A few of us from Rosemark recently attended the annual leadership conference for the Home Care Association of America (HCAOA) in Anaheim, California. The conference brought together many leading home care agency owners, technology providers, and numerous innovative businesses that support the industry, and a lot of valuable information and discussion were shared by attendees. For those of you who couldn’t attend this year, we thought we would share some of the key industry insights we walked away with.
A prominent topic discussed during the conference was America’s rapidly aging population and what this means for the home care industry. Of the country’s 75 million Baby Boomers, on average, ten thousand of them now turn 65 every day. That’s 3,650,000 people per year that are reaching retirement age. Furthermore, this trend is expected to continue for at least the next 14 years.
Erik Madsen, COO of satisfaction management firm Home Care Pulse, described this point of industry growth with the term ‘10,000 pound elephant’, saying that the growth of home care in the U.S. is like an enormous elephant running down a path. Currently, we’re standing to the sides, throwing spears and rocks to try and take the elephant down. However, the companies that will be at the forefront of care in the coming decade are not standing on the sidelines just hoping to take the elephant down, rather they are farther down the path digging a deep pit for the elephant to fall into. They are preparing today, for what will inevitably happen tomorrow.
Organizational management solutions that help manage home care through automated collection of data, management of clients & caregivers, scheduling, and overall systems automation will be a vital part of these changes and influx in new clients.
Industry Insight #2 – Creative Strategies for Hiring and Retaining Quality Caregivers: A Necessity for Future Success
While demand for caregivers is already high, it is expected to increase substantially in the coming years due to the increased need for care. According to the Bureau of Labor Statistics, half a million new caregiver jobs will be created between now and 2024 – taking caregiver job totals from 1.8 million to 2.3 million nationwide. This demand will put pressure on home care agencies to be even more competitive with compensation and benefits to attract and retain quality caregivers. Practices put in place now to retain quality caregivers will pay off moving forward.
Industry Insight #3 – Home Care Provides Great Value
Home care is a necessity for many individuals and families. It fills the gap between traditional hospital care, assisted living facilities, and total independence for seniors. Home care allows for seniors to age and continue living their lives where they feel most comfortable – in their homes. Home care services can seem costly, however, when compared to assisted living facilities, home care is actually comparable. When compared to nursing homes (private room), home care can often be less than 50 percent of the annual cost. One major benefit that home care provides, along with being one of the most affordable methods of care, is the fact that it keeps seniors in their homes, while the alternatives require seniors to be relocated.
Home care has been shown to improve the health outcomes for seniors as well. A study referenced during the conference reported that seniors who used paid in-home care reported 25 percent fewer doctor visits per year versus similar-aged adults who did not receive home care services. Cost savings to the individual or family from hospital admittance is significant in this regard.
Insight #4 – Industry Disruptors and Threats
One of the most interesting, ableit gloomy, breakout sessions was presented by Scott Osborne, the managing principal of Osborne Home Care Group, LLC. This session, entitled ‘How to Combat the ‘Uberization’ of the Home Care Industry’ focused on the engineering threats and disruptions within the home care industry.
Since 2013, three notable startup companies in the home care sphere have received a lot of fanfare, and, more importantly, a lot of cash. Some are owned by large investment firms, and others privately, companies such as Honor, HomeTeam, and HomeHero are out to replace the owner/operator business model of home care. They’ve received a combined $120 million in funding. To understand this threat, we need to take a look at the millennial generation, and companies such as Uber, who have in a few short years virtually supplanted the taxi cab industry. As Baby Boomers age, their millennial generation of children will be taking responsibility for their care in many cases. Home care mega-corporations like the aforementioned trio look to be quicker, more interactive, and serviceable. Their growth will follow three steps:
- Get market share
- Grab valuation through market share (companies such as Uber were valued in the billions prior to even becoming profitable)
- Make their market share profitable
What they can’t do:
Home care is personal. Whenever I ride Uber around town or to the airport, which I do frequently, I’ve never had the same driver, nor have I cared about that fact. My relationship with my taxi driver is much less significant than the caregiver who is caring for my loved one on a daily basis. This business model of quickly receiving care that companies such as HomeTeam are trying to accomplish cannot strictly follow the ‘Uber’ route. This gives established home care agencies an edge. Building great relationships between the agency, the client, and the caregiver is something they can’t take away from you. I see these major companies as a threat, especially to small home care startups over the coming years. Identify your own tactics to defend your turf, and implement them to retain your market share.
I mentioned they were out to replace the owner/operator model for home care like Uber did with the traditional taxi company and dispatcher. This is true. However, what they can’t replace is the caregiver. If we can corner the caregiver market, this will again provide our locally-owned home care agencies with a substantial edge.
Join the Discussion:
Those were our thoughts on some of the main insights presented at the conference. What about you? Did you attend the conference? Have any thoughts on other things you found interesting or valuable?