How to Plan a Home Health Agency Business

Home health businesses grow with demographic trends and target markets.

Home health businesses serve clients and patients in the community and perform a valuable service. An aging population means that health care providers and caregivers are needed in private homes. Many families need respite care provided by home health agencies. Families whose principals work outside the home hire home health workers to care for infirm, aged and terminally ill loved ones. Home care businesses can be growth businesses. Knowing how to plan to market, design and implement your home care business means the difference between success and failure.

Things You'll Need

• Computer
• Internet connection
• Market research
• Working capital

Instructions

1. 

   Home health businesses care for patients and families.

   Determine whether your home health business can become Medicare or Medicaid-certified, to enable clients to defray costs of services. Consult with your state's Quality Improvement Organization for more information. Out-of-pocket costs for private duty home health services range from $20 to $100 an hour or more. Consider whether your home health business will offer travel nurses, home health aids, companions, homemakers or other caregivers.

   --Evaluate the competitive marketplace. Learn what other businesses charge for their services, such as costs for clinical evaluation, 24-hour in-home care, or med-packing. Learn how many clients, employees and affiliations they have to generate business. Know how many required field employees the business needs to generate plan revenues. For example, if 30 home-health aids generate approximately $30,000 in weekly revenues, define employee costs. Allocate revenues to pay for resources, including office space, computer equipment, telephony systems and business supplies.

2. 

   Home health agencies allow patients to receive nursing care in their own homes.

   Determine the clients your business serves. Elderly patients and families need home services to groom, bathe, feed, and attend to general needs. In-home nursing care provided by registered nurses cost more than practical care delivered by home health aids or certified nurses assistants. Know your caregivers' capabilities before you market services. Immobilized patients require home care. Your field nursing staff's knowledge of specialized equipment determines whether your agency can fulfill the needs of certain patients. Offering respite care from homemakers to family caregivers requires lower cost of services. Providing doula services to new mothers requires approach to obstetricians, hospitals and mothers' groups. Good relationships with trusts and estates or elder care lawyers provide a constant source of referrals to your business. Prepare an outreach to them.

3. 

   Business staff maintain finance, administration and operations of a home health business.

   Determine staff employees necessary to run the home health business and costs. An Executive Director, responsible for community interface and marketing to customers, has health care presence as a physician, nurse, social worker or administrator. She draws resources to the business through relationships. A Clinical Manager, who may also be the Executive Director, works directly with the nursing and clinical staff to deliver services. He works with schedulers to ensure seamless coverage. Schedulers, usually on-call when field employees work, ensure clients have resources when they need them. Human resources hires employees. She ensures that licenses are current. She collects references and maintains employee files. She articulates organizational policies. Finance, operations and administration maintains invoices and collects money owed.

Tips & Warnings

• Consider presenting your plan to a major hospital or visiting nurses' association. Alignment with a large health care organization provides your business with referrals and capital access.

• Many home health services fail to offer cost-effective health benefits to employees. When a home health service offers good employee benefits, outstanding employees beat a path to your door.

• Determine your state's licensing requirements before writing a home health business plan. Contact your Department of Health for details.

• Add costs of business insurance and known projected business expenses when writing a business plan.

• This article summarizes many requirements you must consider when planning a business and is not a business plan.

References

• Business Plans: Home Health Care Services Business Plan
• Scribd: Home Health Care Business Plan
• Business.gov: Write a Business Plan
• Entrepreneur.com: Free Sample Business Plans
• CarePathways: Home Care Agencies

Resources

• "Handbook of Home Health Care Administration"; Marilyn Harris, ed.; 2005
• "24 Essential In-Services for Home Health"; HCPro, Inc.; 2006
• "Handbook of Home Health Standards..."; T. M. Marelli; 2001
• National Association for Home Care & Hospice
• Bureau of Labor Statistics