Home Health Industry Analysis – September 2014

Home health and home care are essential elements of healthcare, but are usually the first sectors to face criticism.  But home health continues to be a hot area for development.  Everyone has seen the ads for private duty home care franchises on TV and in different print publications.

The stats back it up – in the coming years, the baby boomers are expected to retire and live longer.  But they don’t want to be treated with institutional care.  The ALFs and the SNFs are likely to be in for a shock as many baby boomers opt to stay in their own homes rather than turn over their nest eggs and accumulated property value gains.

But coming back to the present, the future for home care and home health remains strong. The industry will go through major changes over the coming years, but even Congress picked up on something which doesn’t seem to happen often.  Who would have thought someone in Congress was paying attention?

Senator Tom Harkin might be planning for his own future in proposing new legislation.  The Senator from Iowa is spearheading legislation to push the Olmstead ruling, which requires Medicaid to distribute in more equal methods funding for home health and community based care rather than diverting most funding to nursing homes. Senator Harkin’s bill would remove the restriction requiring that certain diagnoses must be treated in a SNF and allow the patient to be treated at home, which we all know does provide better outcomes with quality care.

We are already seeing this trend taking effect with nursing home occupancy rates slipping this year, as fewer SNFs are being constructed and those already open, are experiencing more empty beds.  From 2000 to 2010, the amount of Americans living in a SNF has decrease by 20% from 1.6 million residents to 1.3 million residents in 2010.  This decline is, once again, influenced by the expansion and increase in quality of home based services.

The market and demand for home health and home care is there. But you must be ready to act and not just think of today or tomorrow. You need to plan and you need to be able to provide the services that patients and clients demand.  Your agency needs to be a resource not only for referral sources but for the community at large.

Positioning your agency now will allow you to start building relationships with potential future admissions, whether they are private pay, private insurance, Medicaid or Medicare.  Don’t wait too long to start planning for growth and where you want to take your agency.  By starting to work on this plan now, you will be able to implement your strategy and tactics when the time comes in the next few years.