Senior Helpers CEO ‘Bullish’ on Opportunities in 2017
With a new private equity partner on board, Senior Helpers is looking forward to a growth year in 2017.
New programs and entry into new markets should give Timonium, Maryland-based Senior Helpers, one of the nation’s largest home care franchise companies, an even larger footprint and more sway across the health care continuum, co-founder and CEO Peter Ross told Home Health Care News.
While ongoing workforce challenges and uncertainty over policies coming out of Washington, D.C., have home care providers on notice, Ross recently spoke to HHCN about why he remains “bullish” in the new year.
HHCN: Give us a quick year in review for Senior Helpers. What were some 2016 highlights?
Ross: It was another record year in 2016 for revenue and profitability. We brought on another 24 franchisees, and were up to around 284 around the end of 2016.
We also launched our Parkinson’s program. We started several years back trying to differentiate ourselves from what’s out there, and early on I latched on to disease management. I think this is going to be key going forward, with the Baby Boomers aging. We have a special training program for our caregivers and staff, so they can better understand [care needs] of clients with Parkinson’s. Like with our Gems [Alzheimer’s program], it gives us a dedicated focus and care plan that we can do for these families. We are very confident in it, having worked a lot with Johns Hopkins in developing the program. We can be a go-to home care company for Parkinson’s, just as for Alzheimer’s and dementia.
We also expanded into Canada, and now are in three countries.
Senior Helpers back in 2012 had taken on a capital partner in [Los Angeles-based] Levine Leichtman. They made a decision to exit their investment with Senior Helpers—very profitably, I would add—and almost four years to the day, we had another private equity partner take over for Levine, [New York City-based] Altaris Capital. We have a lot of opportunity to continue on focused growth as we move to the future, and I think the capital partner will help us with additional focus on where we need to go.
HHCN: What kind of growth specifically are you looking at for 2017?
Ross: We’re looking at rolling out another disease management program, probably COPD [chronic obstructive pulmonary disease]. We’re going to continue to expand in our franchise development, and look at some corporate acquisitions of independent home care companies in areas where we don’t have franchise locations sold. We now have access to the capital to do that. It’s an exciting time for us in that regard.
HHCN: What are some of the markets you’re looking at for expansion?
Ross: Some of the markets we’re looking at are Connecticut, Virginia, parts of Ohio. The sweet spot [for a company to acquire] would be between $3 million and $5 million in revenue, with a payor mix of [about] 90% private pay, 10% reimbursement. The [acquisition] would be rebranded as Senior Helpers, and we would divvy it out if there are clients that would overlap with a Senior Helpers franchisee. But we’re focused on states we’re not involved in at all, because some health care organizations—Medicare Advantage providers like Humana or UnitedHealth—want providers across the country.
HHCN: Do you see a big opportunity there, to partner with Medicare Advantage or with health systems, accountable care organizations (ACOs), and the like?
Ross: I believe home home plays an important role in the health care continuum. It brings so much benefit to the government, payors, the community, families, for people to age in place. Home care [provides] the lowest-cost option to do so, and 96% of seniors want to live out their life in their own home.
I think it’ll be interesting to see how CMS [the Centers for Medicare & Medicaid Services] and the new health department looks going forward, but we’re looking for opportunities to partner with hospitals, home health, health systems, to be the home care arm of managed care organizations (MCOs). We want to solidify home care being a part of that, and for Senior Helpers to have a seat at the table and not be on the menu. It’s a strategic focus for the industry as well.
I think you’ll see, in the future, CMS and others asking, how do we make some financial contribution through these ACOs and MCOs to reimburse good decisions? And a good decision would be to let people live at home.
That’s why we look at Senior Helpers as being a health care company. When we first started, I didn’t want to be part of the care continuum, now I see it as a great strategy. We may not be providing home health services, but the services we provide help someone live at home safely, take their medications, don’t fall, see their doctors. [But] how do we look at partnering? Everyone talked about [home care] being non-medical, non-skilled. It would drive me nuts that you would lead with two negatives.
HHCN: Are you finding that other parts of the care continuum see the value in home care these days and are receptive to partnering?
