Home care franchise giant Seniors Helpers entered this year with big ambitions, partly fueled by its April 2021 acquisition by Advocate Aurora Enterprises.
Those ambitions include new data initiatives to take the international home care provider to the next level, as well as staffing investments to help win the workforce battle, according to co-founder and CEO Peter Ross.
For our latest episode of “Disrupt,” Home Health Care News caught up with Ross to learn more about Senior Helpers’ plans in 2022 and its relationship with Advocate. During the conversation, Ross also shared his thoughts on home care M&A activity and staffing challenges.
Highlights from the conversation are below, edited for length and clarity.
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HHCN: It has been a while since we’ve last caught up. How has everything been going for you and for Senior Helpers so far in 2022?
Ross: It’s been a great year. And we had a phenomenal 2021. This year, we’re off to another great start. We have noticed, going back to the pandemic and the early 2022 challenge with Omicron, that we’ve had more staffing challenges than we’re used to. But it seems to be kind of leveling off at this point.
And when I talk about staffing challenges, I really mean caregivers who get sick. Obviously we don’t want them out with a family until after they’re out of quarantine. We’ve noticed that a little bit this year. But other than that, demand is at the highest it’s ever been, and we’re feeling really good about 2022.
I know that staffing generally has been the main focus for everybody last year and this year. Is that currently your biggest focus as Senior Helpers’ CEO? What’s on your radar right now?
Staffing is certainly one of the biggest things we’re talking about every day. I look at every day — I’m also the chief marketing officer — applications. We last year generated 170,000 caregiver applicants through our marketing fund purchases for applicants across the system.
We really focus on obviously getting applicants, but the other thing we have been focusing on is retention — retention and utilization. We find that turnover among caregivers is probably as big a challenge as it is with getting caregivers. And we do an extensive training program for all of our caregivers. Getting someone hired, getting them trained and getting them out in the field, and then to lose them, is really even a bigger issue than sometimes not getting them at all.
Has Senior Helpers calculated the cost of losing a caregiver? I know that there have been some studies suggesting it’s thousands of dollars every time a caregiver leaves.
We know that the cost to acquire caregivers can run anywhere from, going by industry averages, $500 to $600. We had a pretty effective program last year. That’s just recruiting somebody.
Then you’re putting in 20, 30, 40 hours of training, and you’re paying them for the training before finally getting them up to speed. So I would agree with that. I think it is in the thousands. That’s why we’re really focusing with our system, our franchisees and our corporate locations on, “What can we do to better retain caregivers?”
We’ve been fortunate to be a Great Place to Work the last three years, from Fortune Magazine. We try to do what we can to cut down on the turnover as much as we can. But I think it’s more than that. There are widespread supply issues. I think all industries are saying, “We’ve got to find better ways to make employees’ lives awesome so they don’t want to leave.”
What does the overall Senior Helpers’ footprint look like today? We’re speaking here in the middle of February 2022.
We’ve grown quite a bit. We’re over 360 locations in 44 states, Australia and Canada. We continue to add between 25 and 35 new locations and new franchisees each year. And we continue to show some tremendous results with each of our franchise offices. How they’re growing, it’s been amazing throughout the pandemic.
I know you’ve always been a big proponent of upskilling workers, creating career opportunities for caregivers. That’s a huge topic of conversation right now. Have you seen those investments pay off?
We have. For example, we invested into a program we call “The Center of Excellence.” Basically, it’s a set-up within each of our offices that allows us to train caregivers who have never been caregivers before.
When I started Seniors Helpers back in 2002 and when we were starting to grow the franchise in the mid-2000s, there was never an issue of finding people who had experience. But now that’s not the case. You have to go out and create great caregivers, and The Center of Excellence allows us to simulate what it’s like to be in the home.
That’s helped us out a great deal to provide the right atmosphere. Caregivers get very frustrated when they don’t know how to do something. Every caregiver wants to make a difference. But they want to have the tools to be able to do it. They want to be able to have the training to be able to do it. We’ve invested heavily in that.
