EagleTribune.com, North Andover, MA

Business

June 2, 2013

Home health care industry sees boom ahead -- and challenges

Willie Peterson II can’t say enough good things about the home health care services he receives, or about Lynn Adams, the registered nurse who visits a few times a week to care for him at his Decatur, Ga., home.

“If not for them, I’d be up the creek without a paddle,” he said.

Or in a nursing home. Peterson, 62, was paralyzed from the waist down by a falling tree in 1998 and needs regular skilled medical attention. Now he has personalized care that keeps him out of the hospital and feeling independent.

Peterson is at the front of a coming wave. Demographics and economics are expected to combine to cause a boom in the demand for home health services in the next two decades. The industry faces challenges as it seeks to meet patient needs, however.

According to one projection, the number of people age 65 and over is expected to increase to 72 million by 2030, when that group will make up about one-fifth of the population, up from about 40 million in 2009.

While the supply of customers should only increase — generally a blessing for any business — the financial reward for taking care of all those new patients, particularly those requiring the most care, is uncertain, according to industry executives.

Providers fret over shrinking reimbursement rates from Medicare. They say that’s put financial pressure on them. Some in the industry say the number of providers could dwindle and some people who could really benefit from home health services might not be able to obtain them.

“Providers are scratching their heads,” said Mark Oshnock, CEO of Visiting Nurse Health System, an Atlanta-based nonprofit and Adams’ employer. “With margins approaching zero, it’s a bit of a challenge.”

In a recent earnings conference call, Tony Strange, CEO of Gentiva Health Services, an Atlanta-based for-profit provider of home health care, cited an 11.5 percent reduction in Medicare reimbursement in the past three years.

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