How to Open a Home Care Business

Do you find yourself driven by both entrepreneurial and humanitarian interests? Is it important to you to build a business you can be proud of, knowing you are making a positive difference in people’s lives?
If so, you might be an ideal candidate to start a home health care business. Home health care is one the largest growing industries in the world. In the US alone, home health care is an $84 billion industry with no signs of slowing down, marking this era as the best time for getting started in this expansive field.

What Is Home Health Care?
There are two basic types of home health care – non-medical, and skilled.

•Non-medical home health care involves assisting a patient with daily living activities. Most commonly these services are restricted to housecleaning, meal preparation, transportation, and other tasks for people who wish to remain in their homes.

•Skilled home health care involves nursing or therapeutic services provided in the patient’s own home which would ordinarily be given in a hospital or clinic.

This article is intended as a step-by-step guide for individuals considering starting a skilled home health care business. Specialized home health care usually involves skilled nursing or nursing aids, social work, and therapeutic interventions such as occupations, physical, or speech therapy.

The State Of The Home Health Care Industry
The most recent statistics published by the U.S. Bureau of Labor Statistics state that the demand for home health care workers is projected to increase to approximates 13 million by the year 2020, a 70 percent increases since 2010.
The combination of an aging population, a growing acceptance among physicians of the practice of home health care, and the desire to find more cost-effective ways of providing health care have caused the industry to remain strong.

Because of the entrepreneurial opportunities, these circumstances have presented, more people are looking into the home health care industry than ever before. And while there is plenty of room for everyone to profit from these growing trends, competition is out there. A well thought out and implemented a business plan can help new business in the industry to be successful.

North America has seen the most growth in the home health industry, due to a sophisticated healthcare infrastructure and more resources committed to research and development. The trend toward home health care is just as strong across the northern border. The Canadian Nurses Association (CNA) predicts that two-thirds of nurses in Canada will be working in the community by 2020, compared to 30 percent in 2006.

Things to Consider Before Starting a Home Health Care Business
Carol Byrne is the National Sales Director for 21st Century Health Care Consultants, http://www.1staccreditation.com/a consulting firm which serves home health care agencies throughout the United States.

Byme believes there is a specific personality type which is best suited to this type of work.“This industry draws people who are driven by compassion and desire to care for their fellow man. It’s a great industry, and there is money to be made, but you need that drive to help people. If you don’t have that compassion, this is not the business for you,” she says.

There are challenges when you open a home care agency. If you as the business owner will also be one of the service providers, you should consider things like the amount of travel involved to service your clients and the fact that you will be working alone the majority of the time.

Another consideration is that there have been significant technological advances not just in the world, but also in the home healthcare industry. Equipment that was once only in use in a hospital or clinic is now available for in-home use. A large part of your job will be to manage this equipment and to say apprised of the latest technology available in the field. If this is not your area of expertise, you will need to hire a top-notch employee who is knowledgeable in this area.

If you’ve studied the industry at length, analyzed the market opportunity, considered the unique challenges, and are excited to move forward, the following steps can help you navigate this often tricky process.

If you have weighed your options carefully and are serious about starting a home health care business, the following steps can help you to get started:

Step 1: Formulate A Business Plan
Home health care is unique in many ways, but the one thing it has in common with every other new business venture is that a lack of adequate planning and forecasting is a sure way to undercut its potential success. You’ll want to make sure you carefully plan out every detail of the logistics in getting the business off the ground and past the troublesome first couple of years.

Byme stresses the importance of business savvy in achieving long-term success. “It’s important to have clinical knowledge, but it’s just as important to have business sense because at the end of the day it’s still a business and it must be run like a business to be effective at generating a profit. It requires a balance of skills.”
If you’ve never written a business plan before, you can find out more about the process on the Small Business Administration Website or on BPlans/

What to include in your business plan
Regardless of the format you choose, there are some things you’ll need to keep in mind. Providing top quality home health care requires sophisticated and expensive medical equipment. You’ll want to compile a detailed list of everything you need to hit the ground running including:

•Equipment and starting expenses
•Business development and marketing materials
•Rental expenses
•Office equipment
•Office supplies
Medical equipment
•Nursing supplies

Financing and cash flow
Once you have compiled a list of expenses you need a plan to raise the capital. The most traditional routes are bank loans, small business loans, or angel investors. There may be state-level grants geared toward emerging home health care business startups as well.