We’ve got to find a way to make home care and personal care companies employers of choice. Home care needs to be a destination. You’ve got to find ways of making your benefit programs better. You’ve got to find ways of respecting caregivers and what they’re doing. You’ve got to pay fairly and provide incentives. You’ve got to create career ladders for employees. We, for example, do specialized training on dementia. We do training on Parkinson’s. We do training on all chronic care management.
You mentioned how in the past, you would recruit from that pool of experienced caregivers. Maybe today, you don’t have that luxury. Are there other labor pools that you’re tapping into now that maybe you haven’t in the past?
Well, I think we’re certainly going after a different age demographic. If you looked at caregiving in the past, most caregivers were 45 to 65. About 90% were female. You just can’t hit the workforce demands by focusing on that kind of age demographic and pool. We’ve gone after millennials. We’re boosting awareness in high schools and community colleges. We’ve gone after hospitality workers. We’ve gone after fast-food workers.
We’re going after those people and saying, “Have a career that’s truly making a difference.” And I’m not shooting down hospitality or restaurants here. I do happen to like those, too. But I think with senior care, people feel like it’s almost a mission-driven kind of business. I always tell people that Senior Helpers is a mission-driven for-profit business. We are really trying to make a difference out there in people’s lives. We’re trying to enable aging in place.
What issue isn’t getting enough attention right now among home care operators?
For many years, home care and personal care haven’t been data driven. We’re not Medicare-reimbursed. We don’t have star ratings. We don’t have the outcomes or claims information that you get when you’re dealing with the U.S. Centers for Medicare & Medicaid Services (CMS) all the time.
That’s one of the things that I started looking at years ago. We came up with our LIFE profile assessment tool, which gives us the ability to create an “autonomy score” for whether seniors can live out their life in their homes safely. What are the chances of them being readmitted to the hospital? We need to keep seniors out of the hospital, out of the ER. Good things don’t happen there.
What we’re finding is that getting the data to go to the payers, to go to the Medicare Advantage plans, which are now beginning to reimburse for personal care services, is important. Use data to inform CMS. I met with a CMS director as part of a Healthcare Leadership Council call a couple months ago. I was asking questions, but also showing proof of, “Hey, this is what we do. This is how we can help prevent falls. We make sure to have seniors’ medications. We keep them out of the ER or the hospital. This is what we can save downstream, as far health care costs.”
What isn’t getting enough attention? Data, data, data. It’s one of those things this industry hasn’t had to do much with, but we’ll be doing a lot more with it in the future.
When you talk about leveraging data, in your conversations with prospective payer partners, are they most interested in the outcomes data? Or do they also care about things like the number of missed visits or call-off time?
I think it’s more the first part. We care a lot about the second one. We probably don’t tell them a lot about the second part because we try to fill those shifts when there is a call-out.
If you’re dealing with a health system, the most expensive cost to Medicare is a hospital visit. You have to find a way to keep the hospitalizations down as much as you can. I think they want to hear about that. What we also like to talk about, though, is the satisfaction with the client. How happy are they? What’s the quality of care?
I’ve always been curious about this area. When I first got into the business, people talked about reimbursement and compliance. Where’s the patient?
I think 21 or 22 states have increased their minimum wage in 2022. But then even beyond that, just to help with recruiting and retention, I know a lot of home care operators increased caregiver wages. There are also just higher operating expenses. All of that has factored into cost of care increases. According to one survey, the cost of homemaker services increased by 10.4% in 2021. What does cost of care look like for the Senior Helpers system right now? And has there been any client pushback to that?
It’s running similar to what you’re seeing. And it really comes down to the payer source, right? If you have a lot of private pay, which we do, which our industry does in general, you have a situation where you’re working with families directly. You can explain what’s going on. They see all the news. They see that minimum wage went up
Are we getting pushback? I mean, some families understand it very much and are going along with it. You might have to readjust some of the hours per week you’re doing. I don’t think we as an industry know what the ceiling is to rates. And you have rate fluctuations throughout the country. In Northern California, the Bay Area, you might be charging $35 or $40 an hour, where in Boise, Idaho, it might be $22. There are all of those types of things from a geographic perspective.
