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There aren't enough nursing-home beds to meet demand

Do you think you will never be a resident in a nursing home? You're probably right — but just not for the reasons you may be thinking.

The fact is, as baby boomers approach retirement age, there will be less and less nursing-home space available.

Senior man nursing home
Terry Vine | Getty Images

Here are some points you may want to ponder: The Census Bureau reported that in 2006, there were 78.6 million boomers in the U.S. Many of them will turn 70 by 2020. By 2030, about 20 percent of the nation's population will be 65 and over. That compares with 13 percent right now.

So we are aging, and the problem becomes how we will care for all these people. To that point, from 2000 to 2009 the total number of nursing homes in the U.S. decreased by 9 percent. Additionally, from 2007 to 2011 new construction of nursing-home units decreased by 33 percent.

The bottom line is, there simply will not be enough beds to serve an aging population.

We have all heard the stories about an aging parent, loved one or friend having to be administered into a skilled nursing home. The thought that it may one day happen to us sends a shiver down our spine. It is something that no one wants to think about, and for many of us who are in the throes of planning for retirement, this possibility is usually met with a shrug and the response that "I will never go into a place like that."

Believe it or not, that response is a lot closer to the truth than many of us have ever imagined, and the rationale is based on three hard truths: the basic law of supply and demand, demographics and the nation's lack of health-care providers.

There were roughly 15,642 nursing facilities in the U.S. in 2010, according to the Kaiser Family Foundation. This may appear to be plenty, but the total number of beds in these facilities stood at about 1.66 million in 2012.

"Of the 76 million baby boomers who are heading toward retirement, roughly 70 percent … will need some form of long-term care."

And when we look at the occupancy rate, things get a bit scarier. In 2012, the occupancy rate stood at close to 89 percent, with roughly 1.36 million beds being occupied. The question that begs to be asked is: Will this occupancy rate increase or decrease?

This brings us to the second reason why you probably won't set foot in a long-term care facility.

According to the Department of Health and Human Services, of the 76 million baby boomers who are heading toward retirement, roughly 70 percent (about 54 million people) will need some form of long-term care, with close to 13 million of those needing a stay of longer than three years in a skilled nursing facility.

With an occupancy rate of 89 percent — leaving fewer than 300,000 beds available across the country — how will these 13 million people find a way into those vacant beds?

This leads us to the third major issue we will face as the largest segment of our population ages, and that is the nation's lack of health-care providers.

The simple solution may just be to open more facilities, but even that entails hurdles that our demographics dictate we can't simply hop over, and not just for fear of breaking a hip.

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According to the American Medical Association, this country is facing a shortage of physicians. Due to enrollment levels in our colleges and universities being capped at the same rates we had in 1993, there just aren't enough to be on staff to write prescriptions and provide medically necessary care in the facilities across the U.S. today, let alone be enough to open up even more facilities.

This shortage of caregivers unfortunately doesn't end with just physicians, as the American Association of Colleges of Nursing is reporting that "over the next 20 years, the average age of RNs will increase and the workforce will plateau as RNs retire." This is precisely why the Bureau of Health Professions projected back in 2005 that the nursing shortage will worsen, and this nation may ultimately see a shortfall of 800,000 nurses by 2020.

For LTC procrastinators, the chances of you personally stepping foot, or being wheeled into, a nursing facility may indeed seem pretty slim.

And those who have opted to put this issue on the back burner may find themselves completely shut out as administrators at these skilled nursing facilities will have the option of selecting those who can afford the care versus those who can't.

— Dan McGrath, co-founder of Jester Financial Technology