The aging population and the prevalence of chronic diseases underpin industry growth.
Los Angeles, CA (PRWEB) August 22, 2012
The Home Car Providers industry is becoming one of the fastest growing healthcare industries in the US. According to IBISWorld industry analyst Anna Son, "home care saves patients billions of dollars every year by treating them in their homes instead of hospitals." An aging population, the prevalence of chronic disease, growing physician acceptance of home care, medical advancements and a movement toward cost-efficient treatment options from public and private payers have all fostered industry growth. During the five years to 2012, these factors have contributed to an average annual revenue growth of 4.6%. In 2012, revenue is expected to increase 3.6% to $69.8 billion.
Despite strong growth, industry operating profit has been under pressure. The largest payers for home care services, such as Amedisys Inc. and Gentiva Health Services Inc., are government programs that include Medicare and Medicaid. Federal and state budgets have been shrinking, and the recession further reduced them. Thus, declining federal funding played a role in operating profit margin falling to an expected 6.9% of revenue in 2012, compared with 7.1% in 2007. "Industry operators have increased consolidation activity in an effort to combat lower profitability," says Son. The Home Care Providers industry is traditionally highly fragmented and the largest four firms in this industry are expected to account for a relatively small portion of total revenue in 2012. Although concentration remains low, larger companies have been expanding through mergers and acquisition. Larger companies are better able to negotiate with suppliers and can acquire the medications and materials that are used in home care at lower prices. Thus, Census Bureau data suggests that concentration has increased over the past five years.
Consolidation is forecast to continue in the five years to 2017, in light of reimbursement cuts expected to persist and skilled personnel shortages. These factors will strain operating profit further, causing margins to contract moderately by 2017. In an effort to spur new demand and maintain pricing, industry operators are projected to focus more on chronic disease management, which is a system of coordinated healthcare interventions and communications with the emphasis on patient self-care. This area of healthcare is projected to grow in upcoming years, which will provide the industry with the opportunity to compete effectively with institutional care providers, such as hospitals. Industry revenue is forecast to grow at a moderate rate during the five years to 2017. For more information, visit IBISWorld’s Home Care Providers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that primarily provide services in the home. These services may be medical or nonmedical and include services such as skilled nursing care, personal care, homemaker and companion services, physical therapy and medical social services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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