Home Care Providers in the US Industry Market Research Report from IBISWorld has Been Updated

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In the five years to 2013, industry growth has been fostered by an aging population, the prevalence of chronic disease, strengthening physician acceptance of home care and a continued movement toward cost-efficient treatment options from public and private payers; revenue will continue to grow over the next five years as operators focus on chronic disease management to better compete with other institutional care providers, such as hospitals. For these reasons, industry research firm IBISWorld has updated a report on the Home Care Providers industry in its growing industry report collection.

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The aging population and the prevalence of chronic diseases underpin industry growth

The Home Care Providers industry is becoming one of the fastest growing healthcare industries in the United States. Home care saves patients billions of dollars every year by treating them in their homes instead of in 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,” IBISWorld industry analyst Anna Son says. Over the five years to 2013, these factors have contributed to an estimated average annual revenue growth rate of 4.8%. In 2013, revenue is expected to increase 4.2% to $74.2 billion.

Despite strong growth, industry profitability has been under pressure. The largest payers for home care services are government programs, including Medicare and Medicaid. Over the past five years, federal and state budgets have been shrinking, and the recession only exacerbated this decline. Decreasing federal funding has thus resulted in reimbursement cuts for the industry and has suppressed operating profit. “Industry operators have increased consolidation activity in an effort to combat lower profitability,” Son says. 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. Since 2008, the number of firms in the industry has grown at a slower annualized rate of 3.8%, relative to the previous five-year period. In 2013, the number of home care companies is expected to reach about 303,440 in the United States.

The Home Care Providers industry is highly fragmented. Market share concentration for home care providers tends to vary across segments. The largest four firms in this industry include Apria Healthcare Group, Lincare Holdings , Gentiva Health Services and Amedisys. Although concentration is still low, the big players have been getting bigger. The Blackstone Group, a prominent private equity and investment management firm, acquired Apria Healthcare Group for nearly $1.6 billion in 2008, making it one of the largest transactions in the industry.

Consolidation is forecast to continue in the five years to 2018 in light of reimbursement cuts that are expected to persist, and a shortage in skilled personnel. These factors will strain operating profit further, pushing margins in 2018. In an effort to spur new demand and maintain pricing, industry operators are expected 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 anticipated 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 in the five years to 2018. 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 skilled-nursing care, personal care, homemaker and companion services, physical therapy and medical social services.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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