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Long Term Healthcare Industry

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Long Term Healthcare Industry In order the cut the increasing healthcare costs, hospitals are working on the decrease of patients' stays at hospitals. As a consequence, the number of outpatient procedures and home nursing is increasing considerable as they avoid many of the costs associated with facility-based care, so they are much cheaper. * Home care accounts for over $40bn of the $1.3 trillion healthcare industry. (National Center for Health Statistics, 2002) * The home health agency industry struggled after the Balanced Budget Act in 1997 in the US, under the interim payment system. But the new prospective payment system, appears to be a great improvement and has encouraged providers to streamline operations and efficiently deliver services, offering high opportunities for key players in the long term healthcare market. (CMS, 2002) * Healthcare reforms throughout Europe over the last decade have resulted in a decline in average in-patient stay time and a decline in the number of hospital beds, leading to a shift away from the traditional hospital setting towards alternative care sites, such as long stay environments and the patient's home. (Frost & Sullivan, December 2001) * Medtrade 2002, addressed to the home healthcare industry (the biggest in this sector) had some 1,000 exhibitors and nearly 21,000 attendants. Key main trends are: 1. Demographics: Over 65 years old population, which represents the immense majority of people requiring long term healthcare, is rising extraordinarily - it is expected to double within the next 20 years in Western countries. 2. Costs Reduction: governments worldwide are trying to reduce rising costs in healthcare to make it more efficient and cope with extra demand. Over the last decade the trend has been to limit expensive stays in hospital and promote long term care solutions for patients and elderly - much cheaper. 3. Technology: Advances in technology (i.e. in equipment and in technology) are allowing ever more the possibility of healthcare at home with therapists visiting patients at their home from time to time. ...read more.


These services include instructing patients about the proper use of equipment, monitoring equipment and the delivery of medication. * Chronic Obstructive pulmonary diseases represent the fourth leading cause of death in the US - some 110,000 deaths annually. (American Lung Association) * Health care direct expenditures in 2000 related to chronic obstructive pulmonary diseases were approximately $14.7bn in the US. (National Heart Lung and Blood Institute) * The US domestic home respiratory therapy market is growing at a rate of 7-8% annually. (Merrill Lynch, 2002) * The UK respiratory therapy products had sales of $566m in 1999. (Clinica Reports, February 2001) * Home respiratory therapy industry in the US is very fragmented - more than 2,000 local providers. (CMS, 2002) Trends * Medicare spending for oxygen is rising following the Balanced Budget Act of 1997 in the US. (CMS, 200) * Spending for oxygen increased by 9% from 1999 to 2000 and has stabilized in 2001. (CMS, 200) INFUSION THERAPY EQUIPMENT AND SERVICES Standard, orally ingested medication does not often effectively treat conditions such as cancer, gastrointestinal diseases, congestive heart failure and immune disorders and thus, physicians very often prescribe infusion therapy for these ailments. Infustion therapies include the intravenous administration of life-sustaining nutrients, chemotherapy, which is the intravenous administration of medications to patients with various types of cancer, and the infusion of antibiotics directly into the patient's bloodstream. Infusion therapy equipment can be used in both long-term care facilities and homes. When used in homes, the therapy includes pharmacist services and related medical equipment and supplies, for the administration to patients in the home setting. * The segment, within the homecare market, that is expected to grow the most is infusion therapy devices as ambulatory care often consists of some kind of intravenous infusion. (Frost & Sullivan, December 2001) * The home infusion therapy market posted 10% to 11% growth in recent years and is expected to continue at that pace through 2006. ...read more.


(SMG Marketing Group, 2002) * The largest publicly-traded company in the home healthcare business is Gentiva Health Services, which attained $730m of its revenue from its home health business in 2001 (approximately 2-3% of the HHA market). (CMS) Some suppliers to long-term/home healthcare facilities and services: Company Service/Product Revenue Q3- 2002 Revenue Q3 - 2001 Growth 1 Accredo Pharmacy distribution to people with chronic health conditions $321.8m $122.3m 62% 2 Chronimed Pharmacy distribution to people with chronic health conditions $99.9m $93.4m 6.5% 3 Apria Home Respiratory and Infusion Services $312.0m $284.0m 11.5% 4 Lincare Holdings Home Respiratory and Infusion Services $244.2m $206.8m 15.3% 5 Dynacq International Home infusion healthcare services $16.4m $12.3m 25% 6 Omnicare Pharmaceutical Care $657.3m $541.2m 17.7% * As per the table above, these companies have seen a massive growth in revenue in the last year, reinforcing the strength of this industry. Some therapeutic pharmaceutical products providers: Company Service/Product Revenue Q3- 2002 Revenue Q3 - 2001 Growth 1 Pfizer Pharmaceutical products $8,725.0m $7,898.0 9.5% 2 GlaxoSmithKline Pharmaceutical products $7,744.0m $7,355.0m 5% 3 Bayer Pharmaceutical products $7,211m $6,757 6.3% 4 Pharmacia Pharmaceutical products $3,579m $3,684m (2.9%) 5 Baxter Pharmaceutical products and other $2,102.0m $1,900m 9.6% 6 Eli Lilly Pharmaceutical products $2,785.6m $2,828m (1.5%) 7 Novo Nordisk Pharmaceutical products $857m $815m 4.9% * Average growth since September 2001 in the top 7 pharmaceutical manufacturers was 4.4%. Some providers of long-term / home healthcare: Company Service/Product Revenue Q3- 2002 Revenue Q3 - 2001 Growth 1 American Retirement Corporation US senior living and healthcare services $85.5m 66.1m 22.7% 2 Manor Care Oparator of long-term care centers in the US $732.9m $687.6m 6.2% 3 Kindred Healthcare Healthcare Services $859.7m $789.6m 8.2% 4 Amedisys Multi-regional home healthcare $33.1m 29.7m 10.3% 5 Almost Family Alternative care services for seniors $21.9m - (new company) - 6 RehabCare Group Temporary healthcare $142.7m $140.4m 1.6% * These organizations have also seen strong growth in revenues during the last year. 3 ...read more.

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