A Rising Demand for Medicare Programs
By 2030, the entire baby-boom generation will have reached the age of eligibility for Medicare, hence the rapid acceleration in enrollment from 62 million (in 2020) to 78 million.
This increased enrollment will also trigger an increase in Medicare expenditures, particularly with home health covering a significant chunk of the allocated funds. At present, Medicare remains the nation’s largest single purchaser of health care. Of the $3.2 trillion spent on personal health care in 2019, Medicare accounted for 23% — or $743 billion — of that total.
The Medicare Trustees and the Congressional Budget Office both project that spending for Medicare between 2019 and 2029 will grow at an average annual rate of 6.8%. By 2022, Medicare spending will reach $1 trillion under both sets of projections.
While a perpetual increase in Medicare enrollment is on the horizon, the number of home health agencies in the U.S. continues to decline as well.
In 2016, there were 12,342 home health agencies operating, but this number went down to only 11,456 in 2020. This number has been declining since 2013 at an average rate of -1.7% annually.
In parallel with the decreasing number of home health agencies, there is an alarming shortage of healthcare workers. This is evident in the declining ratio of workers per Medicare beneficiary from 4.6 to 2.9 in 2020. With staffing cited as today’s top operational challenge according to a recent survey, home health providers are among the Medicare organizations that have struggled the most with workforce availability.
Opportunities for Growth
Despite the challenges, home health has become a more profitable industry in recent years, with the home health industry moving out of the exclusive post-acute care space. This means there is more room for growth.
From a business standpoint, fewer players would mean a larger market share for current players. To occupy a significant percentage of the market, applying new efficiencies and innovations could be key. This space for growth holds promising possibilities for progress that home health business owners should be prepared to seize in the coming years.
Is Your Agency Ready for Growth?
Investments in home health are predicted to reach new heights in 2021. It is proving to be a prudent industry in the next decades, resulting in a lot of business opportunities just waiting to be grabbed.
While this is true, achieving success is not as easy as 1-2-3, considering the current crisis in nursing and direct care workers. Efficiency, which means being able to accomplish more with fewer resources or manpower, will tip the scales.
Explore ways to boost your clinician retention and maximize your in-house team for patient care by relieving them of some administrative tasks. Invest in tech-based solutions to streamline your processes and outsource key administrative functions that still require clinical knowledge. Allot personnel specifically dedicated to optimizing reimbursements through accurate coding and OASIS documentation, so that your field clinicians can focus on the bedside work.
Many home health businesses are now embracing the idea of utilizing third-party solutions, such as outsourcing, to support them for forward-thinking success by covering other key functions. This way, agencies can regain focus on sustainable business growth and fully utilize their in-house clinical teams to elevate patient care.