Honor Sees Senior Living Partnerships as Route to New Markets
Honor—part of a wave of tech-forward home care startups to raise large sums of capital in recent years—now is partnering with assisted living and other senior housing companies, and sees this is a potential way of entering new markets.
After starting in San Francisco and raising a cool $20 million in Series A funding in 2015, Honor expanded to Los Angeles in the spring of 2016. The L.A. market was attractive in part because of opportunities to partner with health systems there. The company soon recognized the potential to partner with all sorts of providers across the continuum of care, according to Nita Sommers, Honor’s chief strategy officer.
“We realized we were building unique capabilities around caregiver and back office management,” Sommers told Home Health Care News. “We thought, who else can benefit from that? That’s when we thought of assisted living, long-term care, rehab, you name it. Anyone in the continuum is an interesting candidate.”
Like other high-profile startups in the home care space, Honor has not disclosed much information about how much market share it has captured, and the company also is not saying how many of these new partnerships it has on the books, or what specific organizations it is working with. It is an “active program,” Sommers said.
Other home care companies also are partnering up with senior living providers, sometimes in “white label” or “private label” arrangements. One of these companies is CareLinx—another San Francisco-based outfit that uses technology to connect home caregivers and clients. After working out a revenue sharing agreement, the independent living or assisted living provider essentially can wrap its own brand around CareLinx’s services.
Honor’s arrangements work on a similar model. The company shares in the financials with its partners on the senior housing side, but it’s more of a co-branding approach, Sommers said.
In some instances, the senior living provider is strictly looking for a home care partner to come into its facilities to provide on-site care for residents, she said. In other cases, “a big part” of the partnership is extending home care services into the community. This could mean offering home care to people after their discharge from, say, an episode of short-term rehab. Or, it could mean that the senior living company wants to raise its profile in the community, to encourage a “feeder mechanism” of people who receive the co-branded in-home services first, then later move into the associated senior living community.
These types of partnerships benefit senior living companies in the form of greater visibility and a deeper referral stream, while they don’t have to actually learn how to successfully operate a home care business themselves. This can be difficult for a number of reasons, including that a provider of facility-based care might struggle to manage a mobile workforce, and that regulatory compliance around home care can be daunting for them, Sommers said.
The risk for senior living operators in partnering with a home care company is that they give up some control over caregiver management—and therefore have less control over quality outcomes. Companies like Honor—with robust technology to provide real-time information about what care is being provided, and when—can help ease these concerns and therefore might be more attractive partners than home care companies have been in the past, Sommers proposed.
So far, Honor is marketing itself to potential partners in a low-key way. It is proactively reaching out to some particular companies and floating its partnership model at conferences, Sommers said.
Honor has seen “a lot of interest” from senior living providers with “slightly larger scale,” she noted. And Honor would consider working with a senior living provider outside the California and Texas markets where it already offers home care.
“We’re willing to look at new markets, with the right partners,” Sommers said.
Written by Tim Mullaney