Josh Bruno is preparing to step down as CEO of Hometeam, the New York-based home care startup that he founded. The company’s president, Matt Marcotte, also has left the company after a five-month stint, as Hometeam is shifting its business model.
Hometeam confirmed the executive shakeup to Home Health Care News on Friday, following an initial report from Recode.
Bruno is still serving in his position, but may be transitioned out of his role as an ongoing search for his successor concludes.
Marcotte, who was only appointed to the position in November 2017, left the company in February, according to his LinkedIn page.
Hometeam, which provides home care services in New York and New Jersey, raised more than $43 million over the last few years, including $5 million in backing from Kaiser Permanente Ventures. The company also has taken on $7.5 million of convertible debt financing, raised from its existing investors, Hometeam board member Bryan Sivak told HHCN.
The leadership change comes as Hometeam has shifted away from the private-pay market to rely exclusively on Medicaid-reimbursed business. It is seeking a chief executive with expertise to lead the company in an insurance-driven revenue model.
As of Friday afternoon, the company’s website still invited people to contact the company directly to arrange a caregiver, but this option will be removed, given the shift away from a direct-to-consumer business model, Sivak said. Currently, new clients are coming exclusively through Medicaid referrals.
The company began taking Medicaid patients two years ago, despite the fact that Medicaid rates generally are lower than private-pay rates for non-medical home care. However, there is a large Medicaid population in New York, which has moved to a managed care model for its long-term care care services. Hometeam contracts with all the major insurers in the New York City market, Bruno told HHCN in 2016.
A number of startups have entered the home care space in recent years, raising large sums of venture capital. They proclaimed their intention to transform the marketplace with a more tech-forward approach that would enable them to pay caregivers more while improving the customer experience. However, things have not gone entirely according to plan. One of these high-profile startups, Honor, has started to increasingly focus on growing through partnerships with other providers. And most dramatically, VC-backed HomeHero closed its doors last year.
Some industry heavyweights believe this class of new disrupters overlooks the personal side of home care in the face of technological innovations.
“Technology-driven home care companies that seek to disrupt the industry tend to run into challenges due to a lack of experience when it comes to the personal nature of the care provided,” Peter Ross, CEO of home care franchise company Senior Helpers, told HHCN on Friday. “Home care is a very attractive but complex industry—sometimes companies can get ahead of themselves before understanding the fundamentals of the service delivery.”
This was the case with HomeHero, which found that consumers did not embrace the process of selecting a caregiver through an online profile, but wanted a more high-touch process. HomeHero also could not weather a change in labor law, which forced the company to move from an independent contractor model to directly hiring its caregivers, drastically increasing costs.
Still, attempts at innovation in the space should not be discredited, Ross said.
“At the end of the day, the purpose of innovation is helping provide clients with the care that works best for them, and I commend those who work toward that goal,” he said.
While declining to compare Hometeam to HomeHero or share specific numbers, Sivak said that the company’s private-pay business model was “working well.”
“But from the perspective of the company and the board, [we] saw a broader and bigger and more important opportunity on the payor side,” he said.
The idea is that Hometeam can leverage its technology platform to deliver higher quality care while lowering costs, benefiting patients and Medicaid payors. Other home care companies are pursuing similar strategies as they seek to win more business from the growing managed care segment, but Sivak believes that Hometeam has the capability to excel at this difficult play.
“It’s really easy to say those words…we have built a team internally that is actually executing on it,” he said.
Hometeam has made “really great progress” in working with Medicaid payors but is not ready to share results or what metrics it is using to evaluate success; these will be forthcoming, Sivak said.
The company is also eyeing opportunities in the Medicare Advantage space, considering a recently finalized change that will allow these private insurers to offer non-skilled in-home services as a benefit starting in 2019.
However, it remains focused on its core markets and payor relationships for the time being. And despite the shift from private pay to being a Medicaid provider, Hometeam’s mission to transform the home care space remains the same, Sivak says.
“I don’t think that’s changed at all,” Sivak said. “Not only has it not changed, the opportunity to drive toward that goal is stronger in the Medicaid space. Our thesis is exactly the same.”
Others in the home care industry see the pivots to new business models in a different light.
“Honor, HomeTeam, and HomeHero were dismissive of home care agencies as they together raised over $100 million toward ‘Uber for home care’ models,” Geoffrey Nudd, CEO of home care technology platform ClearCare, told HHCN. “Ultimately they all pivoted and became home care agencies. None of these plays is working out. HomeHero shut down. HomeTeam is changing CEOs. Honor, after calling home care agencies ‘dinosaurs,’ is on its third pivot.”
ClearCare has raised $60 million in growth equity investment, and serves traditional home care providers on the non-medical private duty side.
Written by Tim Mullaney and Amy Baxter
