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The Home Care Industry

The Home Care Industry

A Rapidly Growing Business

According to the 2007 Economic Census3, there are 22,975 home health care service establishments in the U.S., employing nearly 1 million people and generating revenues of over 46 billion dollars. The companies that provide home care services are just beginning to discover franchising as a method for growth. Of the current businesses, only 17% are franchises. Since the year 2000, the number of franchise brands that are in this sector has quadrupled to over 3,000 franchised businesses4.

According to FRANdata’s President and CEO, Darrell Johnson, the home care industry is highly fragmented. He says,

“The 50 largest brands control less than a quarter of the market share. This is an important finding for investors because it means that any brand with the right leadership and resources put behind it can become the market leader.”

Who Receives Home Care?

The main receivers of home care are seniors who require help with ADLs (activities of daily living) and IADLs (or instrumental activities of daily living) but they are not the only group that requires care and companionship. Home care may be provided to anyone with a terminal illness who wishes to die at home, to disabled or chronically sick adults or infants, and to adults who need assistance because they are disabled or recuperating from a hospital stay.

autuun seniors‘The Graying of America’

The number of people using home care services is set to continue to grow as population statistics show that in 2008 nearly 39 million people in the U.S. were aged over 65, up from 35 million in 1998. As we can see in the table below, supplied by the Population Division of the U.S. Census Bureau, by the year 2020, nearly 62 million people will have reached retirement age. This is the largest group of retirees in the history of the U.S. and will create continuing demand for home care and health care services and facilities.

Table 1: Projections of the Population by Selected Age Groups for the United States: 2010 to 2050

Age 2010 (in thousands) 2020 (in thousands) 2030 (in thousands) 2040 (in thousands) 2050 (in thousands)
65 years and above 40,229    54,804 72,092 81,238 88,547
85 years and above 5,571 6,597 8,745 14,198 19,041
100 years and above 79 105 208 298 601
Total 46,059 61,536 81,045 95,734 108,189


An increase in life expectancy and a decrease in fertility rates combined with past variations in birth and death rates are producing a significant shift in the aging of the population. An important variation in the U.S. birth rates occurred after World War II when there was an increase in the number of babies born. This generation of “baby boomers” is now passing the age of 60 and is one of the main cohorts responsible for the continually increasing demand for home care services. As we can see from Table 1, by 2030 there will be an increase of 44% in the number of people over 65. 

senior smiling with nurseThe increase in the demand for home care is not only the result of an aging population. It is also due to an increase in people’s desire to “age in place”. “Aging in place” is where people grow older without having to move from their home. Some 70% of American seniors spend the rest of their lives in the place where they celebrated their 65th birthday5. A recent study by the California Department of Aging estimates that 30% of women and 17% of men over the age of 75 need some form of assistance with personal care6. The study went on to show that in the age group 65-79 years, 17% need some form of assistance while 28% in the age group 75-84 years require assistance. Of the age group 85 years and older, 49% of people need some form of personal care assistance.

According to the U.S. Department of Health and Human Services and the U.S. Department of Labor, by 2050 the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living or skilled nursing facilities) will likely double from the 13 million using home care services in 2000, to 27 million people7. This figure will continue to grow from year to year as the “graying of America” continues. 


3 Health Care and Social Assistance: Industry Series: Preliminary Summary Statistics for the United States: 2007

4 FRANdata Press Release -



7U.S. Department of Health and Human Services and U.S. Department of Labor. The future supply of long-term care workers in relation to the aging baby boom generation: Report to Congress. Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, (2003). [] (20 Jan 2005)

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