For reasons beyond the coronavirus alone, 2020 was an unprecedented, action-packed year for home care operators. This year is guaranteed to bring more disruption as well, particularly as U.S. demographics continue to skew older and as the overall health care system looks to decentralize traditional models.
Omaha, Nebraska-based Right at Home — an international home care franchise system with roughly 500 domestic locations — is working to stay ahead of the curve.
In part, that means launching new service offerings to better target “boomer consumers,” a population that prefers to take charge of their aging-in-place strategy. It also means accelerating market development with a mix of de novos locations, new franchise openings and acquisitions.
To learn more about Right at Home’s 2020 and plans for 2021, Home Health Care News recently caught up with CEO and President Brian Petranick. Highlights from that conversation are below, edited for length and clarity.
HHCN: Can you start by briefly recapping Right at Home’s 2020, if that’s even possible after all the challenges you had to face?
Petranick: It was an interesting year. And this is a good time for this conversation, because I’ve been doing a bunch of reflection on 2020 over the last few weeks. I always get very reflective this time of year.
Let me start off by saying that I am incredibly proud of our team, including both our franchise system and our corporate-owned locations. I’m so proud of everybody, top to bottom in our network, in addition to our international partners. With COVID-19, we saw the real concern surface toward the end of February. Then all sudden, by March, it was like, “Oh my god! Here we are. We’ve got a potential pandemic on our hands.”
I’m sure every organization out there did some level of projecting, thinking about worst-case scenarios. We certainly did. And you know what? We never came close to that. We had about a six-week period of time where our business faced pretty significant losses. That was from March 1 to the middle of April. From that point on, we’ve been building back up and growing very steadily. We actually had a record level of volume across our system during the last week in February, right before the pandemic became “official.” We had our highest amount of volume in the domestic U.S. system — ever.
Well, we got back to that volume. We even exceeded those record numbers by September. We’ve been hanging around that all-time high, breaking records week after week. We’re on a pretty good trajectory here. But with that being said, we know infection rates shot up right after Thanksgiving and may rise again due to the winter holidays.
Again, I would say, in summation, that I’m incredibly proud of our year and our people. I’m proud of the way people responded. I know they’re tired. They’re fatigued. But they’re resilient. We’ve learned a lot about our team here at Right at Home, in terms of how we can respond to a crisis and how quickly we can make decisions. There are so many positives that have come out of this really awful year, at least from that standpoint.
How did Right at Home grow in terms of number of new territories or new locations?
We probably had a little bit lesser growth in that area than we’ve had in the past. Some of that is obviously due to the pandemic. But looking back on 2020, we are finishing up with a handful of — maybe about 10 — new operating territories. Some of those are corporate-owned, while some are new franchises that have opened.
What were the biggest challenges you had to navigate in 2020? I know you already mentioned fatigue, for example. There’s, of course, personal protective equipment (PPE) procurement.
I think it was broadly managing the volume and the speed of change in an efficient and effective manner. Early on, there was so much information flowing from different sources — PPE policies, infection protocols and more. We had to figure out, at the corporate level, how to get all of that information and filter it in a meaningful way to the people who are operating the local offices.
Our goal was to take that information and give our team the tools to act on it without having to think a whole lot. Instead of operators having to do their own extensive research, we wanted to say, “Hey, we’re here. This is what we know. This is what we’re learning. Here’s how you need to apply this in your business.”
There was a lot to decipher. But out of everything, I think we got the most questions about dealing with the Paycheck Protection Program (PPP) loan and PPE protocols. Understandably, there was also confusion about cities being shut down, with caregivers sometimes being in this murky area of “essential” or “non-essential.”
So much changed on a daily, even hourly basis. Ultimately, I think our biggest success was our ability to take all of that information and rapidly distribute it in a meaningful way, allowing our partners to focus on their caregivers and clients.
The debate around home care staff being “essential” from a regulation standpoint surprised me. Was that somewhat revealing to you? Seems like there’s a ton of advocacy left to do.
Exactly. I think, to some degree, it was eye-opening. But we’ve always known that some people, policymakers and insurance companies don’t truly understand what it is that we do. When policies are rushed out the door during a pandemic and you see that you’re not included in something important, it crystalizes that idea.
It’s good and bad. The bad is that it highlights how others view our industry at the moment. And the good is that we can more clearly see where there are opportunities to start open discussions about home care.
Listen, policymakers have been trying to figure it all out. They also need help. Right at Home — independently, as well as a part of the bigger coalition of the Home Care Association of America (HCAOA) and other advocacy groups — continues to get in front of policymakers to have those key conversations. That will benefit us, long term.
It’s going to be interesting to watch as policymakers and others start writing new policies and reimbursement schedules around shifting more care into the home. Do they really understand the dynamics of the home environment and all the different types of care delivery models?
How about two or three predictions for the new year. What do you expect for home care in 2021, maybe even looking beyond COVID-19?
