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, 2023-2030

The U.S. home healthcare services market size was valued at USD 90.47 billion in 2022. The market is projected to grow from USD 96.08 billion in 2023 to USD 156.28 billion by 2030, exhibiting a CAGR of 7.2% during the forecast period.

Home healthcare encompasses diverse medical services delivered in the comfort of one's residence to address injuries or illnesses. These services typically offer greater convenience, affordability, and similar effectiveness to hospital or skilled nursing facility care. The geriatric population in the U.S. is large and growing significantly.

• For instance, according to the World Bank Group 2022 data, an estimated 17% of the total population was aged 65 years and above in the U.S. These services are beneficial for older people as they provide security and comfort by ensuring that old patients receive proper treatment by living close to their family members.

With the increasing geriatric population, the prevalence of age-related disorders, such as osteoarthritis, diabetes, and dementia, is also rising. The increasing incidence of chronic conditions, such as cardiac disorders, stroke, and cancer, creates 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 aged 65 years and above.

Along with these factors, the shifting preference for these services among the patient population contributes to the market's growth. Furthermore, robust efforts of the key players to introduce portable devices with advanced technologies suitable for home-health settings are anticipated to increase the adoption of these services in the U.S. The impact of the COVID-19 pandemic on the market was negative in 2020, owing to a decline in elective surgeries. However, the market witnessed high growth in 2021 due to increasing number of elective surgeries and hospital discharges. Furthermore, in 2022, the market experienced slow growth due to changes in reimbursement policies and is expected to grow significantly during the forecast period of 2023-2030 due to the launch of various home healthcare services and the integration and implementation of telehealth technology.

COVID-19 IMPACT

Significant Decline in Elective Surgeries and Patient Discharges across U.S. Amid COVID-19 Slowed Market Growth

The COVID-19 pandemic had a negative impact on the U.S. home healthcare services market growth as the demand for these services decreased due to patients’ apprehension about acquiring the COVID-19 infection. Furthermore, the reduced frequency of visits by professionals specializing in these services, as medical resources were redirected toward COVID-19-positive patients, emerged as a significant factor contributing to the decline in revenue margins for home healthcare service providers. Several key players, such as Amedisys and Encompass Health Corporation, witnessed a significant decline in 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 was majorly attributed to the negative impact of the COVID-19 outbreak.

Moreover, the decline or postponement of elective procedures represented another notable factor that impacted the market's growth, given that these procedures often entail a need for post-discharge home care services.

• 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 compared to the same period in 2019.

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

• For instance, according to the annual report published by the home health segment of the LHC group in 2021, the segment witnessed growth of 6% in revenue as compared to that in 2020.

LATEST TRENDS

Incorporation of Telehealth Services to Boost Demand for Home Healthcare Services

Telecommunication in the home healthcare industry offers lucrative growth opportunities for the market. Moreover, during the pandemic, health systems shifted their focus toward implementing telehealth to transfer the balance of care from hospitals or clinics to homes. The strategy highlighted this market, which has faced a severe shortage of service providers and a growing pool of patients. Hence, such advancements in services will strongly stimulate market expansion.

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

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DRIVING FACTORS

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

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

• For instance, according to the 2023 Senior Report published by the United Health Foundation, approximately 16.8% of the U.S. population, or USD 55.8 million Americans, were aged 65 years old and above. The report also mentions that the elderly population is anticipated to increase in the forthcoming years.

The rise of various chronic diseases among the geriatric population is increasing the need for daily assistance and continuous monitoring. Home healthcare exhibits various advantages for older adults over hospitals and nursing facilities, such as quality treatment at home, low cost, reduced risk of infections, and others. Thus, all factors will increase demand for home healthcare services.

• For instance, according to a 2021 article by the National Council of Aging, approximately 80% of adults aged 65 years or older 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 in the long term in the U.S. during the forecast period.

Adoption of Healthcare Services in Home Settings Will Reduce Healthcare Expenditure

The increasing healthcare expenditure in the U.S. is another key factor driving the adoption of healthcare services in home 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 that evaluated patients being treated in a hospital setting and patients treated in a hospital-at-home setting.

Furthermore, the growing patient preference for respiratory therapy services and infusion therapy services at home will boost the market growth. The increasing utilization of home healthcare services can substantially reduce the overall treatment cost. The abovementioned factors are anticipated to augment the market progress 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 the Centers for Medicare and Medicaid Services (CMS), the estimate of improper payments for home healthcare increased to 10.2% in 2021 from 9.3% in 2020, which amounted to approximately USD 1.84 billion in 2021.

