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U.S. Home Healthcare Services Market Size, Share & COVID-19 Impact Analysis, By Type (Physician Care, Nursing Care, Physical, Occupational & Speech Therapy, Medical Social Services, and Others), By Payor (Public Health Insurance and Private Health Insurance/Out of Pocket), and Forecast, 2022-2029

Region : USA | Format: PDF | Report ID: FBI105568

 

KEY MARKET INSIGHTS

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The U.S. home healthcare services market size was valued at USD 88.50 billion in 2021. The market is projected to grow from USD 94.17 billion in 2022 to USD 153.19 billion by 2029, exhibiting a CAGR of 7.2% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with home healthcare services experiencing lower-than-anticipated demand across the U.S. compared to pre-pandemic levels. Based on our analysis, the market exhibited a decline -4.1% in 2020 as compared to 2019.


Home healthcare offers 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 or skilled nursing facilities. The geriatric population in the U.S. is large and growing significantly.



  • For instance, according to America’s Health Rankings 2021 Senior report, more than 54 million people aged 65 years and above in the U.S., accounting for 16.5% of the total nation’s population. The number is projected to rise to 85.7 million by 2050 accounting for approximately 20% of the U.S. population.


With the increasing geriatric population, age-related disorders, such as osteoarthritis, diabetes, and dementia, is also rising. Additionally, the rising incidence of chronic conditions, such as cardiac disorders, stroke, and cancer, is presenting a large patient pool requiring these services.



  • For instance, according to the American Psychological Association (APA), chronic conditions such as heart disease, cancer, stroke, and diabetes cause almost two-thirds of all deaths each year in the U.S. among individuals 65 years and above.


Along with these, the preference for these services in the patient population coupled with robust efforts of the key players to introduce portable devices with advanced technologies suitable for home-health settings is anticipated to increase the adoption of services in the U.S.


COVID-19 IMPACT


Significant Decline in the Number of Elective Surgeries and Patient Discharges across the U.S. amid the COVID-19 Pandemic


The outbreak of the COVID-19 pandemic had a negative impact on the U.S. home healthcare services market growth due to the decreased demand for these services due to the fear of contracting COVID-19 infection among patients with chronic conditions. Additionally, decreased visits of the professionals for the services due to prioritization of medical services to the COVID-19 patients was a major factor that decreased the revenue of the home healthcare agencies. Several key players, such as Amedisys, and Encompass Health Corporation, witnessed a significant decline in the revenue from their home healthcare segment.



  • For instance, as reported in the 2020 annual report of Encompass Health Corporation, the home healthcare segment of the company witnessed a decline of 4.4% from 2019 to 2020. The decline is majorly attributable to the negative impact of COVID-19.


Additionally, the decline or delay in elective procedures is another significant factor that impacted the market growth as these procedures mostly require home care services post-discharge.



  • For instance, according to a 2021 article published by Stanford Medicine, the hospitals minimized, postponed, or canceled elective surgeries due to which the surgical procedures decreased by 48% during the initial weeks of the pandemic in March 2020 as compared to the same period in 2019.

  • Similarly, according to a 2021 study article published by the U.S. Census Bureau, there was a decline of 15.9% in the number of hospital discharges in the first quarter of 2020 from 9.5 million to 8.0 million in the second quarter of 2020.


However, the number of elective surgeries and hospital discharges started increasing during 2021, owing to the pandemic normalcy, which led to the increase in the demand for home healthcare services. Key players in the market also experienced a gradual increase in revenue in 2021 from their segment.



  • For instance, the segment of Encompass Health Corporation in 2021 witnessed a growth of 2.2% in revenue as compared to that in 2020.


LATEST TRENDS


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Incorporation of Telehealth Services to Boost the Demand for these Services


The implementation of telecommunication in the home healthcare industry offers lucrative growth opportunities for the industry to flourish. Moreover, with the world stuck amid the pandemic, health systems focus on implementing telehealth to shift the balance of care out of the hospital or clinic and into the home. The strategy shines a spotlight on this industry, which has faced a shortage of providers and a growing surplus of patients. Hence, such technological advancements in the services market will strongly stimulate market expansion.  



  • For instance, in June 2021, Swift Medical partnered with Homecare Homebase software to offer a comprehensive solution that provides high-quality, cost-effective care. This partnership makes Swift Medical the preferred wound care technology partner.


DRIVING FACTORS


Growing Rate of Aging Population with Chronic Diseases to Propel Market Growth


People above 65 years are more prone to chronic conditions such as diabetes, dementia, cardiac disorders, etc. With the rising geriatric population in the U.S., the requirement for continuous monitoring of health conditions is also increasing.



  • For instance, according to a 2021 article published by Reuters, the population in the U.S. aged 65 years or above accounted for 16.5%, which is projected to rise to 74 million by 2030. 


The significant rise of chronic disorders in the geriatric population, increasing the need for daily assistance at home and continuous monitoring, is expected to increase the country's demand for home healthcare services.



