Home care agencies might want to think twice about how they handle workers who are chronically late to client visits.
“When we started Honor, we thought, clearly, if a care pro is late, that’s terrible,” Seth Sternberg, CEO of the San Francisco-based company, told Home Health Care News. “And then we learned that’s not true.”
That counterintuitive lesson about late workers came from analyzing data gathered through Honor’s proprietary technology platform.
About three years after launching, Honor now is looking closely at its data and adjusting operations accordingly, in a variety of ways. Sternberg recently spoke with HHCN about how data is improving efficiency while debunking some conventional home care wisdom. He also described how Honor plans to expand following its recent $50 million Series C funding round.
Better late than never
Sternberg brought a Silicon Valley mindset to home care when he started Honor; previously, he had co-founded and led a tech startup called Meebo, which was acquired by Google for a reported $100 million. With this as the background, Honor announced its intention to create a more efficient home care operation through purpose-built technology systems.
Although Honor does not disclose exactly how many care pros it employs or clients it serves, the company now has expanded to three states: California, Texas and New Mexico. As it has gained scale, Honor has started to make good on its intentions to drive better care through technology, according to Sternberg.
“We’re able to use our scale and advanced machine learning to constantly get better as we grow,” he said.
While he’s eager to share examples of the how the company is doing this, Sternberg is hesitant to use the term “machine learning.”
“There’s a really good cartoon that [says] statistics is not sexy, machine learning is okay, AI [artificial intelligence] is hot,” he said. “Anyone in the field will tell you they’re all the same thing. What you’re doing is finding patterns in massive amounts of data.”
One of these patterns relates to chronically late caregivers—a role that Honor has dubbed “care pro.” Some clients can’t abide care pros being even five minutes late, but other clients are happy with a particular care pro even if that person is consistently late. Honor would sometimes remove care pros who were habitually late, upsetting customers who did not mind the tardiness and liked the workers.
“Machine learning can help you learn which customers are okay with care pros being late versus not being okay,” Sternberg said, noting that the company is still trying to reduce late arrivals overall.
Another example of machine learning: Honor has learned that for every 15-mile increment that a care pro must travel to a client, that care pro becomes two times likelier to turn over. Yet, distance is not necessarily a deterrent in care pros accepting an assignment in the first place.
“Machine learning let us find out that even though a care pro in Vallejo might take a job in San Francisco, it’s extremely unlikely that that will produce a consistent relationship,” Sternberg said. “That’s about a 35-mile drive, so it’s got about a four-times likelihood of becoming not consistent.”
A third example relates to staffing on weekends, which is generally hard for home care providers across the board, Sternberg said. Conventional wisdom is that caregivers are at church or with their families on Saturdays and Sundays, and that’s why they’re less inclined to take shifts.
“With machine learning, you find that … the more difficult-to-serve customers, those who are harder to serve, are disproportionately likely to use Honor on weekends, and that’s the No. 1 driver of why weekends are harder to staff,” Sternberg said.
There are limits to machine learning—the data analysis can’t actually explain why this pattern exists on the weekends, for example. But there are plausible explanations, Sternberg said, such as that people who have very heavy lifting and transfer needs will require professional assistance seven days a week, while those with less intensive needs might have family to help them out on the weekends.
Gearing up for growth
While its commitment to a tech-forward approach has remained consistent, Honor has shifted its strategy in other ways since launching. Notably, it has been pursuing growth primarily by striking partnerships with existing home care providers.
When it raised its Series C in May, there were seven partners in its care network. That has now increased, Sternberg said, without disclosing the exact number. The partnership arrangements are meant to combine Honor’s operational efficiencies—achieved through scale and technology—with the local knowledge and connections of someone who has been embedded in a particular market and is trusted there.
The partner essentially is responsible for three things, Sternberg said. One is finding and winning customers. The partner also does the initial in-home consult—utilizing standardized Honor forms and processes—and then provides ongoing care management to make needed adjustments and ensure continued satisfaction.
For its part, Honor handles all operational logistics, including regulatory compliance, as well as assigning and managing care pros. Honor has a dedicated team of 15 people doing recruitment and screening of potential care pros. A separate team is focused on connecting customers with the same care pros on a consistent basis.
“Fundamentally, [our partners] get their lives back,” Sternberg said. “If a care pro calls off, the partner doesn’t even need to know about that … What the partners do extraordinarily well is be really deep in the community, understand its needs really well. The needs of people in North Dallas are different than those in North Richland Hills.”
Most of the current partners are private duty home care operators who have a passion and talent for care management, with many of them being social workers, he said. However, going forward, Honor is looking at partnerships with a range of different types of organizations, which could include hospital and health systems or senior living providers, such as assisted living communities.
So far, developing this type of network has proven a successful way to expand Honor while also benefiting its partners, who continue to receive a margin on the business and are finding it easier to grow, according to Sternberg.
“The partners who have been in the network for between four months and eight months are up an average of 30% as measured by revenue,” he said. “One of our partners who is an agency owner in Oakland is up literally two-times in eight months … [she] literally doubled her business.”
In terms of geographical expansion, Honor is focused on growing its footprint in existing markets, then a “second wave” of growth will involve entering new states later this year, Sternberg said.
Sternberg declined to share whether Honor currently is generating a positive cash flow from its operations or what the burn rate is for all the capital it has raised, but he said that growth is the priority.
“I specifically started Honor as a for-profit rather than a non-profit because I wanted something that could sustain itself, rather than always having to ask for donations,” he said. “When you raise venture dollars, there comes a point in a company’s build when you’re actually putting those dollars toward growing faster rather than sustaining operations. That’s something I don’t think people necessarily understand.”
Honor is not the only home care company to raise large amounts of venture capital in the last few years. As these startups have faced changes in labor laws and learned more about the ins-and-outs of home care, some have shut down while others have adjusted their strategies. Most recently, New York-based Hometeam went all-in on serving the Medicaid market, and its CEO and founder Josh Bruno stepped down.
Do not expect Sternberg to follow suit.
“We’ve found a way to partner with local businesses to relieve their burden, so they can do what they love with less pain,” he said. “I’m super happy doing that, and not going anywhere.”
Written by Tim Mullaney