniable.

      For healthcare organizations already navigating workforce shortages and space limitations, the question is clear: How will we adapt?

      “This isn’t a tomorrow problem — it’s a yesterday problem,” said Josh Aaker, senior intelligence director. “We’re already at a capacity crunch, and the demands of an aging cardiovascular population are only going to grow”.

      The challenge is significant, but it’s not insurmountable. With the right strategies — spanning capacity planning, multidisciplinary care models and workforce innovation — leaders can not only keep pace with demand but also improve access, throughput and outcomes for patients.

      Strategies to consider:

      • Reimagine care around the patient. Leaders should “pretend to be an 81-year-old TAVR patient,” Aaker said, and design services through the eyes of older adults, recognizing their mobility, sensory and social-emotional needs. From quieter ICUs to wraparound services like endocrinology, nutrition and palliative support, systems must deliver age-appropriate, holistic care.
      • Segment and plan capacity strategically. Demand growth will not be uniform. Scenario planning can identify whether bottlenecks are in cath labs, ICUs, imaging or ED throughput. Some organizations may need dedicated cardiac ICUs, while others may benefit from shifting lower-acuity cases to ambulatory surgery centers or off-campus sites.
      • Build multidisciplinary cardio-renal-metabolic programs. With more than 90% of Americans affected by overlapping CV, renal and metabolic conditions, health systems should intentionally design team-based models. Leverage pharmacists, nurse navigators, diabetes educators and digital tools to expand reach while reducing unnecessary physician burden.
      • Expand cardiac rehab and prevention efforts. Proactive use of rehab, lifestyle interventions and coordinated primary care partnerships can reduce complications, prevent readmissions and preserve scarce inpatient capacity.
      • Optimize site-of-care shifts. Freeing up hospital space for complex geriatric procedures requires moving lower-risk, stable patients to less resource-intensive settings. Advanced imaging can often replace diagnostic caths, while off-campus procedural sites can safely absorb routine cases.
      • Invest in imaging and diagnostic capacity. Demand for echocardiography, CT and other modalities is surging. Leaders must expand technology access, rethink compensation for imagers, and partner with radiology to ensure timely reads and intervention.
      • Strengthen the cardiovascular workforce pipeline. With a significant portion of the CV workforce nearing retirement, building pipelines through local training programs, expanding advanced practitioner roles, and investing in technologists and imaging staff will be critical. New compensation models that reflect workload and complexity will help sustain retention.
      • Elevate pharmacy and supply chain in service line strategy. Pharmacists play a growing role in heart failure therapies and specialty drugs, while supply chain decisions affect everything from device selection to patient experience. Integrating these perspectives ensures affordability, safety and patient-centered product choices.
      • Harness technology for efficiency. AI-enabled triage, virtual monitoring platforms and forecasting tools can streamline workflow, reduce bottlenecks and support better resource allocation. While tech won’t replace workforce needs, it can extend their capacity and sharpen operational planning.
      • Hardwire coordination and systemness. Cardiovascular care spans the full continuum — from prevention to transplant. Aligning protocols, reducing clinical variation and standardizing transitions across inpatient, outpatient and virtual settings will improve efficiency and ensure patients receive consistent, connected care. “The first clinical team CMS ever suggested was the heart team,” Aaker said. “Getting back to that collaborative model is exactly what we need now.”
      Allen Passerallo quote

      Orthopedics braces for increasing demand

      Allen Passerallo, Vizient Vice President, Category Management, Orthopedics

      Why it matters: Health systems are facing a rising tide of orthopedic demand — outpatient procedure volume is expected to climb 24% over the next decade, just as orthopedic surgeon availability remains constrained. The pressure is real: without strategic action now, access to care may suffer — and with it, patient outcomes.

      Elective procedures, from hip and knee replacements to shoulder and ankle surgeries, are surging. These shifts are powered by surgical innovations that enhance safety and shorten recovery, but also by demographic change. Older adults aren’t slowing down; they’re aging well, are more active than ever and living with chronic conditions like osteoarthritis, osteoporosis and obesity. These intersecting trends are fueling a growing and complex patient pipeline.

      “We’re going to continue seeing significant growth in orthopedic procedures over the next decade,” said Allen Passerallo, vice president, category management, orthopedics. “It’s the result of aging, comorbidities, longer lifespans and the fact that older adults are staying active with activities like tennis, golf and pickleball — all of which come with risks of injury. Preparing with a sound strategy to embrace the volume that’s coming — through staffing, outpatient investment and value-based care — is critical.”

