The ‘Strategic Trade-Offs’ Private-Pay Home Care Providers Are Making To Grow

As billing costs rise, private-pay home care leaders are trying to find ways to continue caring for as many seniors as possible. To do so, they are embracing new – and sometimes unique – strategies.

At 24 Hour Home Care, there has been a move towards funded programs, as that cost of care has continued to increase.

“The cost of labor is through the roof, which means the cost of care is really challenging for us,” Ryan Iwamoto, president and co-founder of 24 Hour Home Care, said during a panel discussion at the Home Care Association of America (HCAOA) national conference on Monday. “As the cost of care has gone up, the cost of alternatives hasn’t gone up to the same clip as private-pay home care. That gap has gotten wider and wider.”


Los Angeles-based 24 Hour Home Care offers home care and intellectual and developmental disability (IDD) services across California and Arizona.

Iwamoto noted that 24 Hour Home Care still operates under a private-pay structure, but that working with other programs, like Medicaid-funded home- and community-based services, allowed the company to make more of an impact.

“By adding more breadth to our services, we can impact more lives, and not just for people that can afford it, but for people that may need it even more so,” he said.


For home care providers looking to scale, it’s important to make strategic trade-offs, according to Iwamoto.

“If you try to do everything, you’re not going to be able to do anything,” he said. “For us, it is [about] finding the things that worked well, the bright spots, and putting time and energy towards those bright spots,” he said.

Matt Kroll — president of personal care services at Bayada Home Health Care — believes that scaling private pay now is all about nailing the “business rhythms.”

“Specifically, understanding what our pricing strategy is, understanding what are the KPIs that matter,” he said during the panel discussion. “We still see huge demand. We just don’t want all of it. We realize that we’re much better at taking cases where they need 40 hours a week plus.”

Moorestown, New Jersey-based Bayada is a provider of home health, hospice and home care services. It has over 360 locations across 23 states and six other countries.

Bayada is looking to plant its flag in five new markets annually, but the company has perfected its strategy for growth expansion, according to Kroll.

“We’re not very good at planting new flags in the states,” he said. “What we’re good at is, if we’re in Chicago, we could probably divide Chicago in different parts, and location matters. We think about how we can divide up the markets we’re in and get hyper-local, so we can continue to scale our business.”

On its end, Family Tree Private Care discovered that the best way to enter new markets was through M&A expansion. This also means retaining or hiring staff that is familiar with that market.

“If you can’t entrust other people to grow and develop, it’s just really difficult,” Daniel Gottschalk, president of Family Tree Private Care, said during the discussion.

As a company, Family Tree offers concierge-level caregiving, private nursing and care management services in Texas and Colorado.

Iwamoto also believes in the importance of having the right people in place. In fact, he has taken the Trader Joe’s model, and ran with it, at 24 Hour Home Care.

“It’s hard to find someone that does not like Trader Joe’s, and their secret sauce is competitive prices and quality goods, but I think how they win is through their people,” he said. “We win, not just by our caregivers, but the people behind the caregivers. They’re a little bit more engaged, better trained and better paid than our competition. I believe that is the reason why we’re here today.”

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