Home Health Care Services
Companies in this industry provide a range of skilled nursing and other health care services, as well as personal care services, to patients in their homes. Major companies include Amedisys, Apria, CenterWell Home Health, and Lincare (all based in the US), along with Allied Healthcare (UK), LVL Médical (France), and SE Health (Canada).
Expenditures on home health services vary significantly from country to country, according to the Organisation for Economic Co-operation and Development (OECD). Most Europe countries spend a significant amount for outpatient care, which include home-based curative and rehabilitative care and ancillary services. Funding sources include private pay, taxation (in those countries with nationalized health care systems), compulsory or voluntary insurance, and charitable contributions or funding from nongovernmental organizations.
The US home health care industry includes about 34,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $85 billion.
Competitive Landscape
Health reform efforts are driving down reimbursement for medical services, including home health care, and payments are increasingly based on whether providers meet quality standards. At the same time, care is being pushed into lower-cost settings, giving home health agencies an advantage as they provide an alternative to costly nursing home and hospital care. Populations are aging in nations around the globe, and elderly residents increasingly prefer to stay in their homes.
Home health firms struggle with thin margins, making efficiency the top priority. Qualified nurses are in short supply, and aide positions are low-paying and physically demanding. Companies often provide training programs to enhance employee skills. Some market disruptors are looking to shift the employee payment model to improve wages, benefits, and employee loyalty. Established companies and disruptors alike are aiming to improve efficiencies via technology tools.
Large companies have some economies of scale in sales and marketing, purchasing, and human resources administration. Small companies can compete successfully by serving a local market. The US industry is fragmented: the 50 largest companies account for about 30% of revenue.
Competitive Advantages:
Payer Relationships - Home health agencies can participate in a number of Medicare programs that aim to improve care and lower costs. Companies that meet Medicare's performance measures or participate in payment pilot programs can gain more favorable reimbursement rates. Companies can also benefit from building a large private payer client base.
Referral Networks - Companies can establish referral networks through marketing and branding initiatives, as well as by maintaining a strong reputation for quality care. Agencies must form relationships with complementary service providers such as assisted living centers, hospitals, senior service agencies, and physicians.
Tech Tools - Home health entities can gain efficiencies by embracing technology that enables care management and coordination. Companies can coordinate scheduling, clinical documentation, and back-office processes through advanced software. Some firms are using remote health management and telehealth systems to engage patients and monitor chronic conditions.
Companies to Watch:
Apria Healthcare is a top provider of home nursing services and home health equipment in the US. Its main division provides home oxygen therapy and delivers and maintains respiratory equipment through about 300 branches. The company also provides other direct care services and general home medical supplies such as walkers and hospital beds.
Amedisys operates 300 home health agencies in about 35 states across the US, offering skilled nursing and home assistance for patients in recovery or suffering from chronic ailments, as well as personal assistance with daily activities.
Kindred at Home, which is jointly owned by Humana and private equity firms TPG and WCAS, is a national provider of home health and hospice care. It operates from 800 locations in 40 states provide care ranging from post-acute care treatment to housekeeping. The organization expanded significantly through the 2015 acquisition of Gentiva Health Services.
Products, Operations & Technology
The home health care industry includes medical and skilled nursing services; medical equipment, supplies, and medication services; personal care (such
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Glossary of Acronyms