Tackling the Challenges in the Home Care Industry through Entrepreneurship
Family is the core of society, and the utmost priority for us is to care for our loved ones. The recent trend in the home care industry is giving signals of challenges to the quality that we want delivered both to our families and, in the future, to ourselves. The trend is an industry-wide consolidation due to regulation and as a result, tighter cost structures are translating into higher prices for customers.
IBIS World in its latest Canadian Industry report found that ‘the industry has experienced widespread consolidation in recent years, as cost-cutting measures from provincial governments and private insurers have pressured profit margins, inducing industry businesses to merge their operations in order to expand their market share. The total number of industry companies is expected to fall 2.6% during the five years to 2014, and an additional 1.6% during the next five years’ (IBISWorld, 2015)
Although demand will likely remain strong for industry services, pressure from government payers and private insurers is expected to dampen growth for home care providers during the next five years.
According to CIHI’s 2014 National Health Expenditure Trends survey, after adjusting for inflation, percapita provincial healthcare spending has fallen in recent years, due largely to government-wide efforts to cut spending. Healthcare business that spend a significant amount of their annual revenue on capital spending, such as pharmaceutical developers and hospital administration, are expected to experience the brunt of these cuts.
As a result, the Home Care Providers industry’s relatively high degree of labour intensity will likely protect it from significant decline. Nonetheless, industry wages are expected to grow just 2.1% per year on average during the five years to 2019, as compared to 2.8% in the previous five-year period. (IBISWorld, 2015). This will have a direct impact on the pricing structures of care providers.
In Genworth’s Cost of Care Survey 2015, by analyzing the cost impacts to families to support their loved ones over the past 12 years, Genworth has uncovered several trends in the long term care services landscape. ‘Not surprisingly, the cost of all types of care has steadily risen over the years — from homemaker services to nursing home care. In fact 46% of family caregivers spent more than $5,000 each year in caregiving costs.’ (Genworth, 2015)
What’s our role?
Uplift is a free market platform. It means that the possibilities to add value and have competitive advantage are diverse, not just on a cost basis. Care Givers are their own value chains, and it will enable them to promote their own brand and choose their value proposition. Thus, ensuring the highest quality standards and fostering a dynamic service provision system by matching Care Givers with the appropriate Care Managers in a safe ecosystem.
Entrepreneurship means the ability to create value for oneself, resulting in financial freedom as well as an improved lifestyle.
The previous trends clearly indicate that:
a. Care Giver‘s quality of life may be compromised due to tighter cost structures from care providers resulting in slower wage growth.
b. Care Managers will either be forced to incur higher costs when it comes to caring for their loved ones or simply compromise the quality of the services provided.
What’s the downside?
The downside associated with being an entrepreneur is the high risk that comes with it, especially if the entrepreneur is not familiar with business concepts, which could determine the success or failure of any venture.
Where do we add value?
At Uplift, we want to help Caregivers mitigate the natural risk that many entrepreneurs find. We consider our Care Givers independent healthcare operators and entrepreneurs; we want to leverage their potential to create value. We do this by providing them with tools to promote their practice at their own pace and using the highest standards of quality. We strive to promote this entrepreneurial spirit, I am an entrepreneur and it is my commitment to tackle the current challenges that the homecare industry is bringing.
Please let us know what you think in the comments section below.
Genworth. (2015). Genworth 2015 Cost of Care Survey. Retrieved from Genwoth Website:
IBISWorld. (2015). Canada Industry Reports (NAICS) — Home Care Providers in Canada. Retrieved from IBISWorld Website: