Revenue for home health agencies is determined on a per-patient basis, influenced by various factors including the patient’s specific needs, the complexity of care required, the length of service provided, and the geographic location of the agency. For example, a patient requiring skilled nursing care for wound management will likely generate more revenue for the agency than a patient needing minimal assistance with personal care. Payment sources also play a significant role, with variations between Medicare, Medicaid, private insurance, and private pay arrangements.
Understanding agency revenue generation on a per-patient basis is critical for several reasons. This knowledge informs financial planning, resource allocation, and ultimately, the sustainability of the agency. It allows agencies to accurately assess the profitability of different service lines and adjust their operations accordingly. Historically, reimbursement models have evolved, shifting from cost-based reimbursement to prospective payment systems, necessitating a more nuanced understanding of per-patient revenue. This understanding also allows for benchmarking against other agencies and identifying areas for improvement in operational efficiency and cost management.
