7/20/16 – This guest post is written by three students in the Global Social and Sustainable Enterprise MBA program who are working on finding ways to improve the quality of life for the elderly. Please join Nick, Shorouk, and Labeat on their journey into the home health care industry.
The Home Healthcare Industry
We have been researching the home health care industry, its effect on senior citizens’ overall health, and the impact it has on the healthcare industry. Home health care is not a new idea, and this industry has been growing for several decades to meet the demands of a growing population of senior citizens. Despite this growth, our team has found this industry is in major need of a facelift. A few of our observations include:
- Very few agencies have the ability to scale and effectively care for the demand of seniors.
- Major nurse (caregiver) turnover results in inconsistent practices in caring for seniors.
- The majority of seniors and their families find the process of finding, hiring and managing home health care to be difficult and a major headache throughout the entire process.
- Home health care has long been antiquated, and has been in desperate need of innovative entrepreneurs to help bring this industry into the 21st century.
We knew there was an opportunity somewhere, but we just didn’t know where it would be.
For months, our team has been brainstorming ideas for how these gaps could be closed and how a better type of company could be formed in this industry. We intended to implement a lean business model that could scale and reach thousands of clients more affordably than anyone else. While researching several innovative new home health care models conceived from the minds in Silicon Valley, we found one company in particular that had a similar vision to ours, which had raised $23M in venture capitalist funding two years prior, and was becoming a major player in the Californian market. Combined with our secondary research led us to believe this model could help us achieve a lean and scalable business by being a third party facilitator of home health care services; in other words, a home health care broker. Due to the early successes of this type of company, this seemed like a viable direction for our venture, so we were armed with motivation to begin our primary research in Fort Collins, Denver, San Francisco, Tucson and Phoenix.
The Pivot: All is not as it first seemed
Our team began conducting depth and expert interviews by partnering with one of the leading home health care companies in the industry to distribute letters to its elderly clientele requesting volunteers for our venture practicum research. Out of 150 letters, we received only 10 responses. After sitting down with these 10 respondents, we learned valuable information, albeit completely unrelated to the questions we asked. Even though 10 interviews is a very small sample size, none of the respondents were interested in hiring a third party to find, hire, and manage home health care. In fact, none of the seniors or their families saw any value in the idea, and most of the expert interviews from executives at nursing home or home health care agencies similarly dismissed the idea. This got us thinking: Could this really be a case of being too early to the market, and not understood as being genius until several years later? Our guess: probably not. But the research continued anyway.
Then the news that would rock our little venture world came crashing down like an avalanche of confusion and doubt. The company we had been researching in Silicon Valley – the one that had raised millions of dollars – had pivoted away from its brokerage model to a traditional home health care company that employed its own nurses. Shorouk read about the pivot on a Yelp review that had been complaining about the company. The CEO of this company had responded to multiple negative remarks about the agency’s nurses, and had informed the reviewer that his company would be pivoting to a more traditional model. There was no press release, article, or announcement, but only a 28-year old CEO doing Yelp damage control.
Unfortunately, the news of our inspiration’s pivot came just days after we had booked our tickets to San Francisco, so there was no going back. We would need to at least alter our direction as well. We decided we would begin researching traditional best practices in home care, as well as the regulation that sent our previous model spiraling downward in just under two years of operation. First up: San Francisco.