Private Pay in Home Health - Convention 2013

Private Pay in Home Health Care - NAHC 2013

Private Pay in Home Health Care

How Medicare Certified Home Health Agencies

Can Succeed in Private Duty Home Care

? 2013 Leading Home Care

Two Main Reasons to be in the Private Duty Business

1. To create a new doorway for patients and families into your continuum of care.

2. To earn net income from operations to support your mission.

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Private Pay in Home Health Care - NAHC 2013

Private Pay in Home Health Study

CHHA All Respondents

Indicator

Median

Mean (Average)

Revenue

$2,292,018 $2,119,241

Cost of Care $1,244,698 $1,298,135

Gross Margin $993,572 $821,106

Marketing Exp. $17,163

$113,600

Recruiting

$14,400

$71,810

Office Wages $359,375 $499,660

Overhead

$168,673 $199,930

Alloc. & Profit $84,348

$143,073

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Private Pay in Home Health Care - NAHC 2013

CHHA Financial Benchmarks

Mean Revenue

$1,924,272

Cost of Care

$1,159,566

Gross Margin

$ 766,630

Recruiting Costs

$ 42.435

Marketing Costs

$ 61.284

Office Employee Costs $ 314,233

Operating Expenses $ 192,427

Corp. Alloc. & Profit $ 157,058

100% 60.26% 39.84% 2.2% 3.2% 16.33% 10% 8.11%

Independent & Franchise Benchmark Companies - 2008

Indicator Mean

Median % of Rev.

Revenue

$3,928,295 $1,466,732 100%

Cost of Care $2,356,977 $880,038 60%

Gross Margin $1,571,318 $586,692 40%

Marketing $137,490 $51,335

3.5%

Recruiting $58,924

$22,000

1.5%

Office Wages $471,395 $176,008 12%

Overhead $392,829 $146,673 10%

Owner Comp. $510,678

& Profit

$190,675

13%

Companies in business 3 years, and profitable in 2008

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Private Pay in Home Health Care - NAHC 2013

Analysis by Company Type

Page 28 Of 2010

Private Pay In

Home Health Study

The Big Difference

Employee Costs CHHA based PD ? 16% Independents ? 12% Net Profit & Corporate Allocation CHHA Based PD ? 8.11% Independents ? 13%

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Private Pay in Home Health Care - NAHC 2013

Payer Mix

Payer

Franchise

Private Pay 90.20%

MA Waiver 2.80%

VA

0.96%

Cat Fund 0.44%

Other Govt. 0.83%

LTC Ins. 5.29%

Other

0.71%

Independent

79.55% 7.20% 2.15% 0.15% 2.50% 4.55% 3.90%

CHHA

63.20% 9.93% 2.08% NA 9.54% 5.29% 9.87%

We learned about CHHA affiliated PDHC

Tend to be larger than independents or franchises

Tend to have lower revenue per client and lower revenue per caregiver

Tend to have lower private pay %, and higher MA Waiver & Other Govt. %

Tend to have higher overhead expenses Tend to have lower profits and growth

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