Mr Sir

Industry growth opportunities:

1. The aging of the population contributes to the growth of home health care industry

The aging population in the US is expected to further expand in the coming years. According to US Census Bureau, the number of elderly is expected to climb to 71.5 million or 20% of the total population by the year 2030. Due to the increasing life expectancy of Americans, the number of people aged 85 years and older is also expected to increase from 4.3 million to 9.6 million by the year 2030. The increase in life expectancy could increase the demand for home health care services

2. Federal funding for Medicare and Medicaid in home health care industry

The main source of industry revenue comes from government reimbursement programs such as Medicare and Medicaid. Patient Protection and Affordable Care Act, was amended by the Health Care and Education Reconciliation Act provided some benefits to home care. Increased federal and state funding of Medicare and Medicaid stimulates demand for healthcare services.

3. New technologies increase the range of services that can be provided in the home

4. A shift in patient preferences toward home care services

More and more people prefer home care over institutional care, because they save cost

Porter’s five forces in home health care industry

Intensity of rivalry:

The home health care industry is highly competitive in the United States. There are a significant number of internal home care companies including Apria Healthcare Group, Lincare Holdings Inc., Gentiva Health Services Inc. and other companies. The aggressively compete with each other based on the availability of personnel, the quality, expertise, and value of the services. This industry is also facing external competition from hospitals, skilled nursing facilities and hospices.

Barriers to entry

The threat of new entrants in home health care industry is high, in other words, the barrier of entry is low. This industry is highly...