Home Care Franchise Industry Update 2013
Following is an excerpt from the just released FranchiseKnowHow report on the franchised home care sector for 2013:
Franchised home care continues to be one of the fastest growing components of the franchise industry. In last year’s report 17 companies had a total of 5,300 locations. This year the same 17 franchised home care companies accounted for over 6,000 locations, an increase of over 15%!
The continuing growth of the home care industry results from the increased aging of the U.S. population and the resultant demand for services. In addition, home care services properly administered are less costly compared to the cost at long term care facilities. The 2013 Private Duty Benchmarking Study published by Home Care Pulse reported that the number of private duty home care agencies has grown by at least 104% since 2007. There are an estimated 15,100-17,700 private duties agencies in the United States of which over 6,000 are franchised. On the date of this report there were over 60 home care franchise companies in the United States operating over 6,000 locations. Approximately 90% of franchises offer and provide companion and homemaker services only. The remaining franchises or 10% of the total provide skilled nursing services.
A home care franchise that provides unskilled home care services typically requires a lower investment and minimal equipment compared to other franchise concepts. Almost half of home care franchisors allow a home based operation. These factors coupled with a growing market and increased demand for services has continued to fuel the growth of home care franchises.
At the national level the implementation of The Affordable Care Act and certain issues related to the launch, including the operation of the website and individual health insurance policy cancellations, could postpone the full implementation of the ACA. The ACA contains regulations that when followed will increase the expenses of home care companies. It remains to be seen how this will play out.
The elimination of the minimum wage and overtime exemption for certain caregivers, which was included in the Fair Labor Standards Act since 1974 will take effect in 2015. Although some home care industry experts predict an increase in the cost of home care services it’s still too early to predict the full impact of this change. These subjects are covered in greater detail inside the report. Despite the emerging financial and regulatory changes, the size of the home care market, demand for home care services and the cost control benefits to private and public healthcare organizations and providers will continue to fuel the growth of the home care franchise industry.