PE-Backed HouseWorks Using Innovation, Home-Modification to Propel Growth

After 20 years of serving the Boston area, private-pay in-home care company HouseWorks LLC recently expanded into the Philadelphia market. Expanded Medicare Advantage (MA) benefits, rising demand and private equity backing helped drive the strategic decision.

Company leaders say innovation — from its caregiver team structure to its home-modification arm — will help propel the agency into even more new markets in the years to come.

“My reason for doing [this] is as much about transforming aging and really making a difference in people’s lives as it is about growing the business in a significant way,” HouseWorks CEO Andrea Cohen told Home Health Care News.

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Since its inception in 1998, HouseWorks — which serves about 200 clients per day with about 350 caregivers — has considered innovation a pillar of its business. For example, the company was offering home care before it was widely recognized by the health care industry as a way to save billions and prevent hospital visits.

“When I first started the business, private home care was kind of the poor cousin on the ecosystem of care providers, where no one really noticed us, no one understood what our value was,” Cohen said. “That’s all changing now.”  

In 2018, the Centers for Medicare & Medicaid Services (CMS) announced that certain non-medical in-home care services and supports would be allowed as supplemental benefits for MA plans in 2019. Some plans have already started to act on those newfound flexibilities, with many more projected to do so in 2020 and 2021.

As part of the move, CMS also expanded its definition of “primarily health related” to allow supplemental benefits that make up for physical impairments, diminish the impact of injuries or reduce avoidable emergency room visits, further legitimizing non-medical home care as a valuable cost-saving intervention.

“The payers are finally understanding that private pay should be in the [health care] ecosystem because at the end of the day, we do provide a service that is going to save money in the long run,” Cohen said, identifying CMS’s decision as one of the catalysts that led to HouseWork’s expansion.

Another factor was demand.

By 2050, America’s 65-and-older population is projected to reach nearly 84 million — almost doubling in size from 2012 — according to the U.S. Census Bureau. Additionally, nine out of 10 Americans want to remain at home while they age, according to AARP.

Philadelphia County — where HouseWorks’ newly acquired Caring Friends Home Care is based — is not immune to the aging trends. About 13% of its population is made up of individuals 65 years old and over.

HouseWorks’ acquisition of Caring Friends Home Care — which focuses on caring for people with Alzheimer’s and other forms of dementia, an area in which HouseWorks is creating a specialty to differentiate itself in a highly fragmented industry — was made possible in part by private equity interest, a growing trend in the home care space.

RAB Ventures acquired a majority stake in HouseWorks LLC in February 2018, committing additional capital to accelerate growth. The deal also helped spark HouseWorks’ expansion from Boston into the suburban Metro West area in September.

Technology Transfer

After a booming 2018, HouseWorks plans to continue growing in 2019 and beyond.

“Now that we’ve made our first acquisition, we plan to make a couple more in the next year or so and a couple more after that,” Cohen said. “We’re also expanding organically as we did into Metro West. We want to expand close to us and now close to our Philly [location].”

In doing so, a large priority is making sure the HouseWorks’ brand isn’t diluted, she said.

“We feel like we have this huge opportunity and advantage being that we’ve operated for 20 years and we really know the business,” she said. “Now we’re taking a very experienced business and saying: How can we brand this — whether it be regionally or nationally —  and what is it we’re going to take with us to each market?”

Part of the answer is the company’s trademark pursuit of innovation designed to maximize customer service and experience.

One example is the company’s newly created operating structure, which it refers to as “pods.” The idea is that each client is assigned a network of office staff members and caregivers to make patients feel like they were surrounded by a team.

“What we’re going to do is transport that pod into every area of growth for us,” Cohen said. “Really what that is is about is supporting the client so that they can live their best lives.”

Other important transferable innovation priorities include caregiver training and technology adaptation.

Staffing shortages are among the biggest challenges facing home care companies today, with as many as 7.8 million unfilled caregiver jobs projected by 2026. In facing that labor pressures, HouseWorks — like many other home care companies — is investing in attracting and retaining top caregivers.

While the agency works to crack the staffing code, it’s trying several different methods — such as creating a training institute and helping caregivers get additional certification — with the main goal being to professionalize the job.

They’re looking at technology as one way to do that as well, among other things.

“We’re thinking about technology as a disrupter in every part of our business, so we have technology for caregivers, we are doing interesting training [for] dementia and we’re doing some interesting technology that’s going to let us capture data and reduce cost in the long run,” Cohen said.

HouseWorks is also exploring new tech to improve its home-modification business, an arm of the company Cohen believes will be important going forward.

Optimizing homes for aging in place — by making changes like putting in grab bars and removing trip risk — can minimize incidents such as falls, which are projected to kill thousands of older adults and cost nearly $60 billion by the year 2020.

“In order for people to be able to stay at home, it’s a bit of a triangle,” Cohen said. “You need good service, but you need to look at your environment because, as good as the services, if the environment for the client isn’t right, it’s not going to work. People are going to really look to home modification as increasingly important.”

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