AAHomecare Measures Financial Performance

HME providers’ overall profits have increased by 11 percent on average since last year, according to the results of the American Association for Homecare’s 2003 Financial Performance Survey. This and other survey findings indicate that these businesses are operating with a higher degree of professionalism, according to Dr. William Cron, professor of marketing at Texas Christian University, Fort Worth, Texas, who presented an overview of the industry’s financial performance for show attendees.

For the 120 companies surveyed, findings include:

• In 2002, pre-tax profits for the participating businesses totaled 6 percent; return on assets equaled 11.4 percent; and return on equity was 18.2 percent.
• Twenty (20) percent of responding businesses grew at a plus-rate of 20 percent from 2001 to 2002.
• Thirty (30) percent of the businesses earned less than $3 million; 28 percent earned between $3 million and just below $5 million; 24 percent earned $5 million to $10 million; and 18 percent earned more than $10 million.

Forty-two (42) percent of the respondents represent respiratory providers, and respiratory products made up 51 percent of the surveyed companies’ product mix. Cron noted a broad-based offering of sleep-disordered breathing services in the marketplace. “I’m surprised with the [sleep-disordered breathing] results,” Cron said. “It is a big business.”