Medical Agencies

Medical Agencies Global Market Outlook:

MARKET OVERVIEW

Global Medical agencies market: $243.8 Billion

Global Demand CAGR: ~8-10 percent (2020-2024F)

• The current healthcare agency market is expected to grow at a higher rate, owing to the increased homecare needs and is expected to further shoot up be 8 to 10 percent

• The clinical trial market is expected to observe the emergence of a large number of proficient staff, which will be coupled with more customers who will opt for in-home care provided by medical agencies

• The home healthcare market will be more inclined towards skilled and professional care rather than the non-skilled one. So, care will get more specialized and clinical compared to the current scenario

Cost Structure of Medical Agencies

• Labor cost contributes a maximum of 65-70 percent of the overall agency base price, and comprises of direct cost (direct payroll cost) and indirect cost (third-party engagement cost). Labor cost differs widely, depending on the scope of the trials, location and the therapeutic area involved (e.g., an average homecare nurse earns depending upon the location and therapeutic area).

Sourcing Practices : Medical Agencies

• Companies use the following models for sourcing healthcare home services either working with in-home clinical research companies directly, which then centrally manages all home nurses or by outsourcing to a CRO.

• The pricing depends on the company type with both fee for service and hourly rate being prevalent equally.

• Project based engagements with the preferred suppliers is the most common model adopted in the industry. Contract is usually for six months as each project requires specific protocol and skillset.

• Medical agencies do not have Standard Operating Procedures for clinical trial home visits or training in GCP. Their employment screening practices vary and they commonly have no experience in clinical research.

• This creates an extra layer of administration and risk in the quality of the delivery of home visits and the accuracy in the completion of source documentation.

• Home health agencies pay their nurses a determined amount per visit. However, some home health nurses receive a set salary and schedule a certain number of visits per week. In many cases, home health agencies don't set the rates; private insurance companies and government agencies, such as Medicare and Medicaid, set the rates.

• The home health agencies do determine how the nurses are paid: per visit, per hour, or salaried. When a nurse is salaried, the level of care is not factored into the wage. Nurses who work as independent contractors can set their own rates.

Porter's Analysis on Medical Agencies

Supplier Power

• Supplier power is medium to high, owing to the extensive network the agencies have and develop contacts with in order to manage multiple country services

Barriers to New Entrants

• Regulatory barriers in terms of home care services and at home devices is more stringent in some regions

• Collaborations with top transport suppliers with high tech support might be heavily priced

Intensity of Rivalry

• Intensity of rivalry is medium, as the agencies providing services are more in number and the one with higher networks win the race

Threat of Substitutes

• Threat of substitutes is medium, as there are lot of small agencies with a network of suppliers for homecare support and also database management collaborations

Buyer Power

• Buyers have a medium power in negotiation, in terms of skilled nurse availability and delivery timelines

• Owing to the increased need of home care services buyers have a tough time with the service price negotiations