Homecare providers have been challenged by increasingly scarce public funding relative to rising demand and are responding by developing private pay offerings directly targeting users of the services. To date, the U.S. market has achieved a significantly higher level of consumerization, with private pay being the default funding option for the provision of homecare services.
Home healthcare services remain mainly funded by governments, with a smaller role for private pay. While challenging, funding dynamics are more favorable than for homecare, as the provision of health services at home reduces the burden of care for hospitals and other higher-acuity post-acute care settings, freeing up high-cost resources for higher-acuity patients.
L.E.K. has significant experience with homecare and home healthcare providers across North America, Europe and Asia-Pacific, including those offering personal and social care services and healthcare services such as complex injection administration.
We collaborate with all types of homecare and home healthcare providers to develop and implement solutions that are responsive to market trends such as an aging population, the increasing importance of brands and the consumerization of patients, reimbursement and budget pressures, integration and consolidation, emerging technology, and increasingly stringent regulatory environments.
Key questions and challenges
We help homecare and home healthcare providers address the following key strategic questions:
- How should we re-engineer our business to be less dependent on public funding?
- How can we develop a successful branded private-pay offer that is attractive to users?
- Which segments of the homecare and home healthcare markets are attractive, and where should we focus? Which opportunities should we prioritize in the short term versus the medium term?
- How can we build on our existing core competencies to expand our offering?
- How can we better manage our key partnerships, such as referral sources, as market dynamics change?
- What is an effective strategy for our organization to grow, both organically and via M&A? Which companies would constitute attractive acquisition targets?
- How should we review our business model in light of increasing labor costs, and what technology solutions are available to improve our operational efficiency?
- How can we best integrate technology into our service offering and cater to users’ needs? How can we be proactive in the era of digital healthcare?
- Which international markets represent attractive growth prospects, where we can leverage our expertise to create value?
Examples of our work
To learn more about how we help clients create value, please refer to these case examples:
- Developed a five-year strategic plan and action plan of prioritized initiatives and operational priorities for a leading home healthcare company, including comprehensive market assessment, development of discrete service offerings to address customer segments, and evaluation of partnership opportunities.
- Developed a comprehensive strategic growth plan for the board of directors of a home infusion services provider. We provided a prioritized set of strategic initiatives and an implementation roadmap that is driving revenue and margin growth.
- Completed a market-by-market review for a home health, home infusion and DME aggregator, and evaluated specific private payers (Medicare Advantage, commercial and managed Medicaid plans) for potential partnerships on a market-by-market and a multiregional basis.
- Completed commercial due diligence of a franchisor of private-duty, nonmedical home healthcare to patients in the home and in other long-term care settings. The investor completed the acquisition and is pursuing a growth and performance improvement plan.
- Advised a leading provider of live-in and live-out complex care services on its three-year strategy, focusing on the provision of specialized care in the home for ventilated and nonventilated patients with neurological disorders and spinal injuries.
- Evaluated adjacent growth opportunities across multiple European markets for a leading specialist provider of homecare services. We analyzed and prioritized approximately 15 potential growth opportunities based on their market attractiveness and fit with the business’ core competencies. The client gained clear insight into the scale of its platform and which opportunities to pursue in the short and medium terms.
- Advised a leading U.K. provider of homecare services on its strategy in light of deteriorating public funding. We evaluated the relative attractiveness of publicly funded versus private-pay homecare and the potential to expand into the more attractive home healthcare market.
- Conducted a detailed review of the French home healthcare market, assessing the demand outlook, funding environment and competitive landscape of key segments: oxygen therapy, ventilation, perfusion, nutrition and insulin therapy. The client emerged with a foundational understanding of the market segments that permitted a thorough evaluation of organic and inorganic growth opportunities.
- Evaluated the potential for a leading private hospital group to extend its participation in home healthcare services, including a detailed review of the market and constituent segments; the attractiveness of, and the most suitable approach to capture, the opportunity; and key risks and means to employing mitigation strategies.
Opportunities for Health Systems and Investors Within Post-Acute and End-of-Life Care
The confluence of several key trends in U.S. healthcare, including an aging population, shifts away from inpatient care, and a rise in healthcare consumerism has led to an increased emphasis on post-acute care, particularly care that permits aging in place.