New tech-enabled home care initiatives emerge – what does it mean?

Last year’s VC investment in the tech-enabled home care segment caught industry attention.  2015 was a banner year of capital infusion for the 2.0 version of the home care industry. As Honor revved up with a $20 million investment, Home Hero raised a $23 million round and launched a software platform and converted workers to W2 employees. CareLinx received a $3 million round in May and then just into the new year, Hometeam upped the ante with a $27 million VC round.  Meanwhile, at the start of 2016, an eye-popping market sizing from AARP/Parks Associates of $279 billion for all things caregiving-related further underlined a perceived business opportunity, including the projection of an additional 1 million jobs in home care.

Is home care the hot segment as compared to senior housing? The home care space (aka companion care or private duty care) had previously been something of a technology laggard – but growth in the franchise segment began to be noticed in 2010.   And while the senior housing segment has perhaps been overbuilt, it may simply be that today’s seniors cannot afford to move in. The average net worth of an individual aged 75+ inclusive of home equity is only $156K – not enough for more than a few years of private pay assisted living, now averaging $3500 per month. At $42K per year average – much higher in well-to-do and urban areas -- it’s simply not an option for many.  

Home care is an indirect provider for senior housing.  Even for the senior housing segment, home care can be found throughout the premises – providing additional hands-and-eyes care for the frailest residents – with an average resident age of 87.  Consider that 50% of the residents in dementia care may receive additional daily private duty home care hours . Is that care ‘tech-enabled’?  Probably no more than the senior housing industry,  just now becoming WiFi-enabled for visitors – and still viewed as a market opportunity segment for tech vendors.

Tech-enabling care is an opportunity for vendors and a lens for consumers.  Consider that tech-enabling home care -- whether inside senior housing communities or in seniors' private homes -- may turn out to be the innovation that both segments badly need. There are not too many industries left that can meet consumer expectations without letting them know what the heck is going on. Opacity simply frustrates families and can drive staff crazy with requests for information about loved ones. Over the past few months of 2016, Comfort Keepers partnered with GrandPad and Acer – providing tablets in the homes of care recipients; and this week Philips and Right At Home announced their partnership to offer the “Internet of Things’, or passive sensors in the homes of care recipients.  Can Home Instead be next to announce a tech partnership?  Who knows – they are posting tech-focused articles on their blog. Maybe that is a hint? If this is a sweeping trend, it is most welcome. Watch this space.