---
type: claim
domain: health
description: "McKinsey projects 25% of Medicare cost of care could migrate from facilities to home settings enabled by RPM technology and hospital-at-home models"
confidence: likely
source: "McKinsey & Company, From Facility to Home: How Healthcare Could Shift by 2025 (2021)"
created: 2026-03-11
---

# Home-based care could capture $265 billion in Medicare spending by 2025 through hospital-at-home remote monitoring and post-acute shift

Up to $265 billion in care services—representing 25% of total Medicare cost of care—could shift from facilities to home by 2025, a 3-4x increase from current baseline (~$65 billion). This migration is enabled by three converging forces: proven cost savings from hospital-at-home models (19-30% savings at Johns Hopkins, 52% lower costs for heart failure patients), accelerating technology adoption (RPM market growing from $29B to $138B at 19% CAGR through 2033, with 71M Americans expected to use RPM by 2025), and demand-side pull (94% of Medicare beneficiaries prefer home-based post-acute care, with COVID permanently shifting care delivery expectations).

The services ready to shift include primary care, outpatient specialist consults, hospice, behavioral health (already feasible), plus dialysis, post-acute care, long-term care, and infusions (requiring "stitchable capabilities" but technologically viable). The gap between current ($65B) and projected ($265B) home care capacity represents the same order of magnitude as the value-based care payment transition.

## Evidence

- Johns Hopkins hospital-at-home programs demonstrate 19-30% cost savings versus traditional in-hospital care
- Systematic review shows home care for heart failure patients achieves 52% lower costs
- Remote patient monitoring market projected to grow from $29B (2024) to $138B (2033) at 19% CAGR
- AI in RPM segment growing faster at 27.5% CAGR, from $2B (2024) to $8.4B (2030)
- Home healthcare is the fastest-growing RPM end-use segment at 25.3% CAGR
- 71 million Americans expected to use RPM by 2025
- 94% of Medicare beneficiaries prefer home-based post-acute care
- 16% of 65+ respondents more likely to receive home health post-pandemic (McKinsey Consumer Health Insights, June 2021)

## Relationship to Attractor State

This facility-to-home migration is the physical infrastructure layer of [[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]]. If value-based care provides the payment alignment and continuous monitoring provides the data layer, the home is where these capabilities converge into actual care delivery. The 3-4x scaling requirement ($65B → $265B) matches the magnitude of the VBC payment transition tracked in [[value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk]].


### Additional Evidence (extend)
*Source: [[2021-02-00-mckinsey-facility-to-home-265-billion-shift]] | Added: 2026-03-16*

McKinsey projects the $265B shift requires a 3-4x increase in home care capacity from current $65B baseline. Johns Hopkins hospital-at-home demonstrates 19-30% cost savings vs. in-hospital care, while home-based heart failure management shows 52% lower costs. The enabling technology stack includes RPM market growing from $29B to $138B (2024-2033) at 19% CAGR, with AI in RPM growing 27.5% CAGR ($2B to $8.4B, 2024-2030). 71M Americans expected to use RPM by 2025. Demand signal: 94% of Medicare beneficiaries prefer home-based post-acute care, with 16% of 65+ respondents more likely to receive home health post-pandemic.

---

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]]
- [[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]]

Topics:
- domains/health/_map