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The U.S. home healthcare services market size was USD 85.10 billion in 2020. The impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative demand shock across the United States amid the pandemic. Based on our analysis, the market for U.S. home healthcare witnessed a decline of -4.1% in 2020. The market is expected to grow from USD 90.12 billion in 2021 to USD 146.61 billion in 2028, growing at a CAGR of 7.2% during the 2021-2028 period.
Home health care is a varied range of medical services provided at home for an injury or illness. These services are usually more convenient, less expensive, and just as effective as hospital-based services or skilled nursing facilities. The rapidly growing number of people more than 65 years of age are prone to chronic illnesses such as diabetes, cardiac ailments, mental disease, incontinence, etc. Therefore, patients are demanding affordable and accessible healthcare facilities. Hence, the factor mentioned above is one of the primary reasons supporting the growth of the market.
Decline in Number of Elective Surgeries across the U.S. to Hamper Home Healthcare Services Industry
The outbreak of the COVID-19 pandemic has resulted in postponed elective surgeries across the U.S., which is one of the major factors responsible for the sudden drop in the market.
The impact of the decline or delay in elective procedures is significant as these procedures mostly require home care services post discharge. Several major companies are relying on such procedures for revenue generation.
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Incorporation of Telehealth Services to Boost Home Healthcare Service Demand
The implementation of telecommunication in the home health industry offers lucrative growth opportunities for the industry to flourish. Moreover, with the world stuck amid a pandemic, health systems are focusing on the implementation of telehealth to shift the balance of care out of the hospital or clinic and into the home. That strategy is shining a spotlight on this industry, which has faced a shortage of providers and a growing surplus of patients. Hence, such technological advancements in this market will strongly stimulate market expansion.
Growing Rate of Aging Population with Chronic Diseases to Propel Market Growth
People above the age of 65 years are more prone to chronic conditions such as diabetes, dementia, cardiac disorders, etc. Therefore these conditions require continuous monitoring. For instance, as per the Centers for Disease Control and Prevention (CDC), approximately 85 percent of older adults have at least one chronic health condition, and 60 percent have at least two chronic conditions. Hence, the increasing rate of geriatric population across the U.S. with chronic ailments boosts demand for home health services for the long term during the forecast period.
Adoption of Home Healthcare Services leads to Lead to Reduced Healthcare Expenditure
The increasing healthcare expenditure in the U.S. is another significant factor boosting the adoption of home healthcare during the forecast period. This is since these healthcare services are comparatively less expensive than in-patient services. For instance, as per the Centers for Medicare & Medicaid Services, the national health expenditure grew by 4.6% to USD 3.8 trillion in 2019, or USD 11,582.0 per person, and accounted for 17.7% of gross domestic product (GDP). Moreover, hospital expenditures grew 6.2% to USD 1,192.0 billion in 2019, faster than the 4.2% growth in 2018. The cost of treating the disease at home is less than institutional care due to the exclusion of additional hospital costs and other charges.
Furthermore, the growing demand for respiratory therapy services and infusion therapy services at home will further boost market demand. The increasing utilization of home health services can offer a substantial amount of overall treatment cost reduction. This is anticipated to result in the U.S. home healthcare services market growth during the forecast period.
Vulnerability To Fraud, Waste, And Abuse Might Restrict Market Expansion
Home healthcare services have long been vulnerable to waste, fraud, and abuse. In 2015, around 11,000 home healthcare agencies with USD 18.4 billion in their services were reimbursed by Medicare. The CMS has assessed that USD 10 bn of the USD 18.4 bn payment, were fraudulent or improper. The exposure to fraud about home healthcare is very high, which might act as a growth hindering factor in the growth of the market.
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Nursing Care Segment to Dominate the U.S. Home Healthcare Services Business
Based on the type, this market is categorized into physician care, nursing care, physical occupational & speech therapy, medical social services, and others. The physician care segment is anticipated to witness a significant growth rate owing to increasing demand for physician-based services across the U.S.
The nursing care segment is poised to hold a significant market share during the forecast period. The dominance of the segment is attributable to the increasing demand for skilled nursing care at home. This is because people above the age of 65 mostly require such a type of healthcare services, including nursing care. The increasing rate of geriatric population across the U.S. has surged the demand for skilled nursing at home, thereby augmenting segmental growth.
The physical, occupational & speech therapy segment is poised to witness a significant CAGR during the forecast period. The high growth of the segment is attributable to enhanced access to such therapies at home. For instance, in June 2019, the Medicare Home Health Flexibility Act was introduced. This act allowed occupational therapists to register home health therapy cases under Medicare. Redundant barriers to home healthcare therapy services increase costs and leave seniors at risk. This act/bill was initiated to prevent delays with a no-cost and straightforward solution that allows occupational therapists to conduct therapy at home. Such initiatives will strongly support the physical, occupational & speech therapy segment’s growth in the U.S. home healthcare services industry.
Increasing Spending from the Government to Boost Demand for Public Health Insurance Payor Segment’s Growth
On the basis of the payor, the market is classified as public health insurance and private health insurance/out of pocket.
The public health insurance segment accounted for the maximum portion of the market share in 2020. High growth is attributable to the increasing government spending on home health care in the U.S. For instance, according to the Kaiser Family Foundation, most European developed countries spend between 1% and 5% of their health care budget on these type of healthcare services. While in the U.S., home healthcare accounts for 3% of the total health care expenditures.
The private health insurance/out-of-pocket segment is poised to witness a lucrative growth rate during the forecast period. This is owing to the increasing treatment cost of chronic diseases across the U.S. The rising prevalence of chronic ailments such as cancer requiring post-hospital home health treatment services has surged pocket expenditure across the U.S. For instance, the Agency for Healthcare Research and Quality in 2018 reported that cancer patients in the U.S. paid USD 5.6 billion for cancer treatment. Furthermore, the private insurance Payors held 49% of the total cancer treatment cost in the U.S., including hospital and post-discharge treatment services.
The U.S. market stood at USD 85.10 billion in 2020. The increasing initiatives by the government for better home healthcare services across the U.S. is one of the major factors driving the market growth. The government is focusing on solidifying the infrastructure for home care services. For instance, in April 2021, the U.S. government announced to spend USD 400 billion towards affordable home-based care for the aging population and people with disabilities. Such initiatives will strongly propel the market growth during the forecast period.
Strong Distribution Channels and Robust Portfolios to Augment Revenue Growth of Key Players
The U.S. home healthcare services market is highly fragmented, with some market players leading the market with minimal percent share. Companies such as Kindred Healthcare held LHC Group, Amedisys Inc., and Encompass Home Health & Hospice accounted for the highest market share in 2020. LHC Group Inc. is one of the leading players in the market owing to the fact that the company is focused on an increasing number of partnerships with the U.S.-based healthcare network for post-acute services.
An Infographic Representation of U.S. Home Healthcare Services Market
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The U.S. home healthcare services market research report provides a detailed analysis of the market. It focuses on key aspects such as industry trends, leading companies, market dynamics, service type, and Payor groups. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
Type and Payor
Fortune Business Insights says that the market stood at USD 85.10 billion in 2020 and is projected to reach USD 146.61 billion by 2028.
In 2020, the market stood at USD 85.10 billion.
The market will exhibit steady growth at a CAGR of 7.2% during the forecast period (2021-2028).
By type, the nursing care segment will lead the market.
The growing geriatric population with chronic ailment will boost the demand for home healthcare services across the U.S.
Kindred Healthcare and LHC Group are the top players in the market.
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