The 60+ population is increasing in America. It's no surprise then that Senior Care is flourishing. Find out all that you need to know about the industry if you are looking to invest in Senior Care.
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Free Industry Reports-2015 SENIOR CARE INDUSTRY
1. Private & Confidential
CHSLI Proposal Private & Confidential 1 | P a g e
FREE INDUSTRY REPORTS 2015
SENIOR CARE INDUSTRY
2. INDUSTRY REPORTS 2015 | Senior Care Industry - Confidential Page 2
A brief overview
As Americans, we have quite a few senior citizens among us, thanks to the baby boomer generation. The
aging post war generation has been swelling over the last few years. As a result, elderly care, or simply
senior care has become a booming business in the US. This broad term encompasses services such as assisted
living,adult day care, long term care, nursing homes, hospice care, and home care. It is expected that the
senior population will keep exploding till 2050. The 65+ population is expected to reach 88.5 million - in
the United States. 7000+ people turned 65 each day in 2011. During the late 2000s, there were more than
17,000 providers of home healthcare, providing anything from temporary illness, disabilities, to acute
illness. Considering that even during the 1960s, there were just about 1000 senior care services, the figure
is quite impressive.
Industry Background
Contrary of the name, the senior care industry is not very old. It only came about during the 1960s with the
advent of government activity such Medicare and the National Institute on Aging. Moreover, longer life
expectancy, meant more institutions where the elderly could be taken care of. As the 1960s progressed,
federal money was used for home care. By the 1970s, public home healthcare was extended for the benefit
of younger citizens as well. Medicare has by far been the largest source of income for home healthcare
services covering about 40% of the total revenue from the industry. The rest is accounted for by way of
private insurance and out of pocket costs, which made up 22%.
An interesting fact about the senior care industry is that it is most commonly based more on reputation than
on price competence, as prices are more or less the same for all private insurance companies. Aging nurses,
high turnover and worker retention are all issues that senior care service franchisees will have to consider in
the years to come.
Home Healthcare
Providing home healthcare is the primary aspect of the senior care industry. This is where the opportunity
for franchises exist. Services can be either medical care or non-medical in nature and some are a
combination of both. The most common diseases that require home care are heart ailments, diabetes and
cerebral vascular disease. About 70% of in home patients are 65 plus. Non-medical assistance includes aides
helping seniors with chores, preparing meals, taking medication, helping with bathing and general
companionship. Non-medical care might not seem like a good way to tart franchising, but is often more of a
need than regular medical care.
3. INDUSTRY REPORTS 2015 | Senior Care Industry - Confidential Page 3
So why are home healthcare franchises on the rise? Here is some valuable
insight:
● Lower investment: While it can cost $500,000 or more to open a fast-food franchise, most home-
healthcare franchises cost $150,000 or less to start up, a feature that is attractive to investors. The
investment is primarily for hiring marketing, recruiting and training staff, and for office space.
● High revenue: From that relatively low investment, home-health franchises can drive a lot of
volume, especially after the first year's ramp-up making connections with key referrers such as elder-law
attorneys and social workers. Territories are usually large. Industry research firm Home Care Pulse found
median franchise home-health revenue was nearly $2 million. What's more, franchise owners brought in
substantially more than independent operators, Home Care found, giving their businesses a resource
advantage over the competition.
● Growing demand: Demand is forecasted to grow sharply, thanks to the aging baby boomer
generation. The number of people over age 60 is set to triple to 2 billion by 2050, the UN estimates.
● International opportunity: Most US franchises are just beginning to look overseas at opportunities,
with Right at Home being one of the leaders - it recently became the first US home-healthcare franchise to
enter China. But the rest of the world is aging too, so there is still plenty of growth opportunity in new
markets.
● Changing Landscape: Mom-and-pop home healthcare operators struggle to keep up as national,
state and local laws evolve. For instance, Seattle is currently debating a possible $15-an-hour minimum
wage law. Independents are also hard-pressed to obtain insurance to cover their workers? activities in
clients' homes.
What the future holds?
Although family is still supposed to take care of the elderly, the healthcare service has become a boon for
people who can?t afford to spend much time with their aging parents. This will lead to a rise in the number
of nursing homes and home healthcare institutions. In 1990, there were 11 possible caregivers for every
family member needing care. By 2050 it is estimated that the proportion will reach four to one. In 2006, 23
percent of Americans provided care for someone over fifty, and it is predicted that nine million seniors will
require long-term care in the foreseeable future. Additionally, the relatively high cost of nursing homes and
hospitals has led to a boom in the home healthcare industry.
Home healthcare can be less stressful and more convenient for seniors, as well as more affordable. 89% of
seniors expressed a desire to remain in their homes as long as physically possible, which will naturally
provide more home healthcare business. All in all, the senior care industry is all poised to expand in the
near future. So why don't you invest?