---
type: source
title: "PACE Market Assessment: For-Profit Expansion and Growth (Final Report March 2025)"
author: "NORC at the University of Chicago"
url: https://www.norc.org/content/dam/norc-org/pdf2025/PACE%20Market%20Assessment_For-Profit%20Expansion%20and%20Growth_Final%20Report%203.17.2025.pdf
date: 2025-03-17
domain: health
secondary_domains: []
format: report
status: unprocessed
priority: high
tags: [pace, all-inclusive-care, elderly, capitated-care, scaling-barriers, for-profit, integrated-care]
---

## Content

### PACE Program Overview

- Program of All-Inclusive Care for the Elderly: government-funded for individuals 55+ needing nursing home-level care
- Single provider and payer for 100% of member's medical, social, and psychiatric needs
- Entirely replaces Medicare and Medicaid cards
- Most fully integrated capitated model in existence

### 2025 Enrollment and Growth

- January 1, 2025: **80,815** enrolled
- End of 2025: **90,580** — increase of 9,765 (12% annual growth)
- 198 programs in 33 states + DC
- Over 376 centers serving ~87,000 participants (September 2025 data)

### Market Concentration

- Nearly half of all enrollees served by **10 largest parent organizations**
- Most parent organizations operate single program in one state
- Only **13 states** have 1,000+ enrollees
- Over half of enrollees concentrated in **3 states**: California, New York, Pennsylvania

### Scaling Barriers

1. **Capital requirements**: Large initial investment required for PACE center + care delivery infrastructure
2. **Awareness deficit**: Low awareness among potential enrollees and referral sources
3. **Economies of scale**: Insufficient enrollee concentration in service areas
4. **Geographic concentration**: 3-state concentration limits national model validation
5. **Financial barriers**: Eligibility contingent on Medicare + Medicaid status
6. **Regulatory complexity**: State-by-state approval process
7. **Organizational structure**: Single-state operators can't leverage multi-market efficiencies

### For-Profit Entry

- For-profit PACE programs beginning to enter the market
- Potential to bring capital and operational scaling capacity
- But tension with PACE's mission-driven origin and vulnerable population focus

### Why PACE Matters Structurally

- PACE takes FULL capitated risk for the most complex, costly Medicare/Medicaid beneficiaries
- If the attractor state is prevention-first capitated care, PACE is the existence proof
- Average PACE member: 76 years old, 7+ chronic conditions, nursing-home eligible
- These are the patients MA plans are LEAST equipped to serve well
- PACE demonstrates that full integration works — the question is why it hasn't scaled

## Agent Notes
**Why this matters:** PACE is the control experiment for capitated, fully integrated care. If VBC's attractor state is real, PACE should be the fastest-growing model — it's been running since the 1970s (On Lok in San Francisco). The fact that it serves only ~90K people after 50+ years is itself a data point about the barriers to the attractor state.
**What surprised me:** The 12% growth in 2025 — faster than any recent year. Combined with for-profit entry, this suggests PACE may finally be approaching an inflection. But 90K out of 67M Medicare-eligible is still 0.13% penetration. The gap between model elegance and market reality is enormous.
**KB connections:** [[the healthcare attractor state is a prevention-first system where aligned payment continuous monitoring and AI-augmented care delivery create a flywheel that profits from health rather than sickness]], [[value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk]]
**Extraction hints:** Claims about: (1) PACE as existence proof that full capitation works for complex patients, (2) PACE's 50-year failure to scale as evidence of structural barriers to the attractor state, (3) for-profit PACE entry as potential scaling inflection

## Curator Notes
PRIMARY CONNECTION: [[the healthcare attractor state is a prevention-first system where aligned payment continuous monitoring and AI-augmented care delivery create a flywheel that profits from health rather than sickness]]
WHY ARCHIVED: PACE is the strongest counter-evidence and supporting evidence simultaneously — it proves the model works AND that structural barriers prevent scaling. Essential for honest distance measurement.
EXTRACTION HINT: The 0.13% penetration after 50 years is the key number. Compare to MA's 54% — what does the gap reveal about what actually scales in US healthcare?