• Also, as per a press release published by the U.S. Department of Justice in February 2023, 23 Michigan residents were charged for their alleged involvement in two illegal schemes. These schemes aimed to defraud Medicare over USD 61.5 million by paying kickbacks and bribes and billing Medicare for unnecessary home health services that were never provided.

The nature of fraud varies, although most frauds involve home health agencies billing for services that are not medically necessary or not provided. The exposure of these services to fraud is quite high, which might act as a growth hindering factor for the market.

SEGMENTATION

By Type Analysis

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

Based on type, the 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 U.S. home healthcare services market share during the forecast period. The segment's dominance is attributed to the increasing demand for skilled nursing care at home. This is due to the fact that people aged above 65 years mostly require these services, including nursing care. The increasing percentage of the geriatric population across the U.S. has surged the demand for skilled nursing at home, augmenting the segment’s growth.

Furthermore, the launch of new facilities and the introduction of a variety of home healthcare services by key players will also contribute to the market growth. For instance, in August 2022, Mount Sinai Health System and Contessa, an Amedisys company, extended their partnership by merging Mount Sinai South Nassau’s home health agency. The home health agency will be known as Mount Sinai at Home and offer home health services, including Skilled Nursing Facilities (SNF at home), palliative care, and others.

The physical, occupational & speech therapy segment is poised to witness a significant CAGR during the forecast period. The segment's high growth is attributed 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. market.

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By Payor Analysis

Increasing Spending from Government to Boost Demand for Public Health Insurance

Based on payor, the market is classified into public health insurance and private health insurance/out of pocket.

The public health insurance segment held the largest market share in 2022. The segment’s high growth is attributed to 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. Additionally, public insurance services are affordable compared to their private counterparts, increasing their preference among the population. This will help the segment grow steadily in the coming years.

• For instance, according to the 2022 data published by the U.S. Census Bureau, in 2021, approximately 91.7% of the U.S. population was covered under insurance, out of which 35.7% had public insurance. According to the data, the percentage of population covered under public insurance increased by 1.2% in 2021 compared to the previous year.

The private health insurance/out of pocket segment is poised to witness a lucrative growth rate during the forecast period. This is due to increasing treatment costs of chronic diseases in the U.S. The rising prevalence of chronic ailments, such as cancer, has increased the requirement for post-hospital home health treatment services, thereby surging out of pocket expenditure.

• 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, such as Germany (USD 8,300) and Switzerland (USD 6,950), and Asia Pacific countries were significantly lesser than those of the U.S.


• Similarly, according to a 2020 report published by the American Cancer Society on the costs of cancer, the amount spent on cancer-related healthcare by Americans in 2015 was approximately USD 183 billion. This amount is projected to rise by 34% 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. market is highly fragmented, with some players leading by capturing a sizable market share. CenterWell Home Health, Amedisys Inc., LHC Group, and Enhabit Home Health & Hospice accounted for the largest market share in 2022 in terms of revenue. LHC Group Inc. is one of the leading players in the market since the company is entering several partnerships with U.S.-based healthcare firms that offer post-acute services. For instance, in March 2022, Archbold Medical Center and LHC Group entered a definitive agreement to form a joint venture to enhance home health services in the country and expand their services to five additional states.

LIST OF KEY COMPANIES PROFILED:

• Amedisys (U.S.)


• LHC Group, Inc. (UNITEDHEALTH GROUP) (U.S.)


• Enhabit Home Health & Hospice (U.S.)


• Brookdale Senior Living Inc. (U.S.)


• Trinity Health (U.S.)


• CenterWell Home Health (Humana) (U.S.)


• AccentCare, Inc. (U.S.)


• BAYADA Home Health Care (U.S.)


• ELARA CARING (U.S.)


• Interim Healthcare Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023 – Amedisys entered a definitive merger agreement with Option Care Health, Inc., a U.S.-based provider of infusion services, to provide an independent platform for home and alternate site care.


• February 2023 – Optum Inc. acquired LHC Group for USD 5.40 billion. Through this acquisition, both companies aim to offer extensive care to meet the rising demand for home care among patients.


• December 2022 – Enhabit Home Health & Hospice acquired Southwest Florida Home Care, Inc.’s home health agency in Fort Myers, Florida. Through this acquisition, the company strengthened its footprint in Florida and expanded its services.


• June 2021 – Amedisys announced the acquisition of Contessa Health, a hospital-at-home and skilled nursing facility leader, to expand its capabilities in in-home healthcare services with the addition of a higher-acuity hospital 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 by adding operations in Tennessee and Alabama.

REPORT COVERAGE

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. Additionally, 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.

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