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 27,400 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 58 workers, and generates $4.1 million in annual revenue.
- The home healthcare services industry consists of about 27,400 firms that employ 1.6 million workers and generate $113 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
Recent Developments
Jul 13, 2024 - Prices Unchanged
- Home healthcare services kept prices unchanged during the first five months of 2024, according to the US Bureau of Labor Statistics (BLS). Home healthcare industry employment and average wages for nonsupervisory employees increased slightly during the first five months of 2024, 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.
- Home health workforce shortages and rising wages are key reasons for rapidly-increasing home healthcare costs, according to Marc Cohen, co-director for the Leading Age Long Term Services and Supports Center at the University of Massachusetts-Boston. Costs for home healthcare for the elderly and bed-ridden have increased 14.2% during the 12-month period ending in March 2024, according to the US Bureau of Labor Statistics (BLS). That's the largest percent increase in home healthcare costs during a 12-month period since the BLS began collecting data on such costs in 2005. The median cost for a home health aide in 2023 was $33 an hour and that for a homemaker aide was $30 an hour, according to insurance company Genworth. The direct care sector is expected to add over 1 million new jobs by 2031, according to health care data analytics firm KFF, but those additional jobs will not be enough to meet the country’s rising eldercare needs.
- The US Centers for Medicare & Medicaid Services (CMS) is collecting feedback on the Medicare Advantage (MA) program through a request for information process. MA plans have been criticized widely in the home healthcare industry for their cumbersome prior authorization requirements and provider reimbursement rates that are typically far below fee-for-service Medicare, according to Home Health Care News. MA 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.
- 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.
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