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

                                    Nov 14, 2023 - Firms Raise Prices
                                    • Home healthcare services slightly raised their prices in the first eight months of 2023 to match the slowly rising consumer demand for their services. Labor costs increased, as employment levels and wages for nonsupervisory employees increased moderately during the period.
                                    • A Bronx, NY, program is working with providers to provide mental health care in the home. The Geriatric Mental Health Initiative allows providers like psychiatric social worker Evelyn Pozo to visit older adults and work once a week for 45 minutes to an hour with them on coping skills to reduce their depression, anxiety, and other issues. Pozo said that providing mental health support in the home allows patients to feel more comfortable, increases accessibility, and provides privacy, which is valuable because mental health conversations can make people feel vulnerable.
                                    • A company’s workforce — and collective experience and dedication — is playing an even larger role in home healthcare mergers and acquisitions, according to Home Health Care News. Employee tenure – both at the caregiver and back-office level – can be an indicator of a company’s stability, resilience, and positive culture. Culture isn’t something that is necessarily quantifiable, however. That’s what makes merger and acquisition deals so risky in certain situations. Tenure, however, can be a data point for buyers to look into. The importance of tenure is different based on the organization and based on the type of worker. “Caregivers and the supervisors at the branch levels — those who touch the clients — are most important in smaller acquisitions,” said Rich Tinsley, chief development officer of Help at Home. “As prospective acquisitions get larger, the branch administration and regional leadership tenure start to play a larger factor in a successful change management execution.”
                                    • Home health and hospice merger and acquisition activity increased 20% in Q2 2023 compared to the prior quarter, but deals were down 14% compared with Q2 2022, according to LevinPro LTC. Home health deals exceeded deals in home hospice, palliative care, and durable medical equipment/respiratory home care. Home health saw 12 deals during the period compared with five deals each in the other markets. Private equity firms or their portfolio companies represented 33% of the buyers in home health and hospice in the second quarter.
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