Home Health Agency Valuation Services

Due to the low cost per day of home care relative to other settings (e.g., hospital, skilled nursing), the Home Health industry is a key component amidst the healthcare industry’s shift to the Triple Aim: reduce costs, improve patient satisfaction, and improve the health of populations. Services provided by a Home Health agency include skilled nursing, physical therapy, occupational therapy, speech-language pathology, aide service, and medical/social work.

For clients that require a fair home health valuation of for their business transactions, VMG Health is uniquely qualified to assist with a fair market appraisal.

Value Drivers

Given the nature of the services provided by the Home Health industry, the predominant demographic across all sectors are seniors. A key value driver of Home Care Services businesses is the current level and future status of Medicare reimbursement rates. Notably, like many other sectors, Medicare has begun a value-based payment program, as well as a quality reporting initiative for certain industries within Home Health Services.

The operating expense profile of any Home Health entity is usually dominated by employee salaries and mileage reimbursement. As the mix of workforce can differ depending on the services provided (e.g., registered nurses, licensed practical nurses, licensed vocational nurses, aides, and social workers), understanding the current and required level of staff is important. Challenges include determining the level of staff required to meet projected volume, as well as local labor market influences.

A third key value driver in the Home Health industry are relevant certificate of need (CON) moratoriums or other licensure requirements. The CON and licensure requirements are governed at the state-level, and thus vary state by state.

VMG Health has insight into the latest trends and numerous services provided by Home Health agencies. As a result, we can rapidly assist in providing fair home health agency valuations for Home Health businesses.

Relevant Publications on Home Health Services

Home Health Business: Are You In or Out?