None of this is probably going to be a surprise for you. But I would start by saying that we’re clearly on a path where there is just more change, more disruption coming. I’m talking about changes in the health care system, changes in U.S. demographics, changes to reimbursement models — all of those things. As we think about home care in 2021, we need to expect more change.
This acceleration to the pace of disruption is partly due to the pandemic. That isn’t doing anything to slow the changes down. But we’re also coming off of a presidential election. There could be some big philosophical changes coming into the White House. For as much as people want 2021 to be calm and a year where we get back to normal, there will be a lot to navigate. I think it’s going to be a lot like 2020, just in different ways.
With all that disruption will likewise come an increase to the level of sophistication within home care. Operators — independent home care providers and individuals who are part of a franchise system — will have to become more sophisticated in their approach to business. Wage pressures are increasing. Service costs are increasing costs. The traditional structures of health care are evolving, with more Medicare Advantage opportunities and new initiatives, including hospital-at-home programs. Operators will need to be overall more sophisticated to succeed.
What else? I would say — again, not shocking — there will be more collaboration between home health, home care and the broader health care sector. There’s just so much focus right now on bringing down the cost of care. The best way to do that is with stronger collaboration across the board.
A final prediction for 2021 is that the “boomer consumer” will take centerstage. We’re starting to deal a lot more with baby boomers — and they just have very, very different demands in regard to the care they want. They want to control that care and how they interact with their care providers. We should see a lot more focus on the boomer consumer outside of health care, too.
What’s an example of that? How is your “boomer consumer” different than the traditional home care consumer from a generation before?
It’s a great question. Some of this will probably be overly broad, but I think the generation before — the post-depression era, let’s say — was a generation that didn’t question their doctors. If a doctor said, “Here, this is what you need,” then they just did it. They were raised to listen to their doctors. That’s not the boomer generation or any other generation. They’re the WebMD generation, the Google generation. They’re used to going in and searching for answers on their own. And they’re used to getting what they want.
Boomers have had a lot of resources. They’re typically wealthy, as a group. They’re used to BMWs, Starbucks and those types of things. I think they’re going to expect more from their home care providers, more from all of their health care providers.
We’ve already seen some of that, right? If you look at the way hospitals were in the 80s and, to some degree, the 90s, you had to pay all kinds of money for a private room. Now, some of these hospitals are like hotels. You get a single room. You’re ordering off of menus. We’ve all got different expectations now.
We’ve already operationalized some of those changes, but there’s definitely more coming because we’re still on the leading edge of the baby boom generation. At the end of the day, they want more communication, more choice and a better experience.
How about two or three predictions for Right at Home? What specific goals or strategies did you have in mind for 2021?
You’ll definitely see from us more accelerated market development. I don’t think that’s a secret. At this point, everybody knows we’re opening up more corporate-owned locations, where we’re doing de novos. That means going into markets where we don’t have offices now and opening from scratch. We’re also growing through acquisition of independents in some of the markets where we’re interested in going. We’re still franchising. We’re just kind of agnostic to how we grow. But we want more market development. That’s No. 1.
No. 2, we’re thinking about all these changes that are happening in health care. We want to make sure we’re moving in the right direction. We want to make sure that we’re buttoned up on our data and thinking strategically about how we’re leveraging our data. We’re going to continue to put a lot of focus on our, like I talked about earlier, sophistication level. We know that we need to position ourselves best for working with the broader health care system and home health partners.
Lastly, we’re looking at all kinds of different ways to broaden our value proposition to our clients. That partly means hitting on what the boomer consumer wants. We’re not thinking about ourselves as just a home care company. How do we think broader? Where are there other opportunities to add to our own value proposition? There are some really interesting models out there that we’re looking at.
What do you mean by that?
Care coordination is an example. To use one analogy: Most people, when they build a custom home, they don’t do it themselves. You could hire a plumber. You could hire an electrician. You could hire a framer. You can hire all of those people individually. You can have somebody come in and put your foundation in and do your grading and all of that stuff. You don’t need the contractor.
But what the contractor does is make it easy. The contractor becomes the middleman and coordinates all of those other things. All you have to do, as the homeowner, is decide on design, your choice of your tile, your carpet, your paint. I think there’s going to be more of a demand for that type of service in home care.
If you think about it, there’s probably 5,000 different pieces of technology that somebody can bring into the home to help with the aging process. Well, who in their right mind has time to research 5,000 pieces of technology, from a consumer perspective? Or 50 home care companies? Or 20 transportation companies? I think there is an opportunity for somebody that can come in and help people manage the broader aging process, not just one aspect of it.
What else is important to touch on?
One of the things we have to be very, very cognizant of is the impact of COVID fatigue. I can’t stress that enough. We’ve had a strong year at Right at Home. I’m incredibly proud of our team. But we’re tired. People are just tired after operating at really, really high levels for nine or 10 months. COVID fatigue is real. It’s a challenge, but people are going to have to fight that off as best as they possibly can in 2021.