---
type: claim
domain: health
description: "The facility-to-home care migration requires 3-4x capacity increase and is structurally equivalent to the value-based care payment transition"
confidence: experimental
source: "McKinsey & Company, From Facility to Home (Feb 2021)"
created: 2026-03-11
secondary_domains: []
---

# The facility-to-home care migration requires 3-4x capacity increase because the gap between current and projected home care is as large as the VBC payment transition gap

McKinsey projects that up to $265 billion in care services—representing 25% of total Medicare cost of care—could shift from facilities to home by 2025. This represents a 3-4x increase versus the current baseline of approximately $65 billion in home-based care.

The structural insight is not the dollar figure itself but the **capacity boundary problem**: the gap between current ($65B) and projected ($265B) home care capacity mirrors the value-based care payment transition gap. Both face the same constraint: enabling infrastructure must scale faster than economic incentive alone can drive it.

## Services Addressable at Home

**Already feasible for home delivery:** Primary care, outpatient-specialist consults, hospice, outpatient behavioral health

**Stitchable capabilities requiring technology integration:** Dialysis, post-acute care, long-term care, infusions

## Demand Signal

- 94% of Medicare beneficiaries prefer home-based post-acute care
- 16% of 65+ respondents reported being more likely to receive home health post-pandemic (McKinsey Consumer Health Insights, June 2021)
- COVID catalyzed telehealth adoption and created a permanent shift in care delivery expectations

## Enabling Technology Stack

The projection assumes rapid scaling of the technology layer that makes home-based care safe:

- Remote patient monitoring market: $29B → $138B (2024-2033), 19% CAGR
- AI in RPM: $2B → $8.4B (2024-2030), 27.5% CAGR
- Home healthcare is the fastest-growing RPM end-use segment at 25.3% CAGR
- 71M Americans expected to use RPM by 2025

This technology scaling is not optional—it is the infrastructure that makes home-based care economically viable and clinically safe. Without continuous monitoring, the cost advantage disappears and quality risk increases.

## Evidence of Cost Advantage

- Johns Hopkins hospital-at-home program: 19-30% cost savings versus in-hospital care
- Systematic review of heart failure home care: 52% lower costs than facility-based management
- RPM-enabled chronic disease management: significant reduction in avoidable hospitalizations

The projection assumes this cost advantage persists at scale and that quality does not degrade—both testable claims given that the 2025 timeline has passed.

## Critical Assumption

The projection rests on three simultaneous transitions: technology adoption (RPM scaling), workforce scaling (home health capacity), and regulatory adaptation (payment and licensure). The claim is that all three must proceed without friction. Actual 2025-2026 data on home care migration would confirm or challenge this assumption.

---

Relevant Notes:
- [[continuous health monitoring is converging on a multi-layer sensor stack of ambient wearables periodic patches and environmental sensors processed through AI middleware]]
- [[healthcares defensible layer is where atoms become bits because physical-to-digital conversion generates the data that powers AI care while building patient trust that software alone cannot create]]
- [[value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk]]

Topics:
- [[domains/health/_map]]
