Happy Hump Day! I hope all readers, followers, and visitors had a great Christmas Holiday.
This post will likely wrap-up 2023 for me as tomorrow, I begin a bit of travel to see some long-time friends and celebrate the New Year. I am not much for resolutions into the new year as I try to concentrate always on a few “self” improvement pieces around being a better husband, friend, family member and co-worker/partner than the year before. Relentless incrementalism is how I approach life.
What seemed like a fun thing to do as 2023 comes to a close is to pull out the old crystal ball and see if I can divine a few observations about stuff political, economic, and healthcare/senior living/post-acute care for 2024. Feel free to comment or chime in if you wish. I’ll pull this post back out about mid-year and check-in on my “prognostications”. Happy Hump Day and Happy New Year!
- Neither Joe Biden nor Donald Trump will be elected President in 2024.
- The U.S. economy will enter a recession in the first quarter of 2024…unless the bond yield curve inversion is no longer a tell-tale sign of things to come.
- The Federal Reserve will cut rates by .25% in March, trying to forestall a recession. Four additional rate cuts will occur in the year for a total reduction in the Federal Funds Rate of 1 point.
- Unemployment will tick over 4% by the second quarter and remain at the 4% level for the year.
- Home mortgage rates will decline into the 5.5% to 5.75% range.
- The 10-year Treasury yield will hover around 3.25% by the third quarter of 2024.
- Despite the massive impact healthcare spending has on the U.S. economy, particularly the amount of spending on federal entitlements like Medicare and Medicaid, no political candidate will focus any significant portion of their campaign on reform measures for Medicare, Medicaid, or Social Security.
- The war in Ukraine will not end in 2024.
- Home prices will remain at record high levels.
- Home sales will improve in the second half of 2024 but by comparison to 2021, they will remain suppressed.
- Senior housing development, new unit starts, will remain suppressed. An uptick will begin to occur in the third quarter as lending rates soften.
- Lifestyle housing will remain hot and accelerate in 2024.
- SNF closures will continue, especially free-standing.
- Rural hospital closures will continue at a pace similar to 2023.
- For those providers/systems/investors with cash, 2024 will provide lots of buying opportunities of distressed or troubled assets. Deals will be plentiful.
- Single site or small footprint CCRCs will continue to struggle, and affiliations will remain high. Non-profits will dominate this trend.
- Higher acuity Assisted Living and home health will continue in earnest.
- Staffing challenges will remain and continue to impact occupancy growth and sales growth in every sector.
- AI and issues of algorithms used to minimize benefits and length of stay on the part of Medicare Advantage plans will continue to be an issue in 2024.
- Litigation, especially COVID related, will escalate in 2024. Liability premiums will have a continued trend of larger than historic increases. Carriers will continue to shy away from the industry indirectly, raising deductibles and retention levels.
- The 2024 (U.S.) budget will come in at a deficit of $1.9 trillion.
- CPI will average 3.3% for 2024. GDP will grow at an annualize rate of 1.7%. The early year recession will hurt GDP growth.