Home health nurse with patient
News Updated November 22, 2022

Why is Home Healthcare Growing So Fast?

Home healthcare is projected to grow at a breathtaking pace from 2021 to 2031. According to the US Bureau of Labor Statistics, employment in the sector will grow by 21%, adding 711,700 jobs each year on average over the decade. This is compared to the average industry employment growth projected at 7%.

What is the cause of this incredible growth rate? There’s not one element but rather a confluence of factors that are driving home healthcare companies to bulk up their workforces as quickly as possible.

Aging of America

The primary factor is the aging of America. According to projections from the US Census Bureau, the number of people over 65 will grow from 43 million in 2012 to 84 million by 2050, rising from 14% of the population to 21%. Older people need both greater quantities and greater complexity of healthcare services – both of which contribute to the need for more healthcare workers.

home health care industry statistics

As the percentage of the aging patient population grows, the percentage of people demanding older age-related health services also grows. More than two of three older Americans have multiple chronic conditions, whose treatment is different from acute care -- and very conducive to home healthcare. Since older people are less ambulatory, it is easier for them to receive treatment in the home rather than traveling to a care facility. In addition, seniors express a preference for home care; patient ratings of the home healthcare services they have received are extremely high. Some recent studies have shown that patients referred to home healthcare plans have better health outcomes and lower costs compared to inpatient care for post-acute services.

Value-Based Care

The growing population of Americans over 65 is Medicare-eligible, meaning that they all have or will have health insurance coverage that includes home healthcare benefits. As Medicare reimbursements are increasingly favoring value-based care, which supports improved patient outcomes while controlling costs, home healthcare is becoming a popular treatment modality.

Medicare covers many home health services, and since the Medicare-covered population will be growing for decades to come, the total dollar amount of home health benefits also will be growing. Currently, Medicare Advantage, the Medicare managed care plan, does not provide as high a reimbursement for home health as traditional Medicare coverage. That’s significant, because about one-third of Medicare patients are now enrolled in Medicare Advantage, and that percentage is expected to increase.

However, healthcare policy experts believe that home health reimbursements from Medicare Advantage will rise through regulatory changes and innovative partnerships between home healthcare companies and Medicare Advantage healthcare services providers.

Some Negatives, But Stronger Positives

Some cuts have been made to home healthcare reimbursements in recent years, and more have been threatened, like many other public services facing cutbacks to trim the national deficit. Concern is high among home healthcare providers over the future of reimbursement formulas.

But, in general, home health care executives see an expansive future. A recent Home Health Care News article on 2018 predictions for the sector shared a positive outlook with executives citing the following factors:

  • Improved payment models from government
  • More shared-risk options from commercial payors
  • Better technology and communications tools to improve patient access
  • Greater integration and collaboration with traditional care
  • Improvements in caregiver quality

Most important, though, are the fundamentals that will determine home health growth – a rapidly aging U.S. population, greater cost efficiency, better outcomes, and the preference of healthcare consumers to be treated at home.