      Strategies to consider:

      • Shift procedures to outpatient settings. Hip, knee, spine and shoulder surgeries are increasingly performed in ambulatory surgery centers, and CMS policy changes and payer incentives, including Medicare Advantage mandates, are accelerating this transition. Hospitals should expand ASC partnerships to balance efficiency and maintain access.
      • Invest in minimally invasive approaches. Adopt surgical techniques such as minimally invasive hip replacements and scope-assisted spine procedures to reduce recovery times, improve safety and increase patient willingness to undergo needed procedures.
      • Implement preventive and non-invasive programs. Encourage use of GLP-1 medications, physical therapy and weight management programs to delay or reduce the need for joint replacement, improving patient outcomes while easing system demand.
      • Strengthen orthopedic workforce planning. With surgeon shortages already a concern, health systems should plan aggressively for recruitment, training and staffing to meet future needs. Align staffing models with projected outpatient volume growth.
      • Focus on value-based orthopedic care. Deliver high-quality procedures at lower cost by optimizing efficiency in outpatient settings, aligning with payer expectations and supporting sustainable financial models.
      Related

      Read this blog by Guth and Passerallo to learn more about the hidden economics behind shifting to ACS’s.

      Lisa Goldstein quote

      Plan for Medicare’s financial squeeze

      Lisa Goldstein, Managing Director, Treasury and Capital Markets at Kaufman Hall, a Vizient company

      Why it matters: Medicare is entering a period of unprecedented strain as 10,000 people a day age into the program. By 2030, 20% of the U.S. population will be enrolled as the last of the Baby Boomers qualify. This demographic shift, combined with a declining birth rate and longer life expectancy, makes the financial equation increasingly difficult: more enrollees are drawing benefits while fewer workers will be paying into the system.

      Hospitals already feel the pressure. Medicare accounts for nearly half of revenue at many facilities, thinning margins as reimbursement lags behind cost growth. “One out of every two patients is Medicare,” said Lisa Goldstein, managing director, treasury and capital markets at Kaufman Hall, a Vizient company. “The more Medicare you have, the thinner your margins will be. That reality together with the One Big Beautiful Bill (OBBB) anticipated to decrease healthcare coverage and increase bad debt constrains systems’ ability to reinvest in services, fund capital projects and maintain financial stability.”

      The challenge, however, is not without opportunity. Goldstein stressed that hospitals must treat Medicare pressures as predictable — unlike crises such as COVID — and plan accordingly. “We can pencil out the dollar amount changes and when they’re coming,” she said. “This is not an unknown.”

      Hospitals need disciplined financial management, proactive adoption of value-based models, and growth in lower-cost, ambulatory care to sustain access and quality for an aging population.

      Strategies to consider:

      • Plan, test, monitor: Boards need to know their numbers. “Every type of hospital that’s worth their salt has good planning, testing and monitoring,” she said. “But we’ve got to do it with a much sharper pencil now.”
        • Plan – Build financial impacts into budgets and growth strategies.
        • Test – Stress assumptions and evaluate scenarios such as policy changes or new crises.
        • Monitor – Track performance quarterly and adjust as needed.
      • Understand financial metrics: You don’t need to be an accountant, but you must understand the basic financial metrics hospitals use to budget and make decisions — operating margin, liquidity, cash reserves and debt burden. Leaders should know which metrics they need to improve, and which must be included to guide sound decision-making.
      • Embrace growth strategically: Growth is essential to offset rising costs. “As one CEO said to me recently, ‘Hospitals need to be like trees, and trees are either growing or dying,’” Goldstein said. Hospitals must grow revenue at or above expense growth, but with careful consideration of risk and return.
        Growth takes time. Long-term strategies may require upfront investment and bring short-term pain before delivering results. Leaders must understand the benefits, risks, and timelines tied to each growth initiative.
      • Strengthen ambulatory capabilities: Ambulatory care is no longer optional. With Medicare pushing more procedures outpatient, systems must expand their ability to deliver surgery and other services outside hospital walls. This doesn’t always require ownership of all things ambulatory, but it does demand a cost structure that makes outpatient care efficient and sustainable.
      • Evaluate service lines: Reassess low-volume, low-margin offerings while protecting essential community services. Understand where deficits are unavoidable and where adjustments can protect financial health.
      • Build and protect cash reserves: “Not-for-profit does not mean we are pro-deficit,” Goldstein said. Reserves are critical to withstand volatility and reinvest in care. Leaders should scrutinize every lever — labor, productivity, supply chain, pharmaceuticals and revenue mix — to maintain and grow cash flow.
      • Prepare for value-based care shift: CMS continues to push the shift from fee-for-service to value-based care, with its new mandatory Transforming Episode Accountability Model (TEAM) launching in January 2026 across nearly 200 markets. Hospitals should prepare for bundled payments, ACOs and other population-health models by assessing their readiness for downside risk, including data analytics, clinical protocols and cost management capabilities.
      • Stay informed: Boards don’t need to be in Washington, D.C., or at their state capitals, but they must stay informed through leadership teams, hospital associations and industry groups. Policies shift quickly — education and awareness are essential.
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