Honor Partners with Catholic Charities, Takes on Caregivers
Consolidation is accelerating across the home care—and general health care—space. As many in-home care companies are getting snatched up in acquisitions by home health care providers, private equity groups or other entities, some organizations are seeking alternative routes to continue serving their patient population.
One such group is Catholic Charities of Santa Clara County in California, which recently partnered with home care startup Honor, based in San Francisco. Catholic Charities is a not-for-profit social services organization with 34 programs that offer services ranging from behavioral health, youth and family services, economic development, employment, housing, immigration legal services, in-home and long-term care, older adult services, and more.
Honor, which has raised $65 million in VC funding, is an in-home care provider known for its technology-forward approach.
Under the partnership, under the Honor Partner Network, Catholic Charities caregivers and services will fall to Honor.
Don’t duplicate, collaborate
Roughly 10 years ago, Catholic Charities saw a need in its community. Many clients utilizing some of its resources, such as refugee settlement services, needed work. In addition, seniors were in need of home care alongside the organization’s adult day care sites. From there sprung the home care agency, which has employed 122 staff in the last eight years of its operations.
“We wanted an opportunity for our clients who were looking for work to get trained and get placed as care professionals,” CEO Gregory Kepferle told Home Health Care News. “Analyzing the field, we saw that, for one, many of us are growing older and that there is a huge need for in-home care services along with adult day care services.”
However, providing stable work and growing the home care agency proved too tough for the not-for-profit, according to Kepferle, which led Catholic Charities to seek out an alternative option.
“We were the only non-profit in Santa Clara county,” Kepferle said. “Seeing Honor coming into the field with their technology really excited us. It’s a piece of the Social Innovation we are interested in. Rather than us duplicating or trying to compete, my philosophy is to collaborate where possible. Don’t duplicate, collaborate.”
Beyond adding technology, Catholic Charities was interested in improving opportunities for its caregivers, who have since transitioned to becomes “care pros” with Honor. Honor and Catholic Charities declined to state how many current caregivers are active with the company from Catholic Charities’s agency.
“There’s more consolidation within the caregiver field,” Kepferle said. “We were also seeing the need for increasing compensation. We’re more than a mom-and-pop organization, but definitely not in the for-profit end of the field. [We thought] better to collaborate with the for-profit.”
Under the terms of the partnership, no cash was exchanged for Honor to effectively take over the non-medical home care for Catholic Charities.
Instead, the organization has peace of mind its staff will have more opportunities for work.
“They ran into what is common—that it’s a challenging service line to run, with the operational complexity and managing the workforce,” Nita Sommers, president of enterprise at Honor, told HHCN. “It became something hard to sustainably run, but was an important service to provide the folks they work with, and they cared that these caregivers had continued access to job opportunities.”
The partnership is one such model within Honor’s Partner Network, which includes other agencies and health systems. In some of these partnerships Honor offers a different model, such as home care providers utilizing Honor’s technology platform and receiving help with back office management. Some of these agencies have seen growth since partnering with Honor, between 20% and 25% since December, Sommers said. Honor shares in the growth, though Sommers declined to say how the financial relationship works.
Partnering with a not-for-profit company was in line with the network’s aims.
“We’re open to working with anybody that needs help,” Sommers said.
However, not-for-profit agencies could be good partners as they seek out ways to stay afloat in the competitive home care space.
“I think it’s getting harder for organizations that do a lot of different post-acute services,” Sommers said. “They provide home health and nursing homes and skilled nursing. We find not-for-proft ones struggle to run their non-medical service line very well. It’s a different labor force, a different payer. We tend to find they struggle and therefore actually can’t leverage to their full potential.”
Written by Amy Baxter