You should expect that when you open a home care agency, your business will operate at a loss for the first three to six months while your client base grows and you get on a regular billing cycle with Medicare and Medicaid, so a carefully thought out cash flow management plan is required to ensure you get through those first few months.

Market research and your competitive landscape
The greatest weapon you can have in your arsenal when it comes to building your business plan and raising capital is a strong market analysis that proves yours is a great local market for this type of business, and that you can serve a need currently unmet by competitors.

There is no question this is a growing industry on a national and global level; however, if your community is currently over-saturated with home health care businesses, you will have a hard time making it work.

Also, a strong competitive analysis will help direct you with marketing and recruitment strategies to identify where others have fallen short in their attempts to penetrate the market.

Step 2: State and Medicare/Medicaid Certification
In the United States, the first step in navigating the certification process involves completing your state’s home care license application and all of the required home care business license paperwork.

This includes incorporating your business and obtaining a Tax ID and a National Provider Identification NumberThe home care license and operation requirements and standards will vary from state to state. The best way to make sure you have your bases covered is by contacting your State Department of Health for assistance.

Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) will cover a patient’s eligible home health services such as skilled nursing care, physical therapy, speech-language pathology services, occupational services, and others.
Unless you have an unorthodox business model, Medicare and Medicaid will be your primary source of revenue. It is critically important that your business obtains all the proper Medicare and Medicaid certifications.

To complete the process of Medicare accreditation, you must complete a three-day Medicare survey which is an audit of your business’s operations and patient clinical records. Carol Byrne cautions prospective business owners about the length of this part of the journey can take. “In the United States, it can take a year or longer to open a fully licensed and certified business. It can be a long path,” she says.
In order to be eligible for Medicare coverage for home care services, the patient must meet the following criteria:

•They must be under the care of a physician and receive the treatments as part of a treatment plan prescribed and reviewed by the physician
•The physician must certify that the patient requires at least one of the following services:

•Continued Occupational Therapy
•Speech-Language Therapy
•Physical Therapy
•Intermittent Skilled Nursing Care (more than drawing blood)
•The home care business responsible for their care must be Medicare-certified
•The physician must determine that the patient is “homebound.”
•The patient may not require more than part-time or intermittent nursing care

Some states will require a new home health care business owner to complete a state jurisprudence exam before granting a license to operate, so be sure to do additional research for your own state.

Step 3: Staffing and Management Structure
Unlike most other businesses where your employees sell or facilitate your product, with a home health care business, your staff is your product. The best way to retain clients and get referrals for others is to build your reputation of providing top-quality professional medical services in a personable manner. This means finding the absolute best of the best to work for your company and serve as the face of the company at the front line level.

“The most challenging part of this business is staffing,” says Carol Byrne. “Finding the right people is critical because ultimately the person who walks into the home is your representative and they are the face of your business. Finding good staff is by far the greatest challenge a home care business will face.”

What kind of staff will you need?
If you are not a physician or medical professional yourself, your first hire will be a qualified clinical supervisor. It is a requirement of Medicare (and most states) that a physician or a registered nurse with more than one year of experience be in place as a clinical supervisor. Most states also require a certified administrator be in place, although this position can be doubled by the clinical supervisor if that person is certified for both roles.

When it comes to the frontline service providers, there are two routes you can explore. One is to hire an in-house staff, and the other option is to contract the work out through other agencies. Sometimes, this can be a combination of both, depending on your cash flow.

Step 4: Developing Your Marketing Strategy
Your last step is to find clients, which will require a robust marketing campaign for your new business. Here are a few marketing strategies to implement.

•Set up a website: Your client base may not be as internet-savvy as most; however, their family and loved ones will likely use the internet as the first place to find a qualified business.
•Reach out and network: Contact local physicians, senior centers, long-term care facilities, hospital discharge social workers, and rehab outpatient centers to reach prospective clients.
•Join local business groups or organizations: Groups like your Chamber of Commerce or The National Association for Home Care & Hospice (NAHC) offer opportunities for agencies to reach home health care decision makers.
•Attend as many trade shows and events as possible: Events like these give you an opportunity to meet with physicians, nurses, social workers, vendors of home health supplies, and the owners of related businesses who may have their own network of people in need of your services.

For more information on how to start a home health care business, you can contact 21st Century Health Care Consultants who will carefully walk you through each of the above steps and provide you with superior support to help you reach your business goals.