Home Care Agency Business Interest

November 27, 2024

by a searcher from Clarkson University - School of Business in Philadelphia, PA, USA

Hey Everyone,

I am a self funded searcher working on a few thesis. Looking for an asset light service business and I came across the home care agency model. I have fund quite a few deals in the space and I am wondering if anyone in here is who knows this business that wants to talk shop and give an overview of what all goes into that business, things to consider, etc?
I'm assuming its an insurance heavy business.
I'm assuming its not the easiest to find workers.
But don't want to make too many assumptions so looking to talk to anyone willing.
Thanks!

Reply by a searcher
from University of British Columbia in Calgary, AB, Canada

Hi Troy - I'm happy to chat more in-depth redacted but overall we are currently 'luke-warm' on the home care agency space. Our main reasoning is: (1) usually has heavy medicare/medicaid exposure, (2) high levels of employee churn, so you are constantly hiring, (3) low differentiation and switching costs and (4) there is a lot of ongoing litigation in the space. That being said, if you can find an agency that overcomes these barriers and a some sort of 'secret sauce', then the overall it is a verily lucrative industry.

Reply by a searcher
from New York University in Orlando, FL, USA

It's a great industry but as others have mentioned be careful of the payor mix (private, Medicare, Medicaid, long-term care) and yes labor is not easy but it depends on the market. Some franchise territories have excellent demographics for clients (meaning high net worth / disposable income to spend on care) but those same areas may have tight labor due to high cost of living.

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