Ross: We’re finding that health care systems and hospitals and home health organizations understand what home care can do for them. What they’re trying to do is navigate the reimbursement waters. Where I don’t live in that environment, they’re immersed in it.
We’re looking at Medicare Advantage companies. We’ve had pretty receptive conversations with some of these organizations that see value in home care and want to build an aide into their plan benefit coverage. I think they’re waiting for some kind of grand poobah to begin laying out some groundwork on how does this all flow through. No question we’re getting a lot of interest from these MCOs and ACOs to play a part in that system.
We’re also seeing a lot of interest from hospitals. We have hospitals in some parts of the country reimburse us for home care. Some franchisees have been contracted to help by the hospital, for a short-term respite kind of arrangement, because [hospitals] are concerned about those readmissions. The light are now on in our industry, saying there’s a way home care can play a role here. I think that’s a good thing. But we’re in uncharted waters, especially with what’s going on in D.C. right now. We still think the insurance providers are looking for ways to figure this out, and Medicare has to figure out how to sustain itself.
HHCN: What about workforce issues? We routinely hear that this is the biggest challenge for providers these days.
Ross: I’m also president of the Home Care Association of America. I get a chance to see a lot of independents and competitors, or “frenemies,” on the board. I think if you asked anybody, the No. 1 issue is recruiting and staffing.
When I first started, finding family caregivers was pretty common. It was pretty easy to hire someone with some experience and train the in the Senior Helpers way. About four years ago, we knew that dynamic was going to change. In years past, we said, “Where are we going to get our clients?” Now we ask, “Where are we going to get our caregivers?”
We developed Centers of Excellence, with a built-in training lab with a bathroom, hoyer lift, a weighted [mannequin] to use in transfers, so you can actually come in and learn ADLs. We began teaching these skills from scratch. It helped us get ahead of that curve maybe more than others in the marketplace, and now we have a pipeline of caregivers.
HHCN: And on the wage front?
Ross: Senior Helpers has always paid more, because you have to get good caregivers. As we see the minimum wage go up, I see it as a good opportunity to create a better environment from a compensation perspective for caregivers. You have to balance that and make sure that what you’re charging is a fair, reasonable rate. Home care in almost all cases will be the least expensive option for families by quite a margin.
In states that have increased the minimum wage—and we’re in 41 states—when you look at where the rate is going, we do see that as a good thing for the industry, to create a career opportunity for people told o something they really spiritually want to do.
HHCN: What about competitive pressures? There have been some new entrants into the sector in recent years, that have come in with a tech-forward approach and a lot of venture capital behind them.
Ross: In the last couple years you’ve seen Honor, Hometeam, HomeHero … I’ve talked to all of them. I think everyone was worried that was going to be a tech disruption, and change how it’s done. But I’ve seen how they’ve had to change their model since then. They’re becoming employers, [directly] employing their caregivers. They’re still using tech to communicate with clients, but a lot of us were doing that already.
Now that Honor is converting itself to an employer model, they’re like us. Maybe they’re using tech a little better than we are. They might have some bells and whistles more than we do, but we feel confident that client acquisition is not an issue for us. We have great referral sources. In this industry, you’re dealing with people on the community level, where 81% of your clients come from referral and the rest from advertising or the Internet. That’s a lot of people coming from hospitals or from others who have had a family member in need and say, I know someone who can help you. That’s why you don’t see a Microsoft or Apple in this business.
I think Honor’s a good company, I like the people managing it, but I look at them like I look at Home Instead, or Maxim, or Bayada. Another competitor. I think Honor will do well over time, but they’re going to be just like us.
HHCN: If you can swap your Senior Helpers hat for your HCAOA hat for a minute, what do you see for 2017 as the association president?
Ross: I think under the new administration, there’s still a lot to be understood, but from what I’ve seen so far, there’s a lot of opportunity for our industry to be front and center. I think we’ll get really good support for home care tax credits as well as over misclassification of workers. That is, home care companies trying to contract workers, which we feel is illegal, as it doesn’t meet IRS standards for what an independent contractor is … [Overall, I’m] very bullish on what’s going on in the industry.
Written by Tim Mullaney