Entering the home health market is equal parts challenging and rewarding. Like investing in Apple in the 70s, pivoting to a home care business startup may be the best idea since sliced bread. Here’s everything you need to know about how to start a home care business!
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Article Roadmap
Steps To Start A Home Care Business
Starting a home care business is like creating a sourdough starter. It takes plenty of patience, the right ingredients and a tried-and-true formula. Here’s a basic roadmap to help you embark on your home care business journey.
Create a Plan
Planning is essential to the success of any new venture. First, you’ll need some clarity. Start by answering the following questions:
- What is our business focus area?
- What services do we want to provide?
- What is our budget?
- Where will we operate?
- Who is our target market?
- How much do we want to charge our clients?
Selecting the right business structure is also crucial.
Keep in mind that the type of business will determine your tax amounts and organizational structure.
Once you understand your scope of operations — and whether it’s viable — you can formulate a blueprint for your business.
Work Out Your Finances
Money makes the world go round. You can have a brilliant plan, but you need greenbacks to implement it. Turning a profit in the first year of operations is extremely uncommon, so you’ll need to draft a budget and figure out whether you’ll need a loan to stay afloat at the start.
Form a Legal Business Entity
Starting a business is a lot like getting married – you gotta get the government involved. You’ll need to set up as a legal business entity, so you’re not personally liable if you get sued. Next, you need to apply for an Employer Identification Number (EIN) to pay taxes.
You must also apply for a national provider identifier (NPI) number. Note that the requirements for home care business licenses vary from state to state. Check with your state’s Department of Health for assistance.
Most states require you to register your business with the Secretary of State. You need to file your business name and check if it’s available.
Secure Licenses and Certifications
Before operations commence, you need to maintain compliance with federal and state regulations by applying for the right licenses and certifications. You may need additional approved training, Medicare or Medicaid certification, Home Health Aide Licensing and specific state permits.
Medicare is especially important, as it opens the door for a large clientele base. Medicare Part A and Medicare Part B are primary patient insurance that cover several home health services.
Medicare license accreditation exams can take up to a year in the U.S. The federal government agency will perform a complete audit of your home care business and patient records during the process. In some states, you might need to take a state jurisprudence exam to obtain the license.
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Get the Right Insurance
Like in baseball, stay on the ball by keeping your bases covered. Protect your business and employees from unforeseen circumstances with general and professional liability insurance.
Hire and Train Staff
Teamwork really does make the dream work. Hire qualified staff who align with your company’s vision and prioritize client care. Check for up-to-date licenses and contact past employers for references.
Set Policies and Procedures
Home care is extremely people-centric. You need to set proper policies and procedures to provide the best care possible. Define and enforce the following areas of operation:
- Client intake
- Care planning
- Hiring and HR
- Scheduling
- Payroll and billing
- Caregiver training
- Client rights and responsibilities
Develop a Marketing Strategy
Now, you have to get people in the door. You need to develop marketing strategies to reach your target audience and get referrals. Some ways to do this are by building an online presence, investing in marketing and CRM software, and working on your branding.
Invest in Equipment
To run a homecare business startup successfully, you’ll need to invest in the tools of the trade. The equipment you need depends on the type of care you provide. Basic equipment includes personal care tools, moving, handling and lifting equipment and medical devices.
Prepare for Operations
Before you open your doors, setting up operations and processes is essential. Ensure day-to-day duties flow smoothly by implementing workflows for scheduling, time-keeping, EVV, time and mileage tracking.
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Best Practices
If you’ve made it this far, congratulations! You now have a bare-bones idea of how to start a home care business. However, there are some tricks of the trade you’ll want to use.
Conduct Compliance Checks
Stay ahead of compliance by conducting regular compliance checks and test run audits. Record due dates for employee licenses and set reminders when they need to be updated.
Create an Online Presence
We’ve all been guilty of googling businesses we come across (and judging their credibility based on their website). Creating a website, setting up a Google Business profile and managing your social media play a large role in increasing brand awareness and customer trust.
