2017 Home Care Market Report
The home care market was valued at $100 billion in 2016, and is projected to reach $225 billion by 2024. Two factors in particular are driving this growth: an aging population adding more seniors to the market, and lower overall costs for home care when compared to other post-acute care settings. As the market continues to grow, the number of companies providing home care services is expected to increase from 37,000 in 2016 to nearly 46,000 by 2021.
Home Health Agency Margins Remain High
Home health agency profit margins for the largest payer, Medicare, have exceeded 10% each year for 14 years beginning in 2001.
• The Centers for Medicare and Medicaid Services (CMS) currently recognizes 11,802 companies as Medicare certified home health agencies.
Hospice Care Growing Rapidly
More than 4,000 agencies offer hospice care nationwide, providing care to 1.34 million annually.
• Medicare is the largest single payer in hospice care, providing the market segment with 90% of its revenues.
• From 2016 to 2019, Medicare spending on hospice care is projected to grow from $18 billion to $21.6 billion.
DME Providers Face Increasing Challenges
Competitive bidding has contributed to reduced Medicare spending on DME products and services.
• Because of deep reimbursement cuts, DME products are covered at an average of 88% of the cost of providing them.
• The industry is consolidating quickly due to the impact of the competitive bidding program and other factors.