How To Start a Home Care Agency in Seven Steps

With every passing day, the USA's population is aging. As people get older, they might require personal care, as well as additional assistance in performing daily tasks and overcoming health conditions. Rather than moving into a senior-living or assisted-living facility, many of these individuals prefer to stay in the comfort of their own homes. 

This has led to a surge in home healthcare demand, not only in the US but across the world. As the market experiences this boom, a home health agency has become a great business opportunity. Keep reading to learn how to start a home care business from scratch.

The Rising Demand for Home Healthcare

By 2034, the estimated global market size for home healthcare will be $1.44 trillion. North America will be at the forefront of this growth. Already, the North American home healthcare market was valued at $188.98 billion last year. It’s poised to enjoy a double-digit compound annual growth rate (CAGR) of 13%, making it even more lucrative.

This growth will benefit agency owners and home health caregivers, including their clients. The rates for home healthcare and home care have risen for the past five years and are expected to continue growing. Moreover, the Census Bureau shared that the country’s elderly population aged 65 years and older will outnumber young citizens aged 18 and under for the first time by 2034.

This demographic shift will drive the demand for home care providers in the US. Within the same timeframe, the number of home healthcare aides will increase by 21% according to the US Bureau of Labor Statistics.

Seven Steps To Learn How to Start a Private Home Care Business

The need for home health care businesses has never been more urgent. As a business owner, you can position yourself to meet this rising demand. To start a home health care agency, you need to follow a step-by-step approach to cover all your bases before launching your business. This methodical approach helps you ensure that your business is scalable and future-proof. 

1. Conducting Market Research

The first step is judging the demand for home care services in your local market. Look for data that shows how many people use home healthcare services in your city or town. Tailor your services to match these needs. 

Some forms of home care are non-medical. These provide assistance for daily living (ADL). Others offer medical home health services, which involve wound care and wound dressing, administering medicine, and physical rehabilitation. See which services are being offered by existing agencies in your chosen market to get an idea of your target audience’s needs.

2. Regulatory Compliance

As a healthcare enterprise, home care agencies must adhere to strict regulations at the state and federal levels. Some boxes that must be checked include acquiring comprehensive business insurance to cover liabilities, enrolling as a provider, registering with Medicare and Medicaid, and putting in place systems to ensure HIPAA compliance to protect your clients’ medical data. Additionally, ensure you have contracts, liability waivers, and employee agreements in place to legally protect your agency and its staff. You can consult legal counsel to get detailed advice on all the necessary steps you need to take as you learn how to start a private caregiver business.

3. Creating a Business Plan

Your home health agency will become clearer once you draft your business plan. This includes deciding which type of structure your agency will take, like choosing between a sole proprietorship, partnership, or limited liability company (LLC). You should also prepare a document that contains in-depth information about your agency, such as an executive summary, marketing plan, service list, operational plan, and financial plan. Include detailed financial projections, such as initial startup costs, monthly operational expenses (software, staff salaries, equipment), and revenue expectations, to ensure you manage cash flow effectively.

4. Acquiring Licenses and Certifications

Once you’ve decided on the kind of home health agency you want to set up, you need to apply for a federal Employer Identification Number (EIN). You should also register your new business with local and state government authorities. Lastly, you’ll want to make a list of all the mandatory certifications your agency’s employees are expected to hold. Ensure that your caregivers have the required qualifications, including certified nursing assistant (CNA) licenses, first aid/CPR certification, and other home care licenses that might be required within your jurisdiction. Provide ongoing training to meet regulatory standards.

5. Securing Funding

The hardest part of starting any new business, especially in the healthcare industry, is coming up with personal funds or finding investors willing to bear the costs. Even if you won’t be able to fund the startup from your own pocket or attract investors, you can still learn how to start a home health agency with no money. There are many government- and private-funded grants available for healthcare businesses. By applying for one of them, you can access financial assistance for your new home health agency.

6. Hiring Staff

With your home health agency’s funding secured, you can shift your focus to recruiting caregivers for the business. Take a look at your budget to determine how many employees you can hire, and create a profile of your ideal employee to compare how potential recruits could support your agency’s mission. Be sure to implement a thorough onboarding process, including background checks, employee agreements, and training programs for HIPAA and safety compliance.

7. Implementing Software Solutions

Finally, you need to equip your employees with the best possible care management software to boost your home health agency’s efficiency and productivity. Moreover, in some states this software is crucial for full compliance with regulations like EVV (Electronic visit verification).  Some examples of the technology needed for launching a home health care business include:

• Scheduling software
• Telehealth platforms
• Electronic Health Record (EHR) systems

You may also want to invest in billing systems that handle Medicare/Medicaid claims efficiently, as well as remote monitoring tools to track patient health metrics in real time.

Challenges of Running a Home Care Business

Even if you follow the steps mentioned above, you might encounter hurdles while trying to start your home care business. Be prepared for the following obstacles by crafting solutions or workarounds in advance:

• Following HIPAA guidelines and regulatory compliance
• Managing caregiver turnover and maintaining employee satisfaction
• Caregiver transport to and from clients’ homes
• Providing employees with the latest training
• Tracking relevant key performance indicators (KPIs) to evaluate your home health agency’s performance

To address caregiver transport issues, consider using non-emergency medical transportation (NEMT) services, offering transportation stipends, or investing in a fleet of vehicles.

Having a ready fix for these problems will help your enterprise grow sustainably while providing clients with high levels of service.

Conclusion

Congratulations! You’re now equipped with the knowledge to start your own home healthcare business. To give your business the best shot at success, you’ll need dedicated home healthcare software that performs a variety of essential tasks while allowing employees and owners to focus on their core priorities. 

Jiris, one of the most efficient and seamless home healthcare software solutions, can help your agency comply with regulations while boosting its efficiency. Give it a try after completing the seven steps mentioned above!

Call 1 (800) 485-4747 or request a demo to learn more about our software.