Throughout 2021, the home care industry saw M&A heat up while staffing shortages placed pressure on providers. As industry leaders gear up for 2022, they are focused on addressing these workforce challenges and leaning further into dealmaking.
From his perspective, Right at Home President and CEO Brian Petranick is optimistic about what the labor climate will look like in 2022.
Founded in 1995, the Omaha, Nebraska-based Right at Home offers in-home care to seniors and adults with disabilities across its more than 600 franchise locations in the U.S. and seven other countries.
“We’re starting to see caregivers coming back. We’re starting to see the number of applications increasing broadly across the system,” Petranick said at the Home Health Care News Home Care Conference. “We’re seeing some positive, we’ll call it, leading indicators. It looks like we’re starting to break this cycle.”
On the flip side, Jennifer Sheets, president and CEO of Caring Brands International and Interim HealthCare, believes next year will likely be even tougher for providers on the staffing front.
“The reality is there are more and more people coming into the need for our care, with less and less people to provide the care,” she said during the event. “I think a lot of that’s also going to depend on what happens at the federal and the state level.”
Based in Sunrise, Florida, and a part of Caring Brands National, Interim is a franchise that provides home health, hospice, palliative care and other services across over 330 locations in the U.S. and Saudi Arabia.
At Interim, roughly 50% of referrals have been left on the table due to staffing shortages, according to Sheets.
“We provide 500,000 people care every single year, so how many more need care if we’re saying no to 50%,” she said.
New buyers coming in
Apart from staffing, dealmaking activity played a major role in shaping home care this year. A number of larger franchise organizations were acquired, and this will likely continue next year, according to Petranick.
“There’s a lot of really smart people that are looking at this industry from the outside in, so to speak, and they’re seeing all the drivers and seeing the runway ahead,” he said. “We’re going to continue to see a lot of M&A activity. We’ll probably see more strategic buyers, at some point, enter into the marketplace.”
One notable example of this is Advocate Aurora Enterprises’ acquisition of Senior Helpers in April. Advocate Aurora Enterprises is a subsidiary of Midwest-based Advocate Aurora Health, one of the 12 largest not-for-profit, integrated health systems in the U.S.
Still, there are potential downsides to more buyers entering the market, according to Sheets.
“We’ve also got a lot of investors that have never invested in health care before, … and I think there’s good and bad to that,” she said. “What I worry about is people coming into our space who don’t understand that it’s a people business, that can actually degrade our reputation as an industry.”
As the year continues to wind down, Right at Home and Interim are looking ahead to 2022 and keeping a close eye on potential trends, challenges and opportunities. With this in mind, finding solutions for labor market issues will continue to be a significant focus, according to Petranick.
“We’re seeing right now, with this labor market, the pandemic has pulled back the curtain, so to speak, and given us a preview for the future,” he said. “We know that there are labor shortages predicted for five, 10 years down the line.”
Similarly, recruiting and expanding the workforce will be a major priority at Interim. The company will also be focusing its efforts on advocacy.
“If we could figure out how to bring the voices together in this industry, we would be the strongest [advocates],” Sheets said. “Often, all of our groups aren’t on the same page or taking a bold stand. I think we have to keep fighting at the federal level and the state level because [home care is] the lowest cost setting with the highest quality. It’s where 90% of the people want to be.”
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