Anywhere from 13,000 to 18,000 agencies make up the highly fragmented home care market.
“Whatever the real number is, no one really knows,” Kunu Kaushal, founder and CEO of Senior Solutions Home Care, said last week at the Home Health Care News Home Care Conference.
A big chunk of that market belongs to agencies that are part of a corporation or franchise system. Another sizable portion is made up of the “independent home care operators,” which, in the past, have been “mom-and-pop businesses” that do about $1.5 million or less in annual revenue.
It’s this segment of independent agencies that’s currently in the midst of massive change, according to Kaushal, who in 2019 launched the Independent Home Care Alliance (IHCA). Part of the change includes fewer mom-and-pop agencies and more independent home care companies with scale.
“Twelve years ago, I found, there were really two categories: There were franchise models, then there were independents,” he said. “That has evolved, as we’ve seen home care really elevate overall as a business opportunity.”
An example of that idea, Kaushal’s Brentwood, Tennessee-based Senior Solutions has a census of 1,000 to 1,200 home care clients at its peak. In addition to traditional home care offerings, the company has recently started experimenting with meal-delivery services, transportation assistance, technology and more.
HouseWorks is another example of how independent home care providers of today are changing. Founded by Andrea Cohen over two decades ago, the Boston-based company operates across four states, though it’s “aggressively” growing larger with a focus on East Coast expansion, Cohen noted.
“When you penetrate a market, you have the ability to seize a lot of different opportunities,” she said at the Home Care Conference. “You can go really deep into that market. You can meet all the local players. You can innovate. You can be part of pilot programs.”
Innovation hubs
Senior Solutions and HouseWorks each reflect how more independent home care operators are becoming larger – and more sophisticated. Moving forward, Kaushal believes the segment of independents will look like an inverted bell curve, with very small agencies on one end, then very large providers on the other.
Apart from Senior Solutions and HouseWorks, some rapidly growing independent home care organizations include Family Resource Home Care, Arosa and several others. Family Resource Home care acquired two home care businesses in the middle of June, a few weeks before Arosa bought Family Staffing Solutions.
“The larger independents that are willing to scale with systems, people, talent, culture and a clear direction at a population, I think you’re going to start to see consolidation,” Kaushal continued. “And more de novo growth of those organizations.”
For years, home care companies like Seniors Solutions and HouseWorks have been viewed as innovation hubs. With full control of their operating models, Cohen and Kaushal have been able to stay nimble, testing new employment programs, payment avenues and approaches to senior care.
Indeed, independents have often filled a market need by experimenting with unproven concepts before the overall market adopts them.
“I would say we’re known as innovators,” Cohen said. “We thought a lot about technology before it was what you’re supposed to think about. We’ve thought a lot about how to support the caregiver, how to empower the caregiver and how to listen to the customer.”
As independents grow and become more professionalized, however, that “spirit of innovation” is sometimes difficult to hold on to, Kaushal said.
But to maintain its forward-looking approach, Senior Solutions has been working to innovate on basic “blocking and tackling,” he added. That means taking a hard look at home care’s impact on outcomes to strengthen relationships with private-pay clients, government agencies and other payer partners.
“For us, innovation isn’t necessarily new services and just finding a new product,” Kaushal said. “For us, innovation [means] driving value in our organization beyond how many hours of care you’re providing.”
Fitting in
The annual Home Care Benchmarking Study from Home Care Pulse helps define the segment of independent operators in the overall market.
In 2021, 849 providers representing 1,924 total locations participated in the Benchmarking Study. Of those, 51% were independently owned and operated providers that belonged to a franchise network, with less than 1% being corporate-owned franchise locations.
Just under 44% were independently owned and operated agencies not associated with a franchise network.
Increasingly, Medicare-certified home health agencies and health systems are launching home care service lines as well. So too are independent living facilities (ILFs) and assisted living facilities (ALFs) in the senior living space.
“I’ve been really interested to see some of the corporates get into the mix,” Kaushal said. “I’ve seen home health agencies that have tried to launch personal care. You see ILFs and ALFs that have tried to launch a personal care division all along the way.”
“It’s very interesting that everyone thinks it’s simple because it’s personal care,” he added. “Then they start doing it, and then they realize it’s very hard – to a point that they’re not always successful.”
Looking ahead, HouseWorks is looking to keep its spirit of innovation alive by doubling down on its unique service mix and technology, building upon its 2020 investments into eCaring. Helmed by CEO Michael Trigilio, the company additionally plans to push further into the Medicaid landscape.
HouseWorks got into the Medicaid business in November when it acquired Connected Home Care, a home care provider in Eastern Massachusetts that serves both Medicaid dual-eligible and private-pay clients.
“We’ve never done government-sponsored before. We made our first acquisition this year, actually,” Cohen said. “Part of it is [we] want to be able to be serving the more vulnerable populations.”
Meanwhile, Seniors Solutions also plans to continue investing in technology, especially solutions that improve operational efficiency. It also has value-based care in its crosshairs, Kaushal said.
“We want to be bold enough to go start talking to payers about doing more than having the market rate,” he said. “I think this value-based type of model from our side, we want to start pushing that agenda much harder.”
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