The nursing home industry has faced significant scrutiny in recent years and, in particular, in recent months.
According to Jacoby&Meyers, since the covid-19 pandemic, many nursing homes have faced questions about their handling of the situation. The majority of coronavirus deaths in the U.S. are thought to have been linked to nursing homes.
That left many families feeling fearful about the care their loved ones were receiving in nursing home facilities.
That’s one reason for the growth of the home health industry, but there are others.
If you’re looking for a new business opportunity, you might consider a home health business after considering the following.
Growth in the Home Care Industry
Along with a potential distrust of long-term living and care facilities, another reason the home care industry is seeing explosive growth may simply be linked to the fact that much of America’s population is hitting their elderly years.
According to the Bureau of Labor Statistics, there is an expected 69% growth rate for people working in home health positions through this year, and 70% growth is expected for personal care aide positions.
Along with the general reasons named above, other possible reasons include:
- Home health may be more affordable than having your loved one in a nursing home or assisted living facility.
- A lot of people understand how important it can be to let older people stay in their own homes, where they’re comfortable and can enjoy a sense of independence.
- Home health businesses can offer clients convenience because there are fewer instances where you need to take a loved one out for medical appointments.
- It’s estimated that Americans spend anywhere from $211 to $306 billion a year on long-term care. By 2050, almost 21% of the population will be 65 and older, and most of this growth will occur through 2030.
How to Start a Home Care Business
The option that people typically consider when they want to start a home care business is a non-medical care business. That’s a little different than home health care, although some of the services could overlap.
With a non-medical home care business, the employees manage things like personal care, and they assist clients with daily activities such as housekeeping and meal preparation.
There are also medical home health agencies that hire skilled, licensed nursing professionals primarily. They usually deliver both rehab and nursing services, but under the order of a physician. There are stringent guidelines placed on these types of businesses.
If you want to start a home care business, you have a few options to get started.
- You can start your own company completely from scratch. You’ll pay less in startup fees, but this is riskier. You need to know the industry or get to know it, and you should probably have previous business experience.
- You can buy a company that already exists, which will cost more upfront, but you have less risk. You’ll need a high level of due diligence if you’re going to buy an existing, but independent company.
- One of the more popular options in home health is to buy a franchise. You’ll pay more initially, but with that comes a proven business model.
- You can also join a network, which is a middle ground between owning and franchising a home care business.
- Home care is considered fairly recession-proof. Even when there’s economic uncertainty, people still need home care and health care in general.
If you’re completely new to the home health world or even if you’re not, many people find the upsides of a franchise are worth the initial costs. You get the tools and technology you need to start your business, as well as an established brand.
They’ll also help you as far as procedures and policies you’ll need to follow.
Most franchisors do have strict financial requirements, and there are limits to your freedom as far as how you go about operating your business. You’ll have to follow specific corporate policies, and if you don’t you could lose your business. Of course, that can be beneficial because it can keep you on the right side of regulatory requirements.
While it can be helpful, you don’t have to have a health care background to start this kind of business. Having some business experience is valuable, though.
Create a Business Plan
Regardless of the model you choose, you will need to have a business plan.
A business plan includes:
- An executive summary with the basics of your company
- A company description outlining your mission and goals
- Details of the services you’ll provide
- An outline of the ownership, management and organizational structure of the business
- A plan for marketing and this should include pricing
- An operational plan
- A financial plan
Registering with the State
There are going to be regulatory and compliance issues you face when you open a home care business that you might not have to worry about in other industries.
You’ll need to complete the home care license application in your state, and all the accompanying paperwork.
You’ll need to incorporate your business, get a tax ID, and also get an NPI number.
You’ll need to contact your State Department of Health for a full rundown of what you’ll need to do.
For most home health businesses, their primary revenue source comes from Medicare/Medicaid. You’ll need your Medicare and Medicaid certifications, as such.
You will have to do a three-day Medicare survey for your Medicare accreditation.
Finally, in the early days of starting a home health business, you’ll have to start making staffing decisions. The people who are going into each client’s home are the representatives of your brand and business, and finding quality people may be the biggest challenge you face in operating this type of business.
If you aren’t a medical professional, you’ll have to hire a clinical supervisor who may be a physician or a registered nurse, depending on where you live. You may also need a certified administrator.
Of course, these are just the foundational things to consider with a home health business, as you get started.
