How Much Do Home Health Agencies Make Per Patient?

If you are planning to start a home health agency, then you should know that you are signing up for quite a noble cause. There are millions of older citizens who require help as they struggle with their age-related health problems.

As a home health agency, you will be required to help senior citizens live on their own for as long as they can.

A Home health agency business has to cover a broad spectrum of services, such as physical and occupation therapy, skilled nursing. Not to forget, you will have to assist them in carrying out their daily activities, such as dressing up, showering, eating, housekeeping and maintaining their medication routine.

Any negligence on your part while delivering these services can jeopardize the patient’s health and call for legal action against you from the patient or their relatives. Such a situation can impose a hefty expenditure on you as the potential compensation and legal fees can put your whole business on the risk.

This is where you need an insurance policy for your home health agency business to mitigate the risks. You can find out more about home health care agency insurance here.

Pricing mechanism

When starting a home health agency, it’s essential to stick to proper pricing for your services. Usually, home health agencies charge patients on an hourly basis. However, live-in caregivers tend to charge patients at flat rates. In 2019, around the United States, the average cost for home health care for seniors was $21 per hour. The average rates in different states range between $16 and $28 per hour.

You should note that these figures are average costs observed from home health agencies. You can retain private individuals to offer most of these services at a 20 to 30 percent lower fees.

However, the individual home health aide may not hold valid background checks, which you should do as a pre-caution. Moreover, they may not be able to arrange for an alternative on short notice if they are unable to come to work on a day.

Hourly Rates are so far the most common way of ascertaining the amount that a patient would pay to a home health agency. Senior patients who are usually independent and can carry out their daily activities, in most cases, may not require a caregiver for the entire day. Many senior patients only require caregivers for only two hours a day. In such situations, the cost of hiring a home health agency will not be extremely high.

This will, however, differ from agency to agency. You need to understand that different home health care agencies have a set number of working hours per day. The care will be provided by a licensed caregiver recruited by the agency. In most cases, the limit is somewhere between two and four hours. If the agency charges a daily rate, that will depend on the cost of living within the given region and the degree of specialized care that the patient requires.

The present state of revenue loss

However, the situation is not all glitzy for the home health care sector. The industry is currently missing out billions of dollars in revenue, especially from those patients who should ideally get home care after being discharged from the hospital, but never land up getting it. As per Excel Health, the loss of revenue from these patients is about 2.5 billion!

What’s worse, about 40 percent of patients who are recommended home care don’t get it. A communication gap between patients and the hospital team, insufficient understanding of home health care model, shortage of labor, and lack of follow-up are reasons enough for these patients to miss out on the service.


If you are starting a non-medical home health agency, then you should know that the business is not a short-cut to becoming rich. It is an excellent way to make a good income by helping senior citizens live healthily and independently, but you will have to know how much to charge them. No matter what, the rate you charge should justify the quality of the service you are offering.

Many senior caregivers begin as a solopreneur. Eventually, they expand by getting employees on board because of the surge in demand for their service. Many have built a million-dollar home health agency business in just a few years after starting. If you are dedicated enough, you will surely flourish greatly in the industry, despite the competition.