Predicting Netflix’s blockbuster moment in the home personal care industry


The personal care industry in the United States is full of wonders.

Where their home health counterparts are generally similarly built, mostly linked to Medicare as the payer, the personal care market is full of companies with very different strategies.

There are franchises, non-franchises, those that lean toward private pay and those that lean toward government pay. It’s also a less regulated but still fragmented industry, so the strategies being rolled out across the country tend to be broad and exciting.


For example, home care provider Arosa, which has 28 locations in 8 states and is backed by private equity firm Bain Capital, is “incredibly bullish” on its line of care management services, according to its CEO, Ari Medoff.

“Families who get care management and clients who get care management are incredibly satisfied,” said Ari Medoff, CEO of Arosa, on a panel last week at Lincoln Healthcare’s Home Care Investment and Innovation Conference. “I recognize that it is seen as a luxury service, because it can cost between $100 and $200 an hour. … But if you get an hour or two a week of care management on an ongoing basis, that is transformative for your life … and it really should be accessible to a broader spectrum of the population than even personal care.”

Care management and home care services together are not a new pairing, nor is it necessarily a rare one. But it is an example of the different approaches that home care companies are taking in their business strategies.

Peter Ross, CEO of home care franchise Senior Helpers, was also on the panel. And he was intrigued by the idea of ​​diving deeper into care management in the future.

“I think there is a long way to go for us, and we have to look at this holistically,” Ross said. “I think the care management you are doing, [Ari]It is a very good thing to do. Obviously, I think it’s something in the future where we could have a more active role.”

Advocate Aurora Health acquired Senior Helpers last year as part of its strategy to complete the entire continuum of care.

Government payment for personal care

On the senior assistant end, Ross has taken his company further into government pay in recent times.

Despite remaining a predominantly private payment provider, he sees the value in working with government payers, given all their power.

“My whole approach used to be 100% private,” Ross said. “But now we have a very large revenue base, probably 25% to 30%, that is funded by the government. The government pays 55% of all health care costs in this country. So it’s like you have to beat them or join them, somehow.”

On the one hand, private payment allows an operator not to be completely indebted to the payers. But at the same time, to get into more value- and risk-based contracts, as many in the industry are, you need to play the game with payers.

“The payers rule the world here,” Ross said. “Unless you’re on that private pay, which is why I loved private pay for so long, because we didn’t have to deal with payers and the government. So if you can achieve that, and grow, that’s awesome. But if it is about payers and companies, which is where the risks are, that is where you have to play in this.

But that doesn’t mean Senior Helpers is ready. Both Medoff and Ross expressed some of their issues with evolving relationships between Medicare Advantage (MA) plans and home care providers.

“I was excited to hear three years ago that we were part of MA, until I found out what that meant,” Ross said.

For example, in MA relationships that Senior Helpers have, the paid hours range from 70 to 124 hours per year, which isn’t likely enough to make a difference to either the company’s bottom line or the patient. .

But Ross acknowledged that he thinks Medicare will eventually reimburse personal care services in a more meaningful way.

“I think one day Medicare will reimburse what we do here in personal care, but I think we’re going to have to have the data to get there,” Ross said. “To me, that’s exciting. But you have to be careful what you ask for. However, I think the future is bright if we can really justify our existence and come up with some really creative care platforms and care and delivery models for them.”

The pros and cons

The freedom private pay offers providers is immense compared to their government-paid peers.

Having said that, there is also innovation that comes with the government payment. One example would be Chicago-based Help At Home’s staffing model, which allows caregivers to swap shifts.

“If you have a 20-hour-a-week care plan, that’s not really a full-time job for caregivers,” Alan Germano, Help At Home’s vice president of corporate development, said on the panel. “And so how do you fully utilize their time? We have some neat scheduling systems that text about open shifts or allow caregivers to swap shifts through a technology platform. That really helps to fill the open shifts that we have, but also to use caregiver time more efficiently.”

Help At Home has more than 50,000 caregivers and 65,000 clients in 11 markets in the US The company’s revenue is almost 100% paid by the government.

Private pay organizations in the room thought shift swaps were a great idea, but admitted they couldn’t use them.

This is because, in most cases, clients who pay for private pay care typically expect the same worker, or group of workers, visit by visit.

‘A Netflix-Blockbuster moment’

Medoff wants to change the way personal care is paid for. Not involving more or less the government, but changing the period of time that the payment is based on.

He believes that change could be a Netflix-Blockbuster moment, in which an old way of doing things is phased out and a new, more successful one is introduced.

“I think we’re doing ourselves a disservice right now by selling home care by the hour,” Medoff said. “A dream of mine, and something we are working on, is to think about selling a daily rate or a weekly rate that could be based on results.”

Those results, he said, would not just be hospital readmissions or blood pressure measurements. Instead, they would be based on quality of life, happiness, connectedness, and generally the ability to age in place successfully.

That could be hard to measure, since benchmarks like increased happiness and connectedness can’t be quantified, but Medoff thinks it could be done. It could be done with better technology, more involved case managers, and unique data, specifically.

“I couldn’t agree more,” Ross said. “I think that is something that we have to change: that message. That you’re getting this, this, and this, which may cost you $1,000 a month, but you have access to all of that, plus technology and other health care coverage. And it’s 24 hours a day. So that’s where I think we have to go.”