New Home Health Start Ups
The Home Care Reality
The statistics are daunting when it comes to home care for older persons. There are some 55 million adults taking care of their parents, with over 2 million caregivers.
And close to 92% of adults when surveyed would rather live in their own home as opposed to a nursing home. The fact is that in a large percentage of cases, family members have difficulty caring for a senior relative, so searching for a caregiver is a necessity.
Home care agencies continue to grow in popularity due to our aging population and preference of many older Americans to be cared for in their homes. Starting a home care business to meet this great demand for in-home care may potentially be a rewarding business enterprise.
Skilled home health agency vs. non-medical home care agency
Initially it is very important to understand the distinction between starting a medical skilled home health agency versus a non-medical home care agency. Basically non-medical home care services include personal care, assistance with daily living activities, meal preparation, housekeeping and transportation. Such services are often vital for folks to remain safe and comfortable in their homes. Private pay rather than 3rd party billing sources are the most common form of payment for non-medical care.
Medical skilled home health agencies as the name implies administer skilled licensed nursing and rehab therapy services under physician’s orders with strict guidelines imposed. Medical home health agencies require extensive licensures including Medicare and Medicaid certifications. Most newcomers to this field are more likely to consider the less complicated non-medical home care venture with typically lower start-up costs. The focus here is aimed at this non-medical home care agency start-up.
Starting a non-medical home care agency
Your next decision is whether to start a home care business on your own or team up with a home care franchise. There are pros and cons for both but basically franchise fees provide a business model along with start-up guidance and ongoing support. Launching out on your own usually has lower start-up costs without entry or re-occurring franchise fees, less hand-holding but more independence with business strategies. When electing the independent option, write a detailed plan of how you will start, operate, and grow your business.
Training and medical background
Formal training or a medical background is not required for owning and managing a home care agency. Many healthcare workers find this business endeavor attractive due their experience but it is by no means a prerequisite. Strong communication and organization skills with a well-planned business strategy are more fundamental to success. Licensure requirements vary widely from state to state for non-medical home care agencies however are generally not so complex to discourage many from undertaking. Start by contacting your state licensing board to request a package or kit detailing all requirements. See lists of state contacts below.
Anyone thinking about starting up a home care/health agency must first develop a working budget for the first year. There are some basic costs that all home care start-ups share depending on the type of agency and the state and federal rules: name and logo development, policy and procedure development if in a licensed state or going for Medicare, computer software and hardware, sales and marketing, recruitment and retention, office furniture, supplies, and equipment, office space rental, plus telephones, and personnel costs. For the Medicare agency start-up costs, the requirement of paid clinical staff to care for a minimum of 10 patients has to be added into the start-up budget cost. Those monies, considered part of the start-up costs, are not recoverable from the Medicare. In addition, Medicare and the states will require a specified amount of money in a bank account to prove the financial viability of the new organization. All of these elements must be included in the start-up budget.
Basic Requirements and Advice
Some basic requirements apply to starting a home care business similar to that of most other businesses including the following:
1. Set up Business Entity
Set up the business entity that will best fit your needs. (Sole proprietor, Partnership, Limited Liability Company, S Corporation, C Corporation) Consult with an attorney and or CPA or research online on your state government website (www.state.(your state initials).us about appropriate business structure, info regarding payroll, sales tax, workers’ compensation and business liability insurance.
2. Obtain Employer ID Number
Obtain a Federal Employer Identification Number (EIN) from the IRS (IRS form SS-4) similar to your personal social security number to identify your business with regards to tax liability.
3. Register with Secretary of State
Register your business with Secretary of State in your state. Decide on a business name and check availability in your state including consideration for domain name for website. When approved have letterhead, business cards, brochures printed.
4. Check on license requirements
Check on requirements for city or county business license and apply as needed.
5. Prepare your finances
Establish a business checking account and credit card account and apply for business loans if required to meet start-up costs. Set up a computerized accounting system.
6. Write or buy a Policy and Procedures Manual
Write or purchase a policy and procedures manual to address new client admissions, plan of care, scheduling, employee and payroll records, orientation, in-service training, client billing.
7. Find and hire caregivers
Find and hire the best caregivers available as the reputation of your business weighs heavily upon the quality of care delivered. Spend time interviewing prospects and checking references to find most competent, compassionate and resourceful caregivers.
Post-employment ads on relevant job internet sites, at local community colleges with CNA and nursing programs and local newspapers.
8. Connect with referral sources
Determine best sources for referrals in your area such as connecting with long-term care facilities and hospital discharge social workers. Contact local physicians, senior centers and rehab outpatient centers to reach prospective clients.
9. Build a website
Hire a website designer to create a professional website with content directed towards internet savvy adult children of seniors who are responsible for securing home care services. Post your agency listing on established elder care websites with strong internet presence for greatest exposure.
10. Find an office space
Find a location where care is affordable to population and without excessive competition. Save your money on costly high traffic commercial office space and instead find a cheaper accessible location for your employees.
11. Be creative with scheduling
Be creative with scheduling to manage ever changing balance of employees with client needs. Turning away clients is harmful for future referrals but at same time risking poor care due to lack of staff is equally damaging to a company’s reputation.
12. Attitude is everything!
Be resourceful in managing day to day operations. Be thoughtful and respectful to your employees. Be understanding and accommodating to your clients’ needs. Reflect upon reasons you started your own business in the beginning and when times are tough and take time to savor the small accomplishments along the way.
