2023 Home Care Executive Forecast: Agencies Must Adapt To Rising Bill Rates, Technology Advancement

The new year is shaping up to be another critical one for personal home care agencies.

While bill and pay rates continue to rise, many agencies are figuring out how to provide long-term sustainable care plans that are both effective and affordable.

At the same time, technology implementation and data collection are two aspects of the evolving business that seem to be top of mind for many in the industry.

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As part of our annual tradition, Home Health Care News heard from seven industry leaders and noted their takes on the biggest thing to watch for next year, and what the focus of their organization will be moving forward. Their names and predictions are below, edited for length and clarity.

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Due to the rising pay rates for caregivers, the billing rates for family-funded personal care continue to rise. When will the rates begin to impact the demand and/or affordability of our care? While bill rates going up drive revenues higher, it is also driving average hours of care down. This is due to families having to spread their home care budget over less hours due to the rate increases. Since the bill rate increase percentages more than outweigh the lesser percentage drop-in average hours of care, home care agencies are still able to sustain a nice growth in net income. However, how long is this trend sustainable?

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Our focus in 2023 is driving more new clients so the impact of fewer average hours is mitigated. More new clients at lower average hours per week (20-25) will provide more long-term sustainability. In addition, the introduction of technology in the home will help supplement our care and provide peace of mind to families when we are not in the home. Finally, we’ll also look at ways to provide fractional or neighborly care where we can leverage one caregiver to several clients therefore not relying on traditional hourly care. Technology will play a key role in this service delivery model as well.

— Peter Ross, CEO and co-founder of Senior Helpers

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A trend to watch in home care in 2023 will be the use of technology and the tracking of data to demonstrate better outcomes for clients. We’ve been saying it for quite a while now, but in 2023 and beyond, it will become more of a necessity in order to continue to maintain relationships with referral and payer sources.

With so many technology solutions, it becomes very important to identify which will work best to generate the data and the resulting actions necessary to improve the quality of life as well as fewer hospitalizations for clients. While the objective is to provide the best quality care for clients through actions developed as a result of technology and data tracking, there will continue to be the challenge to secure a consistent workforce to meet the demand for care. While this is an obvious situation for the industry, and obviously there is no silver bullet to solve the issue, it will continue to be imperative to understand what attracts the workforce to the home care vocation and what motivates the workforce to remain in place.

Therefore, the opportunity and largest focus in 2023 and beyond will be to continually improve the processes and techniques for recruitment and retention of caregiving personnel.

— Jake Brown, president & CEO of Always Best Care Senior Services

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One year ago, demand for home-based care was surging. It became a political priority, stifled by labor scarcity. Despite that momentum, with expectations that reimbursement rates for home care would climb — thus enabling agencies to better compete for talent — it didn’t quite come to pass.

We see conditions for care organizations in 2023 with a cautiously neutral view. What we are optimistic about is that agencies can focus on what they can control to drive sustainable growth and gain greater control of their own destiny. The focus must be on how we apply technology to shore operations, training and developing skilled staff, and leveraging demand for home care to pursue new sources of funding or partnerships.

— Adrian Schauer, CEO of AlayaCare

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There will continue to be substantial industry consolidation, requiring home care providers to “scale up” their individual locations in order to remain competitive in both the client and care professional markets.

To support the requirement to amass local scale, technology will play a major role in shaping the future of home care. Technology will help seniors age in place while empowering aging adults to take better care of themselves with smart-home devices, phones, tablets and wearable devices that assist with daily tasks. Additionally, technology like AI or machine learning will help businesses and brands provide better personalized experiences through the use of data.

Honor CEO Seth Sternberg with Home Instead CEO Jeff Huber Photo courtesy of Honor
Honor CEO Seth Sternberg with Home Instead CEO Jeff Huber

Our primary focus at Honor for 2023 is to scale our local owners so that they can serve an even larger percentage of clients and care professionals locally. We will continue to develop and grow the Honor Care Platform, which provides a better work experience for care professionals and leads to better care experiences for clients. Technology will play a huge role in how we scale and will help us on our journey as we work to further expand the world’s capacity to care for aging adults in 2023 and beyond.

— Seth Sternberg, CEO and co-founder of Honor Technology

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The biggest trend in 2023 is the rising cost of private pay home care services. Over the last year, our rates have increased between 20% and 40%. So even though the need for home care has grown, the market of individuals that can afford care on a long-term basis has shrunk. Our competition is no longer the agency down the block. Our new competition is the “alternatives” (ie. hiring privately, family caregivers, assisted living).

I see a growing light of opportunity for our industry as more programs across the country are funding home care and seeing the value of it in the continuum of care. In California, we are seeing an expansion of our Medi-Cal program to provide more benefits in the home which includes home care. In Washington, they passed the Long-Term Care fund act where Washingtonians can receive a benefit of $100 a day (with a lifetime limit of $36,500) that can pay for home care. In Hawaii, they launched the Kupuna Care Program, which allows family caregivers to receive a benefit of $210 a week to go towards the cost of long-term care. Even though there are some challenges ahead, I believe the future is very bright for our industry.

— Ryan Iwamoto, president and co-founder of 24 Hour Home Care

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The pace of change occurring in the home care industry, and health care more broadly, is not slowing. With the first baby boomers starting to turn 80 years old in 2025, we have yet to see the full magnitude of the demand for home care services. This equally presents both challenges and opportunities. We are already feeling the squeeze of not enough care staff. As an industry, we need to stay focused on attracting and — more importantly — retaining care staff to support client demand that today is already going unmet.

Right at Home CEO Margaret Haynes

Economic pressures and the desire to consistently deliver on the Right at Home mission, to improve the quality of life for those we serve, necessitates our need to continue to evolve. Finding new ways to leverage technology advances, innovate around care delivery and partner across the healthcare continuum will be critical to helping people live longer, safer lives wherever they call home.

— Margaret Haynes, president and CEO of Right at Home

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A big trend to watch for in 2023 will be who embraces new technology to operationalize data, help businesses run more efficiently, provide a better experience for caregivers and, most importantly, deliver care to more clients.

We will see a move to integrate virtual care and remote patient monitoring in the services being provided. Regardless of the economy, franchising in the home care space should be well-positioned for growth. Our main focus at Best Life Brands will be growing to more locations and providing support to franchisees that continue to help them attract, grow and retain outstanding caregiving teams to meet the ever-increasing demand.

— J.J. Sorrenti, CEO of Best Life Brands

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