Private Duty Home Care: Challenges to Growth Webinar #1

PrivateDutyHomeCare:TheChallengetoGrowth

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Growth 6-8%

Annually

New capital inflows

Increased competition

Increased agency failures

Increase in acquisitions

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Non-Franchise

60%

Franchise40%

OwnershipType

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Total estimated number of agencies : 15-17K

Total annual industry revenue estimated: $20-30 billion

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~25 agencies have achieved annual revenue greater than $20 million

Only 1% to 3% of the industry has annual revenue over $10 million

Average agency has annual revenue between $1.5 and $3 million

Private Pay Home Care industry estimated at 15,000-17,000 agencies

Fundamental Reasons for

Fragmentation

LowBarrierstoEntry

LackofDifferentiation

ProliferationofFranchises

LimitedAccesstoCapital

PriceCompetition

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Access to field staff—increased competition among other home care companies, healthcare providers and industries that need a low-wage workforce adds pressure to supply. In 2014 there were 1.8 million personal care aides employed. By 2024, the industry will require 2.4 million to meet demand.

Multi-sided business model—one of the more difficult business models to execute. The home care agency acts as the broker between the family (buyer) and caregiver (seller). However, the model is further complicated by a two-phased sales cycle for clients (referrals sale and family sale and controlling quality with caregivers.

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APrivateDutyHomeCareExecutiveMembershipGroup

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• Whatdoesittaketobreakthroughindustrybarriers?• Whatarethesuccessfulcompaniesdoingtoscale?• Whoisinvesting,buyingandlookingtopartner?• Whatishappeninginotherpartsofhealthcarethat

representopportunities?• Howtoaccessotherexecutivestoshareinsights,

collaborateandinnovate?

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Chip Measellschip@insidescalability.com

202.618.4713

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