A couple of weeks ago, I went to Las Vegas, I had the privilege to attend the National Private Duty Conference expertly put together by Decision Health. I was there to speak on the necessary HR Systems to be an employer of Choice. I also wanted to immerse myself in the latest trends in home care and be exposed to the best minds in the industry. And the conference didn’t disappoint!
Derek Jones of ClearCare, one of many software companies competing in the homecare sector, gave a compelling presentation on the trends affecting the homecare industry.
Homecare is not yet recognized as a player in the healthcare ecosystem. However, homecare has a compelling case to make with the lowest hourly rate in the continuum of care. Considering that the majority of CMS spending is now value-based purchasing, the homecare industry must toot its own horn and raise its profile as a necessary partner in the continuum of care for seniors.
Having reliable data is key to get a seat at the table of value-based healthcare decisions. ClearCare is currently working with partners such as Harvard University and Right At Home franchise to collect such data. Preliminary results are available here and demonstrate the value of homecare to avoid costly hospitalization.
Derek also encouraged traditional homecare agencies to learn from new entrants to the industry. Those are what he calls “tech first” agencies. In 2006, Care.com was the first to introduce a website to connect caregivers and families looking for care. Since then HomeHero, Honor, Kindly Care, Home Team, Envoy have also entered the homecare space. Like many tech-based companies, these new players disrupt traditional markets by levering technology and capture a share of the market without concern for profitability.
Currently confined to specific urban markets (California, Texas, Philadelphia area and North East corridor), these companies recognize that homecare is a growth sector and there is money to be made. Large investors see the opportunity and provide funding. That’s good news for the industry. The large investments in homecare raise the profile of the industry in the business world and generate public relation buzz for the issues associated with aging.
“Client first” homecare should not fear the competition of “tech first” providers but rather observe and learn from them. As the demand for homecare services grows, traditional agencies should consider the following strategies to grow and thrive:
- Differentiate your services. Become a broker of service providers for seniors aging in place. Derek mentioned transportation services, doctor’s visits through telemedicine (“doctor on demand”), and extra curriculum activities (singing, cooking).
- Price your services right. Agencies priced at the 20th to 40th percentile of their market have the highest rate of growth. Do you know how your agency is priced relative to its competitors? ClearCare has benchmark data that could help you determine your positioning.
- Find dollars for veteran care. The Aid & Attendance program offers up to $2,000 a month in homecare reimbursement for qualified veterans. However, it is a bureaucratic challenge and it can take up to 9 months to activate. Partner with others who have done it before.
And by the way, “tech first” providers charge a premium for care so “client first” agencies have a good competitive stand in addition to their deep roots in their local markets.