But the cost of care is getting higher. The challenge, to me, really is around the government payers and Medicare Advantage. If you’re looking at Medicaid, or VA or Medicare Advantage, that’s where you have to educate them, because a lot of them come in with “rates first and ask questions later.” We’ve had to kind of educate them and say, “Well, you’re offering a rate that’s less than what we pay people. How do you expect us to do that?”
People have this notion that home care agencies are making all this exorbitant profit. It’s a fair business, but the margins are not as high as people have always presented them to be. I think they’re fair, but they’re not ridiculous. We’re not drug companies here. We’re trying to provide a fair service at a very fair price, an affordable price for as many people as possible. We need to be balanced, though, because we want to employ as many people as needed.
This question is related to some of these supply-and-demand economics. Because the supply of caregivers is limited, a lot of home care agencies have had to really focus on right-fit clients. That is translating to maybe higher client turnover. Are you seeing higher client turnover throughout the Senior Helpers system?
Not as much client turnover as “right fit moving forward.” As we bring new clients on, as we look at our existing clients, we’re evaluating. It’s interesting. You can do this with any home care agency, not just Senior Helpers. You can look at clients that you might have had three or four years ago, where you never raised the rate or never changed the rate.
But then you’re not taking on a new client, where the rates, from the market perspective, are significantly higher. You’re not taking them on because you don’t have a caregiver to staff the case. Well, that’s got to be looked upon, and you either make the rate for the person you’ve had for a while be more fair, or you don’t staff that case and move on to more right-fit clients.
I think this highlights a challenge for the government payers. If you have a home care agency that has high demand but a workforce challenge, why would you put a caregiver on a Medicaid client that’s getting reimbursed at $22 an hour when your private-pay client is paying $26. You have an opportunity to pay the caregiver more. And obviously, the better you pay the caregiver, the better that option is, the more hours you can give them, the longer time they’ll stay with you.
It’s a catch 22. If you don’t start looking at the right fit, it puts a lot of challenges on the agency. I think you have to make some hard decisions.
We’re a month or two away from the one-year anniversary of Advocate Aurora Enterprises’ acquisition of Senior Helpers. How has that gone?
It’s been eye-opening for me to have a chance to work with such a great organization — and great people. I mean, the teams at Advocate Aurora Enterprises, Advocate Aurora Health have been just a joy to work with.
It’s interesting because as you begin to put synergies in place, what we found was that, you know, both organizations are running at their pace. And there was really nobody assigned to “manage the synergies.” So we’ve definitely had to go out and hire some of those people and build some of our team around that.
There are really two types of synergies we look at. One is that they are very large in the Illinois, Wisconsin area. We have franchisees and corporate locations in both those states now. We try to focus on ways of working together in that health care continuum. We’ve worked really closely with the home health and hospice team. We’ve worked with the community-based care and population health teams at Advocate Aurora.
Then outside those two states, we’ve been looking at other types of resources and tools we can give the other offices across the country.
I think both sides would like to go faster. I think that’s natural in any type of situation, with any type of merger of services and organizations. But I can tell you that the future is really bright. We’ve seen some really good results so far. But I think we’re just scratching the surface.
I remember last year, talking in April, there really hadn’t been any major deals announced yet. This deal came out, then it seemed like major home care transaction after major home care transaction. Do you think we’re going to see more M&A activity around the home care franchises this year?
I think it’s all timing, right? We are one of the few that have had a strategic in the mix, one that actually did buy. That was obviously Advocate Aurora Enterprises. When you look at other franchise organizations, most of them are private equity owned, with the Honor deal being an exception.
When you look at that, there’s always a horizon of three, four or five years, when they’re looking to launch another sales process. So you can almost pretty much look at the home care franchise companies, look back at when they were bought and project out the activity. It’s a hot market. We had 55 management meetings through three different processes. There’s definite interest in this space, mostly around private equity, but I do think there are going to be more strategic plays here.
More and more people are seeing — and the health care system is seeing — the value of personal care services as part of their health care continuum.
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