Invest in Home Health Software
Imagine you could transfer past patient records, set up caregiver schedules, create care plans, manage claims and monitor EVV using one platform. Home health software uses automation, real-time information and workflow management to streamline operations.
It also integrates with other software like EHR, accounting and CRM software to facilitate quick data transfers and minimize unnecessary code-switching.
Empower Your Caregivers
Happy caregivers equals happy patients. Give your caregivers tools to succeed by creating training manuals, setting up clear processes and giving them access to educational workshops and seminars.
Set up HIPAA-compliant secure messaging to make communicating with backend staff and patients easy.
Build Partnerships
Quid pro quo goes a long way to building a loyal customer base. Partnering with local hospitals, nursing homes and healthcare providers will help boost your referrals and build your reputation in the community.
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Primary Benefits
Like training for an Ironman, figuring out how to open a home health agency takes planning, preparation and commitment. It’s not a decision you make on the fly. However, the rewards for investing in a successful home care business will make it worth your while.
Boost Your Income
Investing in the homecare industry can land you a pretty penny. Increased demand from COVID and an aging population led to a revenue boom of $136.2 billion in the last five years, with no sign of slowing down. Since home care isn’t routinely short-term, you can rely on a steady income stream.
Improve Your Clients’ Quality of Life
Helping your patients recover the comfort of their home can play a large role in boosting morale, increasing independence and maintaining a positive atmosphere. It also improves health outcomes and cuts down on hospital bills. Patients who receive home health care have lower rates of readmission.
Invest in a Growing Industry
McKinsey predicts the home health industry will grow from $654 billion in 2021 to $790 billion in 2026. Getting in on the ground floor means you can build your business to meet rising demand and navigate changes in government policy.
Control Your Workload
Flexibility isn’t a perk for just your patients. As a business owner, you can choose your clients, pick your operating hours, hire staff to help with your workload and manage your involvement. You can scale your operations up or down based on your clients’ needs and demands.
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Challenges
Every business comes with its own unique challenges. Home care is no exception.
Increased Liability
Prime candidates for home health aren’t usually at their peak. They may be vulnerable to comorbidities and are at high risk for injury or illness. If an incident occurs under your care or due to caregiver error, you may be liable.
Emotionally Taxing Workload
Running any business is stressful. But, any business that deals directly with a client’s health and quality of life is especially taxing. You must prepare to navigate distressing scenes, difficult clients and unhappy caregivers.
Stringent Laws and Regulations
Home care is highly regulated. Businesses have to juggle PDGM models, OASIS assessments, HIPAA compliance and changing CMS regulations. Penalties for failing to meet compliance requirements can lead to hefty fines and lawsuits.
FAQs
What is a home care business?
A home care business is a professional support service providing assisted care to home patients. The support offered can range from nursing services to physical therapy and hygiene needs. Typically, home care businesses can be medical or non-medical.
Medical home health requires trained medical professionals to run tests, monitor symptoms, administer medicine and dress wounds. Usually, reporting and compliance are stricter. Non-medical home care primarily improves clients’ quality of life and involves companionship care, medication reminders, cooking and cleaning.
How much does it cost to start a home care business?
Breaking into the home care business without knowing how much it will cost you is like going on a road trip without GPS. It’s essential to understand typical costs and potential money pits. Here’s a basic rundown of costs you can expect:
Equipment: You’ll need to factor in medical equipment like gloves, tools to monitor symptoms, medicine dispensers and accessibility aids. You may have additional insurance or transportation costs if you prefer to source your equipment through a vendor.
Licenses and Permits: Depending on the state you’re in, license fees differ. You must pay a one-time registration fee and purchase certifications pertinent to your state.
Insurance: Account for the unaccountable with general and professional liability insurance coverage. You may need to spring for additional premiums if you are a medical home care business with a larger number of caregivers.
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Next Steps
Deciding to start a new business is a gargantuan step. It isn’t as simple as choosing a restaurant for lunch. We hope this article serves as a detailed blueprint on how to start a home care business. If you need an extra cheat code, use our free requirements template to determine what home health software may be a good fit for you.
How do you think software can help kickstart your home care business? Let us know in the comments below!