Home Healthcare Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 25,700 home healthcare service providers in the US offer skilled nursing and other types of health-related services in the home. Major service categories include traditional home healthcare services (with or without rehabilitative services), home hospice care, home nursing care, homemaker and personal care, home infusion therapy, and the rental or lease of goods and/or equipment. Companies may specialize in a particular service, such as respiratory therapy or hospice care.

Dependence On Third Party Payers

Home healthcare services providers are dependent on third party payers, including Medicare, Medicaid, private insurance companies, and managed care organizations, as sources of revenue.

Risk Of Malpractice

The inherent risk in providing healthcare outside a traditional setting exposes companies to the risk of malpractice.

Industry size & Structure

The average home healthcare services provider operates out of a single location, employs about 61 workers, and generates $4 million in annual revenue.

    • The home healthcare services industry consists of about 25,700 firms that employ 1.5 million workers and generate $116 billion annually.
    • The industry is fragmented; the top 50 firms account for 33% of industry sales.
    • Large companies include Apria Healthcare, Lincare Holdings, Amedisys, and Kindred at Home (formerly Gentiva Health Services).
                                    Industry Forecast
                                    Home Healthcare Services Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 14, 2024 - Firms Raise Prices
                                    • Home healthcare services slightly raised their prices during the first quarter of 2024, according to the US Bureau of Labor Statistics (BLS). Home healthcare industry employment increased moderately during the first quarter of 2024 while average wages for nonsupervisory employees were unchanged, according to the BLS. Industry sales are forecast to increase at a 6.44% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • Consumers overwhelmingly prefer home-based care to facility-based care but preexisting socioeconomic challenges or difficulties coordinating caregivers can lead some people to favor facility-based alternatives, according to a study published in JAMA Network Open. A survey of adults who had an average age of 62.6 years about their willingness to pay for care in various settings showed that on average, respondents would spend an extra $51.81 per day for care that takes place in the home compared with facility-based care. They also were more willing to pay more for care that can reduce their recovery time or reduce the burden on their unpaid caregivers. Family caregivers also prioritized higher-quality care, even if it came with a heftier price tag.
                                    • Increased fundraising by private equity (PE) firms in 2023 is not expected to translate into increased health care industry deal counts in 2024, according to Home Health Care News. “Dry powder or available capital is not always indicative of future dealmaking,” Rebecca Springer, lead health care analyst at PitchBook, told Home Health Care News. “The typical investment period for a 10-year fund is five years with some additional flexibility through a number of technicalities. In 2024, we anticipate that PE health care managers will focus on deploying capital into existing portfolio companies, lower-middle-market platforms, and occasionally pursue opportunistic carve outs.” Health care’s share of global PE deal count peaked at 13.7% in 2020. That number fell to 10.8% in 2023— its lowest level since 2015.
                                    • Medicare Advantage patients receive fewer home health visits and have worse outcomes than traditional Medicare recipients, according to a study of nearly 300,000 Medicare beneficiaries conducted by University of Washington Medicine researchers. The research team found that Medicare Advantage patients had shorter home health lengths of stay, fewer visits by nursing and therapy clinicians and home health aides, lower rates of improvement in self-care and mobility function, and higher rates of discharge to the community from home health. The authors said that higher rates of community discharge, combined with lower functional improvement, may adversely affect patients’ independence and increase their caregivers’ burden for people with Medicare Advantage coverage. Medicare Advantage beneficiaries now number about 30 million, recently surpassing the number of traditional Medicare recipients in the United States.
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