Top Home Care Predictions for 2022

The personal home care industry has received unprecedented recognition and praise over the last two years.

President Joe Biden and Vice President Kamala Harris explicitly mentioned home care – and home care workers – on the campaign trail and after inauguration.

“Just the fact that a sitting president is talking about home care is huge,” Vicki Hoak, the executive director of the Home Care Association of America (HCAOA), said during the Home Care Conference in December.

But it hasn’t just been the top politicians in the country bringing attention to the home care space. In fact, others have chosen actions, and not words, to show how much they value what the industry brings to the table.

Private equity firms and large health care systems – such as Advocate Aurora Health, which acquired the home care provider Seniors Helpers last year – have put significant capital behind some of the industry’s top providers.

Looking forward, there are a handful of factors that home care executives will need to key in on to not lose out on all the current opportunities. To help sort through those, Home Health Care News offers its top home care predictions for the coming 12 months below.

Curious what we predicted for last year? Revisit our 2021 predictions here.

HHCN published its home health predictions for 2022 in January.

Data will become increasingly important – and a great separator.

In 2019, on the brink of the pandemic, the Idaho-based market research and education firm Home Care Pulse released some troubling statistics on the state of data-tracking in the home care industry.

One example: 75% of agencies did not track readmission rates – at all.

Since then, there has undoubtedly been progress. But all progress is not equal. For instance, smaller agencies may have started tracking data for the first time, implementing something as simple as logging readmission rates through Excel spreadsheets.

But other agencies with extra capital – and more drive to begin partnerships with larger health plans and systems – have done far more.

For instance, BrightStar Care recently made what CEO Shelly Sun described as a “very large investment” into extracting data from its work. The company partnered with Avalere Health to conduct an analysis, which yielded various insights, including that BrightStar Care was saving “up to” $29,902 in total cost of care on a per patient basis.

Sun said the investment was well worth it because of what it would mean for future partnerships. BrightStar Care is working on hospital-at-home pilot programs with health systems already and looking to form even more partnerships with Medicare Advantage (MA) plans.

What this all will lead to is a bifurcation of the home care industry. More money to invest in data, along with better technology to track data and predict outcomes, could take the larger providers to another level and leave smaller providers – to a certain extent – behind.

Wage hikes could put home care providers in precarious positions.

It’s a near ubiquitous belief among home-based care providers that their workers deserve higher wages. The disconnect comes when the question of how to do that arises.

This disconnect is playing out in real time throughout the country and will likely continue to over the course of 2022. Part of what the brighter spotlight on home care brought, after all, was an increased recognition from policymakers and society at large that these workers were historically underpaid.

Bayada Home Health Care recently confirmed that it would be closing four of its personal care locations in Florida and laying off close to 700 employees in April due to “external factors.” Increased operational costs without increased reimbursement from Medicaid in the state, it seems, put Bayada in a tough position.

Meanwhile, the “Fair Pay For Home Care Act” has gained considerable steam in New York. The legislation, which would mandate wages for home care workers equal to at least 150% of applicable minimum wage laws, has been touted as a way to fix the worker shortage in the state.

But that’s a short-sighted view of the problem, some providers and advocacy organizations believe. Others, such as the New York State Association of Health Care Providers, support the state-level legislation.

“Our concern, and this is where we really diverge, is that whenever there have been these wage laws and requirements, the funding system has never actually followed through and compensated commensurate with what those obligations are,” Al Cardillo, the president and CEO of the Home Care Association of New York State (HCA-NYS), recently told HHCN.

On Jan. 1, 2022, minimum wages went up in 21 states, according to the Economic Policy Institute. The increases ranged from a $0.22 inflation adjustment in Michigan to a $1.50 per hour raise in Virginia, the equivalent of an annual increase ranging from $458 to $3,120 for a full-time, full-year minimum wage worker.

For private-pay providers, this is less of a concern – for now. As wages increase, naturally, the client cost in private pay will rise as well.

“We’ve always found ourselves in between trying to provide the best possible compensation for our employees at the lowest possible cost to the client,” Georgetown Home Care CEO John Bradshaw told HHCN last year. “But … those dynamics can get really out of whack.”

Many home care organizations have already had to raise their clients’ rates to help finance higher caregiver compensation. That includes some Griswold Home Care locations, though COO Steven Turner recently told HHCN the franchiser’s clients have been extremely understanding.

