Why Home Care Disruptors Shouldn’t ‘Throw The Baby Out With The Bathwater’

Launched in May, Family Directed is the Louisville, Kentucky-based tech-enabled home care provider that’s breathing new life into HomeHero.

Co-founded with former Almost Family CEO William Yarmuth, Family Directed is building its business in the name of transparency, hoping to give home care clients more information about the care services they’re signing up for. Unlike other so-called “disruptors,” though, Family Directed isn’t solely focused on making waves.

Home Health Care News recently caught up with Family Directed President Kiel Dowlin to learn more about his company, plus its plans to partner with home care providers around the country through an enterprise model.

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Highlights of HHCN’s conversation with Dowlin are below, edited for length and clarity.

HHCN: I want to start by going over the nuts and bolts of your company. Tell me about your business.

Dowlin: We launched in early May 2019 with the assistance of some of the assets of HomeHero, which we acquired in 2018. Family Directed is a technology company. We operate two sides of the business.

The first is built on community caregivers across the country. This part of the business includes caregivers looking to work directly for consumers, as well as the technology that helps them do that.

We’re built under the notion that transparency is key to supporting success in non-clinical home care. Our tech solutions allow individuals to find a caregiver, interview them and then create schedules and care plans. Part of our mission is also to give consumers added insights into when somebody is on their way, when they’ve arrived and what they’ve done during a shift.

The other is our enterprise model.

You launched Family Directed with the support of a pretty well-known name in the home care space, correct?

Absolutely. William Yarmouth and I came together last year to create the company.

William, as I’m sure your listeners and readers are away of, was the former CEO of Almost Family, which last year merged with LHC Group (Nasdaq: LHCG) to create one of the largest home health and home care providers in the U.S.

This has been a great opportunity to work closely with William. Since our start, he’s helped us identify where the opportunities are. Having somebody with decades of experience helps us historically understand where home care agencies have either fallen down with their operations or maybe lacked a transparent experience for consumers.

Pairing my tech background with his industry knowledge has helped us find our sweet spot.

How many caregivers are currently in your network?

We currently have a little over 10,000 caregivers in our network nationwide, predominantly in about 10 different states. But we do see organic growth happening in other states outside of those key markets. Caregivers are looking for additional hours. They’re looking for new ways of working and creating businesses.

What makes Family Directed different than HomeHero? Why will you succeed when HomeHero failed?

That’s a great question.

Really, one of the biggest learnings from the HomeHero experience was that HomeHero operated as a DRA — Domestic Referral Agency — in the state of California. There are clear rules related to how a DRA can operate. HomeHero took a little bit of a liberal view and blended the lines between DRA and actual agency, thus getting into a pickle as to whether it was an agency that needed to be W-2.

The Family Directed model is quite different. We empower consumers to do everything. Instead of operating as an agency and intervening in between the two parties, we largely put the power in their hands. What that actually means is we aren’t doing anything on the back end.

At HomeHero, we were acting as the liaison between caregiver and client. At Family Directed, the technology allows clients to interview everyone, vet them. We make information readily available, but when it’s all said and done, it’s a direct relationship — not a DRA-type relationship.

At the end of the year, the 1099 or W-2 comes from the client, who chooses a household employee or contractor relationship.

So the consumer or client dictates terms of the caregiving relationship?

Exactly. And they choose the payment rate. We just provide support as the technology platform.

You had a role at HomeHero, right?

Yes. I was the VP of strategy and development.

When we spoke previously when you announced that Family Directed acquired HomeHero’s assets, you talked about the blood, sweat and tears you put into that business — and how it was nice to revive it. What does acquiring HomeHero’s assets do for Family Directed?

My HomeHero experience was great. We spent many years building new process flows and ways in which technology could create efficiencies at the agency level. When we looked at launching Family Directed, it became clear that we’d accelerate our development cycle and growth by going and basically acquiring the roadmap we had developed once before.

We acquired all of the technology assets, plus the branding of HomeHero.

Now, I’m not saying we didn’t have to start certain things from scratch at Family Directed. The way HomeHero was built was great for its purposes, but we wanted to build a technology platform that could be white-labeled and that was modular in nature.

There were certainly some deviations we had to make.

How does Family Directed make its money?

We make our money off of an administrative services fee that’s currently 10%. Regardless of whether you choose to hire a caregiver as a W-2 household employee or 1099 contractor, we charge an incremental 10%.

Has Family Directed raised any money? I know some of these tech-enabled home care companies have done fairly well in that regard.

We’ve taken a different approach. We’ve gone the family-office route. I think it’s really important in health care — and in home care, in particular — to have a long-term view of the market.

Our view is probably a seven-to-10 year time horizon with how this market is going to develop.

What stands out to me about Family Directed is your enterprise platform, which you briefly touched on. You’re actually partnering with home care agencies in some instances. Can you tell me a little bit more about that strategy?

This market has two types of clients. There is the client who wants to work with a home care agency and has the means to do so. Then there are clients who will never be home care agency customers — because they either do not have the means or they want to set up care themselves.

I think of those segments as very distinct.

The client who is looking for the lowest-cost provider likely isn’t ever going to be a client of an agency, generally speaking. We think here’s an opportunity to support agencies in providing great front-end engagement and experiences to help retain clients who do fall under their bucket.

If your technology helps keep track of when caregivers arrive and what services they provide before clocking out, it sounds like it can help with electronic-visit verification (EVV) compliance.

Absolutely. I like to think of ourselves as EVV-plus. Having validated clock-in, clock-out with GPS coordinates and signature capture at the end of a visit … that’s great. But we take it one step further, providing transparency to family members, too.

We’re trying to create something that really doesn’t exist right now in the industry in terms of transparency and keeping clients informed. A lack of transparency is one of the main reasons people get frustrated with home care.

I joke that I know more about my pizza delivery that I do about my home care experience.

What do you ultimately envision for Family Directed?

Our ultimate goal is to change the way in which families and consumers interact within the home care space. We want there to be a transparent experience for everyone sitting at the table.

And our view of this market isn’t just national — we’re really excited about international opportunities as well. We believe there are certain markets that have already adopted this self-directed model we can help support. I was most recently in Australia, for example, learning about opportunities there.

Fast forward 10 years, I hope we have hundreds of thousands of users using our mobile applications around the world.

We’ve heard repeatedly that the home care industry is ripe for disruption. Do you agree with that?

I don’t necessarily agree with that. I think disruption would indicate something is broken. I don’t think home care in the U.S. is broken — if anything, it works quite well.

I’m a big believer in iterative innovation versus disruptive innovation, especially in this space. I think there are ways we can provide small iterations to how the industry operates. Right now, we’re not saying, “Let’s throw the baby out with the bathwater and start over from scratch.”

I think that was the biggest issue with the technology entrants we were seeing five years ago.

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