By Stephen Tweed
Did you participate in the 2023 Home Care Benchmarking Study at Home Care Pulse by submitting your data?
Have you received your copy of the 2023 Home Care Benchmarking Report?
Have you studied the report?
What did you learn about your company compared to industry benchmarks?
At Leading Home Care and the Home Care CEO Forum, we’ve worked closely with HCP for the past dozen years on the annual benchmarking study, and we’ve taken time to analyze the results each year. We received our copies of the report earlier this month, and I’ve been going through the data to see what trends I can see, and what I can learn from looking at those trends.
The year 2022 was very interesting compared to 2021. Here are some of the changed in the report that I think are significant:
- The annual revenue for the median sized company increased from $1,664,856 to $1,717,048, or 3.13%
- The Direct Cost of care declined from 62.2% of revenue to 61.3% of revenue, or 1.4%
- Net income from Operations improved from 7.2% of Revenue to 9.0% of revenue, or a whopping 25% increase.
- Hourly billing rates for a 4 hour shift increased from $29.00 to $32.00 or 10.3%
- The Average Lifetime value of a client decreased from $15,987 to $14,830 or 7.2%
- The Average Length of Service of a Home Care Client decreased from 12 months to 9 months, or another Whopping 25%
As we analyzed these data, we can see that Revenue is up, Direct Cost of Care is down, and Net Income is up significantly. The Lifetime Value of a Client and Length of Stay are down. What we have concluded is that the improvement in financial performance of the medium-sized home care company is mostly due to price increases.
Since caregiver recruiting and retention are hot topics for most home care company CEOs, we looked closely at the data in this section of the report.
- Caregiver turnover leaped upward from 64.9% to 77.1%, an increase of 18.8%
- 81.5% of companies responding to this survey turned down cases due to caregiver shortages
- Turnover of new hires recruited through an Employee Referral Program leaped upwards from 31.6% to 73.3%, or an increase of 132%
- Turnover of new hires recruited through Word of Mouth moved jumped from 23.4% to 64.5% for an increase of 176%
- Caregiver hiring conversions fell from 19.9% of applicants hired to 12.4% of applicants hired, or a decline of 37.7%
It is pretty clear from these data that the caregiver shortage has gotten worse for most home care companies from 2021 to 2022. The data show that 2022 was a very difficult year for the median sized home care company, and there are no signs that it is getting better any time soon.
So what can you do to address these data trends and improve the performance of your home care company?
How do Home Care CEO Mastermind Companies compare to the Industry Median?
One thing you can do is learn from your peers and join a Home Care Mastermind Group. Our benchmarking at the Home Care CEO Forum among our Mastermind Groups showed some very interesting data for our companies in the top tiers. We looked at the combined data of our Top 10% Mastermind, our Top 7% Mastermind, and our Top 5% Mastermind. Here’s what we learned:
- Annual revenue increased by 16.94 % from 2021 to 2022.
- Direct Cost of Care for these three groups was 61.41%
- Net Income from Operations was 15.17%
- The Average Length of Stay for a client was 33.86 months
- The Average Caregiver Turnover was 64.59%
It is clear from these data that the companies who participate in a top tier mastermind group outperformed the industry by significant margins. If you would like to find new ways to improve the performance of your home care company, you may want to explore becoming a member of a Home Care Mastermind Group. We have openings in our Top 10% Group, our Top 7% Group, and our Top 5% Group. If you are an independent home care company generating $3 million or more in annual revenue, then click on this link and learn more about the Home Care CEO Forum.