  • For instance, according to a 2021 article published by the National Council of Aging, approximately 80% of the adults aging 65 years or more have at least one chronic condition, while 68% have two or more.


The increasing elderly population and rising prevalence of chronic conditions are expected to boost the demand and adoption of these services for the long term in the U.S. during the forecast period.


Adoption of Services in Homecare Settings is Leading to Reduced Healthcare Expenditure


The increasing healthcare expenditure in the U.S. is another key factor driving the adoption of services for homecare settings during the forecast period. This is attributed to the fact that these services are comparatively less expensive than in-patient services.



  • For instance, according to a 2021 article published by the American Journal of Managed Care (AJMC), there was a 19% cost reduction in-home healthcare management in a recent randomized trial evaluating patients treated in a hospital setting and patients treated in a hospital-at-home setting.


Furthermore, the growing demand for respiratory therapy services and infusion therapy services at home will boost the market demand. The increasing utilization of home health services can offer a substantial reduction in the amount of overall treatment cost. The above-mentioned factors are anticipated to grow the market during the forecast period.


RESTRAINING FACTORS


Vulnerability to Fraud, Waste, And Abuse Might Restrict Market Expansion


Home healthcare services have long been vulnerable to waste, fraud, and abuse. For instance, according to a 2021 article published by Home Health Care News, as per Centers for Medicare and Medicaid Services (CMS), the home health improper payments estimate increased to 10.2% in 2021 from 9.3% in 2020, which amounted to approximately USD 1.84 billion in 2021.


The nature of fraud varies, but most fraud involves home health agencies billing for services that are not medically necessary or billing for services that are not provided. The exposure to fraud to these settings is very high, which might act as a growth hindering factor in the market's growth.


SEGMENTATION


By Type Analysis


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Nursing Care Segment to Dominate the Market Owing to Rising Demand for these Services


Based on type, the U.S. home healthcare services market is categorized into physician care, nursing care, physical, occupational & speech therapy, medical social services, and others. 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 attributed to the fact that people above 65 mostly require these 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 segment's high growth 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 these services increase healthcare 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.  


By Payor Analysis


Increasing Spending from the Government to Boost Demand for Public Health Insurance Payor Segment’s Growth


On the basis of payor, the market is classified into 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 2021. High growth is attributable to the increasing government spending on homecare services in the U.S. For instance, according to the Kaiser Family Foundation, most European countries spend between 1% and 5% of their healthcare budget on these services. While in the U.S., home healthcare accounts for 3% of the total healthcare expenditures.   


The private health insurance/out of pocket segment is poised to witness a lucrative growth rate during the forecast period. This is due 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, according to a 2021 article published by the American Society of Hematology, the monthly average cost of cancer treatment per patient was USD 11,755 in the U.S. The treatment costs in European countries like Germany (USD 8,300) and Switzerland (USD 6,950) and Asia Pacific countries were significantly lesser than that in the U.S.

  • Similarly, according to a 2020 report published by the American Cancer Society on the costs of cancer, the amount spent in the U.S. on cancer-related healthcare in 2015 was approximately USD 183 billion, which is projected to rise by 34.0% to USD 246 billion by 2030.      


KEY INDUSTRY PLAYERS


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 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 2021. LHC Group Inc. is one of the leading players in the market since the company is focused on an increasing number of partnerships with the U.S.-based healthcare network for post-acute services. For instance, in March 2022, Archbold Medical Center and LHC Group entered into a definitive agreement to form a joint venture to enhance home health services in the country and expand its service to five additional states.


LIST OF KEY COMAPNIES PROFILED:



KEY INDUSTRY DEVELOPMENTS:



  • June 2021 Amedisys announced the acquisition of Contessa Health, a hospital-at-home and skilled nursing facility leader, intending to expand its capabilities in-home healthcare services with the addition of a higher-acuity hospital at home and skilled nursing facility services at home advanced analytics platform and network management.

  • December 2021 Aveanna Healthcare, LLC acquired Comfort Care, a leading adult home health and hospice company, to expand its footprint in the country with the addition of operations in Tennessee and Alabama.


REPORT COVERAGE


An Infographic Representation of U.S. Home Healthcare Services Market

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The market report on the United States home healthcare services 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 in recent years.


Report Scope & Segmentation














































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Estimated Year



2022



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD billion)



Segmentation



By Type and Payor



By Type




  • Physician Care

  • Nursing Care

  • Physical, Occupational & Speech Therapy

  • Medical Social Services

  • Others



By Payor




  • Public Health Insurance

  • Private Health Insurance/Out of Pocket



Frequently Asked Questions

Fortune Business Insights says that the market stood at USD 88.50 billion in 2021 and is projected to reach USD 153.19 billion by 2029.

In 2021, the market stood at USD 88.50 billion.

The market will exhibit steady growth at a CAGR of 7.2% during the forecast period (2022-2029).

By type, the nursing care segment is leading the market.

The growing geriatric population with chronic ailments will surge 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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