Study: Indiana's home health care industry grew at a slow, steady rate

Topic: Miller College of Business

January 25, 2012

The home health care industry in Indiana grew at a slow but steady rate in the last decade and should continue to steadily expand in the coming years due to increasing number of aging baby boomers, says a new report from Ball State University.

"Home Health Care: Industry Growth in Indiana," a report sponsored by the Indiana Association for Home & Hospice Care and performed by Ball State's Center for Business and Economic Research (CBER), found that the medical service sector accounted for 14,219 jobs in 2009, ranking 22nd among U.S. states. The total was an increase of 30.7 percent as compared to 2000.

Over the same time period, Indiana saw a 29.5 percent expansion of home health care establishments, ranking 20th nationally with 391 facilities. Texas has the most employees (179,628) and establishments (3,244). New York, California, Florida and Ohio round out the top five.

The home health care industry in every state in the country is experiencing a boom with a growing demand for services as the country ages, said CBER director Michael Hicks, an economics professor who co-authored the study with Srikant Devaraj, CBER's senior research associate and project manager, and Rohit Ravula, graduate assistant. CBER is the research arm of the Miller College of Business.

"As baby boomers, who were born between 1946 and 1964, move into retirement in large numbers, there will be a sharp increase in the need for health care and social assistance services," he said. "The industry will continue to expand because while many retirees will not be able to do all activities independently, most will still prefer to live at home, understanding they'll need some sort of assistance."

CBER's research team analyzed the state's home health care industry from 2000 to 2009. The sector includes in-home skilled nursing services, counseling services, personal care services, physical, speech, occupation and vocational therapy, homemaker and companion services, medical equipment supplies and social services, drugs and medication, dietary nutritional services and audiology.

The study found:

  • The home health care industry had a total economic output of $1.3 billion in Indiana with $805.1 million in the health care and social assistance sector alone.
  • Despite the recession, this sector has experienced stability in terms of number of jobs from 2000 to 2009 with very few peaks and troughs.
  • Marion County tops the list with 2,772 jobs and 69 establishments in 2009, followed by Lake County (1,664 jobs and 51 establishments) and Allen County (1,271 jobs and 31 establishments).
  • In 2000, 48.5 percent of establishments had less than 20 employees and 27.1 percent had 20 to 49 employees, but in 2009, 44.8 percent had less than 20 employees and 34 percent had 20 to 49 employees.
  • Home health care aides in Indiana currently rank 14th in terms of hourly compensation of health care support occupations with the average hourly wages of $10.10 and an average annual income of $21,030.
  • The average hourly pay for most health care support occupations is $12.50 with an average annual income of $25,890.
  • The highest paid hourly home health care aides were found in the Muncie area, with an average of $11.01 per hour and $22,910 per year.

Hicks believes the home health care industry will continue to experience increasing demand of quality services from elderly, sick and disabled people in future, since it is a low-cost alternative compared to hospitals and nursing homes.

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