Baby Boomer Boom Imminent for Home Health Care

The growth of Synergy HomeCare of Cheyenne is the focus of a spotlight article in the Wyoming Business Report.

Wyoming’s population is aging. With that basic change has come sweeping alterations for the home health care and companion-care industries.

The most notable change has been in sheer size. Synergy HomeCare of Cheyenne, a company strictly focused on companion care rather than home health care, has been experiencing massive growth. According to the company’s public relations representative, Synergy revenue doubled from $300,000 in 2012 to $600,000 in 2013. Owner Jeff Pederson, who transitioned to the home-care industry from automotive finance after one too many corporate transfers, started his franchise “at zero” in 2010.

“It sort of took a while to get entrenched on the community of Cheyenne,” he said. “People here still tend to do business with people they know.”

But with the trenches dug, things are a lot easier to maintain and grow. By 2012, he said his business saw 30 percent growth before the even more explosive growth in 2013. Consequently, he’s added about a third more staff since the end of 2012, going from about 30 employees to 40 through 2013.

Synergy’s model of home care, also known as private-duty care or companion care, gives clients someone that can do anything from grocery runs to laundry and housekeeping to transportation. However, one owner of a similar business in Casper said the state draws the line at managing medications, although Wyoming still allows companion-care providers to do medication reminders.

For Pederson, he said finding good employees isn’t challenging, but matching them to the right clients can be difficult.
“Personality is a lot of times a better driver than the skill set,” he said. “You’re going into their home.”

He added that people desire to stay in the home they worked hard to own and maintain, but need some daily help to stay safe and comfortable in their own domain. That’s likely not a mentality that will go away. In fact, Pederson said even though his business has exploded since he opened his doors, it’s only going to get busier.

Baby Boomer countdown

“We’re just barely getting to the start of the aging baby boomers,” Pederson said. “There’s a lot of people going to hit the 70-plus aging group.”

At age 50, Pederson himself barely falls into the technical definition of a baby boomer as someone born between 1946 and 1964. Meanwhile, the born-first baby boomers are becoming 68 years old.  

But it may still be awhile before boomers heavily use companion-care service. For Quinn Clark, owner of Casper-based companion-care provider Caring Hands of Wyoming, the average age of his clients is 85 years old, with some pushing 90.

“We’ve been steadily growing and that doesn’t appear to be waning anytime soon purely based on demographics,” Clark said in a phone interview.

He said baby boomers should cause a major boom for his business within the next 10-15 years. And when that time comes, a lot will change.

“The facilities in Wyoming are not ready for this,” he said. “They will be full and people will be begging for [companion care].”

Replacing family?

According to Clark, a third of Americans are caring for a loved one, but not everyone can do it themselves. That’s where his service and others like it come in.

“At some level it’s about replacing what family care might have been for people back in the day,” Pederson of Synergy said.

Clark said most of his clients – 75-80 percent – pay for companion-care services out of pocket, though some families chip in on the cost to feel like they’re helping.

“Medicare doesn’t write a check for someone to cook lunch; that’s not what they do,” he said. But another insurance has cropped up around long-term care, which covers both companion care and the more-training-required home health care. On both sides, company officials say there’s a loose referral network between home health care and companion-care providers. They often work as a sort of tag team, with multiple providers helping the same client.
“It’s very common and probably desired that they have some medical people checking on them as well and fill that role for them,” Pederson said.

An eroding bridge

Some even bridge the gap and provide both services. Interim HealthCare Inc. in Casper has 60 employees, of which only about five strictly provide companion care. The rest are certified as RNs, CNAs and physical therapists.
Administrator Kary Pickett said while the traditional home health care segment of Interim has been growing about 5 percent per year, private duty care has been “growing leaps and bounds.” As of now about 70 percent of the business is home health care, but the oversized slice of pie is shrinking.

She predicted the trend would continue, especially under new Medicare cuts through President Obama’s Affordable Care Act, also known as Obamacare. Obamacare will cut home health care reimbursements by 14 percent through the next four years, something many industry specialists say will force home health-care providers to shutter up shops. 
When the Centers for Medicare and Medicaid Services announced the change, it said the new reimbursements would “better align Medicare payments with home health agencies’ costs [of] providing care, while lowering costs to taxpayers and the 3.5 million Medicare beneficiaries who receive home health services nationwide.”

As far as Pickett is concerned, she predicts the change will make home health care much less accessible, swinging the pendulum more toward companion care. She said Obamacare may also add a co-pay of between $100 and $600 for episodic home health-care events where there hasn’t been a co-pay before, making the option less attractive as well.
Pickett said costs to provide home health care go up 5-7 percent each year, largely because of regulations like those coming through the ACA.

“Guidelines are becoming stiffer – it’s a lot more difficult to qualify somebody for traditional home care,” she said. She pointed to the “kind of comical” naming of the Oasis tool used by Medicare to qualify a patient for home health care. The assessment has 146 questions a patient has to answer. Pickett said it takes about two and a half hours to complete. And the assessment has to be redone every 60 days.

Kathy Klein, owner of Summit Home Health Care in Laramie and Cheyenne, called it a 42-page assessment “just to admit them.”

“It’s just time-consuming,” she said.

Even so, Klein’s business has been healthy. She has 58 employees between her two locations, and said a restructuring helped her trim that from 104 employees two years ago. Yet with her smaller staff, she said her company gets more done with fewer people.

While about 70 percent of her employees are in the Laramie location, she said she is planning to expand in Cheyenne, especially the physical therapy side, though she didn’t want to divulge too many details.

Klein said she had also noticed the sliding standards for state Medicaid and federal Medicare for home health care. She said the mentality has deteriorated from doing what it takes – often staying in a home and taking care of people for months – to “get in there, take care of the patient and get out.”

Despite challenges, Klein said it is still a rewarding business. She said she often hears stories about above-and-beyond generosity from her staff toward clients, like someone who cared for a dog for days at a time or doing laundry off duty when a washing machine was broken.

“The stories go on forever,” she said. “Half the stuff that gets done I never even hear about.”
Taken all together, it makes for a good profession.

“It’s very rewarding and I have an unbelievable staff,” Klein said.

Wyoming Business Report eDaily Editor Mark Wilcox plans to live in his home until he dies, which could be a while. His grandfather is 97 years old.