“We really haven’t had pushback on rate increases,” Turner explained at the Sales First Summit. “We’ve been forced to raise rates because we’re forced to pay materially more in some markets. At our national conference, I was doing an event, and I asked a whole bunch of owners, ‘How many of you have increased your rates in the last year?’ And every single person in the room raised their hand. I then said, ‘How many people have had pushback or complaints about it?’ No one raised their hand.”

Home care will have more representation on the public market.

It’s very likely the home care industry will have a new face representing it on the publicly traded market in the near-term future.

In June of last year, Bloomberg News reported that Help at Home was aiming to go public by the end of 2021. That did not come to fruition, but recent hires suggest that the move is coming soon.

Rounding out an almost completely new executive team, the company hired a new chief development officer in Rich Tinsley, along with Darren Lehrich as its new senior vice president of investor relations and finance. Lehrich has previously helped companies prepare for IPO filings.

But while Help at Home will likely have a stock ticker next to its name soon, don’t expect it to become a trend. While more home-based care companies are generally considering the private-to-public move, other home care companies are unlikely to follow.

After Aveanna (Nasdaq: AVAH) went public early on in 2021, BrightSpring Health Services filed the paperwork for a $100 million IPO. And though Help at Home should be next up, it’s more likely that it’ll be the one that caps off the wave of home-based care companies going public.

A few companies will blaze the trail for value-based care arrangements in home care.

Entering into value-based care and risk-sharing arrangements is not easy in home care. That’s partly because, unlike other types of senior care organizations, home care operators are often paid to keep a healthy person just that – healthy.

In these scenarios, re-hospitalization rates and “improvement scores” – two common value-based care KPIs – don’t always fit.

In some ways, the stars have to align: the right population to care for, in the right area, with the right two partners.

Nonetheless, home care providers recognize this as part of the future of health care, and thus, something they should be involved in. The companies that have dipped their toes in those waters will be the trailblazers, and everyone else will have the benefit of trying to follow their blueprints.

An example of this is the partnership between Anthem (NYSE: ANTM) and Care Advantage, which is a provider of personal care services in the Mid-Atlantic region.

Under the partnership, Care Advantage helps care for Anthem’s Medicaid long-term services and supports (LTSS) members in Virginia. While Care Advantage has been initially judged on just a few measures – such as ER usage, caregiver consistency and member satisfaction – it eventually wants to be exposed to all the risk that comes with caring for the population.

“It’s one gradual step,” Care Advantage CEO Tim Hanold previously told HHCN. “Then eventually, it’s about true value-based care, in which we want to share in risk and have skin in the game in regard to outcomes and members’ well-being.”

Another example is Addus’ (Nasdaq: ADUS) partnership with Presbyterian Health Plan, described as a “value-based post-acute care navigation agreement.”

Like the Care Advantage-Anthem partnership, it started with Addus taking on upside-only risk based on clinical measurements.

In due time, though, these providers – and many others that aren’t mentioned – want to have the ability to put their money where their mouth is.

Home care agencies will continue to face more regulatory hurdles.

A historically unregulated industry will have to grapple with more regulatory hurdles in 2022 than ever.

From Domestic Workers Bill of Rights policies, to standardization, to stronger unions, more regulation is undoubtedly coming.

Providers need to be cognizant, firstly, of the Domestic Workers Bill of Rights legislation, which is meant to extend workplace discrimination protections and establish wage standards. The legislation has not yet come to fruition, but will likely be resurfacing, Angelo Spinola, the co-chair of the home health and home care industry group at the law firm Polsinelli, recently told HHCN.

Along the same lines, unions – which have long fought to bring the mostly remote home care workforce together – have been emboldened by the COVID-19 pandemic. Legislation has been put forward in states like California, for example, that would allow home care workers’ contact information to become public, allowing access that’s critical to unionization.

While the idea of unionization in home care is complicated, and not a black-and-white proposition, unions would likely be at odds with providers in a slew of ways. Because unions have not been all that prevalent in the space in the past, new challenges will emerge.

Finally, there’s standardization. There are plenty of providers, especially the ones in states already standardized, that believe more broad-based regulation in the space would be beneficial.

Others operating in the 20 or so states that aren’t standardized may feel differently, however.

“Right now, every state does so differently. I think that’s a hindrance,” HCAOA’s Hoak told HHCN. “We want to talk about our industry across the country, but we really can’t because it’s so fragmented. You also can’t get data until you have standards for everyone to be on the same level.”