A home healthcare business is an excellent investment in today’s market. If you are planning to purchase a home healthcare agency business, it’s necessary that you know a few things about it:
- You don’t need a degree in healthcare to own a home healthcare business
Contrary to popular misconception, you don’t need to be a doctor/nurse or have a degree in healthcare to buy and operate a home healthcare service. It is only when you personally want to administer care to patients, that you need to be qualified and certified.
There are a few non-medical home healthcare services that you can offer, such as companionship and housekeeping, which you can do without a degree in healthcare. Additionally, if you’re only planning on managing the operations of the company and hiring nurses to provide care, then you don’t need a degree in medicine.
- It is your responsibility as the new buyer to ease your patients’ fear of the new management
It can take months for a home healthcare service to acquire a patient’s trust. When the company is sold to new management, the patients and their families can begin to feel uncertain and nervous. It’s up to you to relieve them of their tension.
But this can be hard to do, because of the magnitude of the work involved.
When you buy a home healthcare business, you take on its entire patient caseload. It’s now your responsibility to manage the clients’ medical needs and their expectation. You’re also responsible for maintaining the company’s reputation. If you are unable to do these, there is huge risk of patients moving to a competitor.
One way to mitigate this problem, is to ask the current owners to give you the training you need to manage the home healthcare business. You can also learn about their practices and guidelines, which have helped them run their company successfully. This is especially helpful if you’ve never operated this type of business before.
- The company’s accreditation & licensing status can impact its sale price
For a home healthcare business to operate anywhere in the United States, the owner must first have applied for and received the relevant state/federal licenses, accreditations and permits. These accreditations and licenses can affect the sale price of the listing.
If a business owner has recently renewed the accreditations and licenses for the home healthcare business, they will value the company higher and you’ll need to pay more to acquire the company.
Before investing in the business, check which alternative leads to higher savings – buying a company with its licenses renewed or buying a company with expiring licenses and renewing them yourself.
- In a home healthcare business, location, expertise and demand are interlinked
A home healthcare company can either provide an all-encompassing service i.e. provide care for a variety of conditions or it can specialize in a care/treatment.
While specializing in a particular type of care is a great way to showcase your expertise, it can really limit your patient base as well. This is especially true if you provide your services in a locality where your niche is small.
However, if work in a locality where your niche is growing in size, then you can price your specialized services much higher than the market rate. This is because you are qualified to offer services which other home healthcare providers aren’t.
So, it’s imperative that you conduct your own market research before buying a home healthcare business. Speak to local service providers, drug store owners and private practice doctors to get their inputs about the patient demographic in the area.
- Your referral sources and suppliers can impact your profitability
Referral sources refer to those individuals who can refer patients to you. These include doctors, nurses, pharmacists, therapists, counsellors, rehab center operators, ex-patients and social workers. It’s very important to develop long-lasting, positive professional relationships with these people, because they have the potential to make or break your new business.
So, before buying an existing home healthcare company, visit these referral sources and introduce yourself to them.
The same goes with suppliers who can provide equipment, medications, linen and other materials necessary to run a home healthcare business. Your objective should be to try and get the same favorable terms (or if possible, better terms) for the supplies that they provide the current owner of the company.
- Home healthcare insurance should be looked at
As a home healthcare company, you will be providing care for patients with different conditions and varying degrees of medical conditions. You will also be interacting with families who have diverse temperaments and expectations.
Managing these expectations can be very difficult. Sometimes, families may sue your company on grounds of non-fulfillment of service, negligence or damage caused to their property. The Home Healthcare Insurance is a good measure to protect yourself from the risks that arise out of this business.
The Home Healthcare Insurance usually refer to two different types of coverage:
- The Professional Liability Insurance – This insurance provides you protection against any professional mistakes or negligence that your nurses and care givers make while working with the patient.
- The General Liability Insurance – This insurance offers protection against any general liabilities that occur when the nurse/carer is in the patient’s home. For example, if they accidentally break a vase that’s on the table when providing care.