Your Primer to Healthcare Mergers and Acquisitions

Free Agents, Employees, And The Home Care Marketplace: 5 Important Trends

Sep 29, 2015

by Tom Schramski

By Tom Schramski, PhD, CM&AA

Volume 2 Issue 20, September 29, 2015

I just returned from my 45th high school reunion in small town Minnesota where many of my life-long friends are retiring.  Many of them had worked with one employer in blue- or white-collar jobs for over 30 years (I was short-termer by comparison, having worked 22 years for a company I helped to found). This is a disappearing phenomenon of the Baby Boomer and Traditionalist generations.

The healthcare vertical of home care and hospice services is challenged by this evolution more than any other human service marketplace.  The complex blend of independent contractors, Millennials, changing labor regulations, consumerism, healthcare reform, and many other ingredients is increasingly leading to a redefinition of the social contract between home care companies, individual providers of service, and their customers.  When combined with the very thin margins of many service providers, thoughtful innovation is a necessity.

Successful home care owners and executives are paying careful attention to the following trends in their strategic decision-making:

  • The DOL “Home Care Rule” – On August 21, 2015, the Department of Labor (DOL) “Home Care Rule” was upheld by a Federal appeals court. This ruling extends minimum wage and overtime protection to non-medical home care employees and eliminates the “companionship exemption” that has been used for decades.  In and of itself, this ruling threatens the existence of some home care agencies.
  • Uber World – Uber has flourished with the premise that it is a technology platform that connects drivers and passengers, rather than a taxi service which owns/leases cars and employs drivers.  While this model is under assault from a US District Court in San Francisco, it continues to expand to the home care market with and other similar models that are enabled by technology.  There is much promise here for home care providers.
  • The Free Agent – Daniel Pink and others have been writing about the “free agent” phenomenon for 20 years and it continues to grow in relevance.  Why?  The Millennial generation has helped to inspire a new way of looking at “who you are and what you want to do with your life” as a worker noted in a Fast Company article authored by Pink in 1997.  The home care market lacks the security that was present for the past two decades, so why not re-evaluate one’s position and relationship to one’s employer?
  • The New Contractor – Taking a cue from free agents, there is a new, more sophisticated approach to independent contractors and DOL compliance that is emerging.  While this model requires discipline, many home care companies report the use of this model has improved morale and created a workforce that is more attentive to their responsibilities and opportunities as a partner with the home care/hospice company.
  • Focusing On Customer Choice – Medicaid, Medicare, and private payers are increasingly emphasizing individual choice, forcing home care providers to adapt their employment/contracting practices and become more customer-centric.  It is one area that enterprising home care companies are developing as a competitive advantage.

The threads of autonomy and personal choice are woven through these trends and provide some sense of where the home care marketplace is headed.  One size does not fit all for direct service providers and customers, and they are increasingly vocal about their position.  Successful home care entrepreneurs see this and are incorporating the insights into their future actions.

Tom Schramski

Tom Schramski PhD, CM&AA


Tom was the Founder and Managing Partner of VERTESS. He was a Certified Merger & Acquisition Advisor (CM&AA), consultant, and Licensed Psychologist with over 35 years of very successful national experience in the healthcare marketplace, including co-founding and building a $25 million behavioral health/disabilities services company. Tom represented sellers and investors across the healthcare spectrum and was recognized for his executive leadership in the 2005 Entrepreneur of the Year issue of Inc. Tom passed away in December 2018.

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