Part 1 - Home healthcare is attracting the attention of entrepreneurs looking for a growth industry and insurance agents looking for a new market niche. This critical segment of the healthcare industry, however, presents a dangerous minefield for the uninitiated. This article is part of a two-part series on home healthcare – this article discusses, the challenges facing those already in the industry or those interested in starting a home health care business. Part 2 will address the huge challenges facing insurance agents who already serve or want to serve this market.
The home healthcare industry – specifically businesses that serve patients who live at home but who require some level of assistance, is expanding at an annual growth rate of 5%. That’s not just the fastest growing segment in healthcare, it’s the fastest growing of all industries according to the U.S. Bureau of Labor Statistics. The industry is also projected to create over 750,000 new jobs by 2024.
With such robust growth, many home healthcare firms, especially start-ups, find it difficult to find enough qualified applicants to handle the work requests. Attracting quality employees is especially difficult given the difficulties of home healthcare work. Payment is unpredictable through Medicare and Medicaid and many caregivers are aging themselves (seniors helping seniors). The physical demands placed on caregivers is also a deterrent, including sometimes hazardous working environments, long hours and high drive times to patient locations.
When firms don’t have enough staff to meet demand, they face the increased risk of lapses in quality of care, lost business, staff burnout and patient dissatisfaction. Additionally, caregivers may be called upon to perform duties for which they have not received adequate training. As a consequence, firms may be tempted to take hiring shortcuts. This is a flawed strategy to say the least.
From an insurance standpoint, those firms that resort to shortcuts in hiring and/or maintain inadequate operational standards face higher and higher workers’ compensation insurance premiums – and that’s assuming they can obtain insurance at all in the standard market. It may seem obvious but one of the most important partners in building and maintaining a successful home healthcare firm is an insurance agent or broker who specializes in the industry. These specialists have the experience and resources to assist in identifying and mitigating the risks faced by all firms in this healthcare segment.
The picture I am painting need not be that bleak. The home health care industry fills a critical need in our society and the work can be both profitable and unbelievably rewarding. Demand for these services will continue to rise for many years but the home healthcare industry is not for the faint of heart or those looking for a quick buck. Home health services require dedication, a deep understanding of the industry, meticulous planning and substantial financial resources to achieve success.
*Patriot Underwriters, Inc. conducts insurance business in all its licensed states as PUI INSURANCE AGENCY