Private pay is one of the trickiest segments for home care providers to scale. The “secret sauce” to growing these operations, according to three industry experts, is people.
“I’m a big, big advocate of overinvesting and finding the quality people,” Ryan Iwamoto, president and co-founder of 24 Hour Home Care, said in a panel discussion at the 2023 Home Care Association of America National Conference. “For those critical roles, you want to make sure you get ‘A’ players.”
High-quality people are crucial for any home healthcare business, but especially those that rely on private payers, as the lack of government reimbursement can make growth more challenging. However, the private pay market still presents enormous growth potential; one area to tap into could be the family caregiver market, according to Iwamoto. There are 50 million people providing unpaid care in the United States today, he noted, a market equivalent to $600 billion.
“On one end we have this caregiver shortage; on the other end we have all these family members or informal caregivers that are working and not getting paid,” Iwamoto said. “Can we take those two challenges to be solutions for each other?”
Activating these unpaid caregivers to grow private pay operations is just one possibility. The importance of people comes into play at all levels of business, the panelists agreed.
“The number one impediment to our continued growth is people,” Matt Kroll, president of personal care services at BAYADA Home Health Care, said during the conference. He noted that finding the right talent starts with recruitment. “We have to be able to describe the job more accurately, we have to hire to those competencies, and then we have to train to that,” Kroll said.
An agency’s opportunities to scale private pay might come down to its geographic location. Some states, like California, have high labor costs that make it difficult for private payers to pay for care. At the same time, California provides favorable Medicaid reimbursement, which presents an alternate opportunity for growth.
“Look for the bright spots,” Iwamoto said. His company, 24 Hour Home Care, is based in California. “When you find the bright spots, put the water and energy into it for it to grow.”
