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

                                    Mar 1, 2024 - Firms Raise Prices
                                    • Home healthcare services slightly raised their prices during 2023, according to the US Bureau of Labor Statistics (BLS). Employment and average wages for nonsupervisory employees increased moderately during 2023, according to the BLS. Industry sales are forecast to increase at a 6.25% compounded annual rate from 2023 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • 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.
                                    • There were 95 home health and hospice merger and acquisition deals in the 12 months ending on November 15, 2023, according to professional services firm PwC, down from 114 during the same period a year earlier. The deals were worth $4.7 billion. “Our outlook for 2024 health services deals is cautiously optimistic,” PwC analysts noted. “While general apprehension from all parties involved in the deal cycle continues, corporate and private equity players alike continue to hold large levels of capital that need to be deployed."
                                    • Hourly pay rates for licensed practical nurses (LPNs) at home health agencies increased nearly 4% from 2022 to 2023, according to the latest Home Care Salary & Benefits report from Hospital & Healthcare Compensation Service. That rate of increase represents a significant drop from the year before. Turnover rates for RNs, LPNs and home care aides decreased for the second year in a row, coming in at 28% in 2023.
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