The growth of this market is mainly driven by the growing geriatric population; increasing incidence of chronic diseases; and rising demand for affordable healthcare delivery systems due to increasing healthcare cost, technological advancements, and government initiatives to promote home healthcare.
What the Home Healthcare Market Looks Like?
Predicted to grow at a CAGR of 8.3% during the forecast period, the global home healthcare market is estimated to reach USD 353.56 billion by the end of 2022. In 2017, North America is expected to dominate the home healthcare market followed by Europe. The large share of this geographical segment is attributed to factors such as converging trends of aging population, technological advancement, and rising incidence of chronic diseases.
Rising incidence of chronic diseases
In recent years, chronic diseases that require long-term treatment have replaced infections as the primary cause of age-related death, and this shift is not limited to the developed world. Treating and managing chronic illnesses has become a major concern. Nearly 50% of all home healthcare patients have at least one chronic illness, and this number is expected to keep increasing in future. Chronic diseases, which affect older adults disproportionately, contribute to disabilities, diminish the quality of life, and increase long-term care costs, thus opening an array of opportunities for various home healthcare companies.
Patients with chronic conditions reportedly show signs of early recovery when treated in a comfortable environment, such as in their homes. Chronic diseases such as diabetes, coronary artery disease (CAD), chronic obstructive pulmonary disease (COPD), asthma, hepatitis, and infectious diseases have increased the burden on healthcare systems across the globe. Globally, around 415 million people were affected by diabetes in 2011; by 2030, this number is expected to rise to 642 million (Source: IDF). Around 80 to 85% of this population requires home healthcare for continuous monitoring of the disease. The number of deaths due to CAD has also increased—from 5.74 million in 1990 to 7.4 million in 2012 and 8.14 million in 2013—as estimated by the WHO. The global CAD burden is projected to increase from around 47 million DALYs (disability-adjusted life years) in 1990 to 82 million DALYs by 2020.
Changing reimbursement policies
In October 2014, the CMS announced changes to the Medicare home healthcare management prospective payment system for 2015 in the US. The changes reduced payments to home agencies by 0.3% (USD 60 million). The CMS cut payments by USD 260 million for 2016. Recently, in July 2017, CMS further proposed a 0.4% decrease, or a USD 80-million cut, for providers in 2018 and a USD 950-million cut for 2019. The proposed model for 2019 also suggested changing the unit of care considered, from 60-day episodes of care to 30 days, with patients grouped into six different clinical categories.
These changes have significantly affected the stocks of some of the largest publicly traded home health companies in 2017. For instance, Amedisys’ shares went down by approximately 24.6% in July 2017. Many home healthcare providers declared that this cut would affect the overall quality of care that will be provided. If the quality of the care decreases, the market will be negatively affected.
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What Drives the Home Healthcare Market?
The growth of the global market for home healthcare is primarily influenced by the following factors:
- Rising Incidence of Chronic Diseases
- Technological Advancements
- Increasing Healthcare Costs and the Growing Need for Affordable Treatment Options
- Government Initiatives to Promote Home Healthcare
Home healthcare is an established trend in the developed regions of North America and Europe. Due to favorable regulations and policies in these regions, homecare is rapidly being adopted. As the market in developed countries is nearly saturated, market players have shifted their focus towards the developing regions, especially the emerging economies of Asia and the Pacific region.
Geographical growth scenario of Home Healthcare Market
North America is expected to dominate the home healthcare market followed by Europe. The large share of this geographical segment is attributed to factors such as converging trends of aging population, technological advancement, and rising incidence of chronic diseases.
Asia is expected to grow at the highest CAGR during the forecast period. Factors such as rising geriatric population, increasing adoption of innovative techniques, increasing disposable income, expansion of home healthcare companies in this region, rising awareness of home healthcare, and increasing need for affordable healthcare delivery systems are expected to drive the growth of this market in Asia.
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Leading market players and strategies adopted
The home healthcare market is highly competitive with the presence of several small and big players. Prominent players in the market include Philips Healthcare (Netherlands), Kindred Healthcare (US), Linde Group (Germany), Almost Family Inc. (US), Abbott Laboratories (US), LHC Group (US), A&D (Japan), Amedisys (US), Fresenius (Germany), Omron (Japan), McKesson (US), BAYADA Home Health Care (US), Kinnser Software, Inc. (US), and Roche (Switzerland).