Differentiating an in-home care business can be challenging and requires a diverse portfolio of services. Depending on the organization’s location, the market can sometimes be saturated leading to a need for creative expansion.
Home Health Care News recently interviewed Kevin Smith, CEO of Best of Care, based in Quincy, Massachusetts. Smith shared insights from his 18-year career with the company and highlighted its growth from a small, family-owned business established in 1981 to a significant operation with over 600 employees and 1,500 clients.
The following conversation has been edited for clarity and length.
HHCN: You’ve been in home health care for about 18 years. What led you to this industry?
Smith: This is a family-owned business; I’m the second generation. Like many college graduates, I wasn’t sure what to do after graduation. I tried working at Best of Care, and I’ve never left.
What kept you in home health care and what drives you?
I learned a lot in a very short period. I benefited from starting my career at Best of Care when the company profile was much smaller and covered less territory. It was a far more concentrated business in terms of the services it delivered and its reach, both geographically and by service volume.
I quickly identified opportunities based on what I saw happening within the industry, with the partners with whom we worked when I started my career, and where the general landscape of home care was headed. That drove and informed many of the decisions I have made and have been making since I took on ownership and total leadership of the company from a directional standpoint. Now, what keeps me doing this and driving me is just that.
One of the things I do, perhaps differently or possibly well, is identify opportunities that others don’t always see.
The home care landscape and climate are currently in flux. It’s almost a reflection of what we observe as boomers age. Boomers founded many companies, and they typically started small. They were able to meet growing demand over the years but did not necessarily have a solid or well-thought-out succession plan for their businesses. This is not a criticism; it’s simply an observation, and it has allowed us to collaborate with some of these owners and approach others through the concept of being good stewards of their companies and taking them on in an acquisition, which we have done in the past.
Our approach as a privately owned and operated family company, along with our legacy, industry experience and leadership team, makes us a compelling partner for individuals in that demographic and at that stage in their careers. They seek the right fit in capable hands for the client and their employees, whom they have worked hard to attract and retain over the years. More opportunities like this will emerge in the coming years as franchising gains popularity. As private equity and venture capital continue to explore innovative ways to enter the market, I view this as a significant advantage in terms of our compatibility and appeal to potential partners.
Private equity and M&A, in general, are hot topics right now. How many acquisitions have you completed, and are you currently looking for more?
In my career, we’ve made four acquisitions and absorbed at least three other organizations or parts of organizations that have decided to sunset their personal care business. We have benefited from mutual contracts with those companies in cases where the contractor has approached us and said, “Hey, this provider is moving on. Do you have the capacity to take on X number of employees and a few hundred clients?”
There are two different acquisition formats. Nonetheless, the result is simply administratively taking on more employees, clients, and staff.
We’re always open to conversations, introductions and communications from friends who may be interested in transitioning their business. Similarly, I am always working with my eyes open and looking upward and outward toward opportunities that may present themselves. 2025 is not a year in which we plan to be acquisitive by design, but if the opportunity arises, we’re certainly going to consider it.
Best of Care has begun partnerships with independent living communities to provide short-hour care. What brought that about?
We’re no stranger to short-hour care because we have been a Medicaid provider since our inception. Our entire business history is founded on and modeled on our ability to deliver short chunks of care to many customers. So, this came about organically.
Caregivers who come to work for our company understand that there is unlimited demand from our Medicaid partners to staff these short-hour cases. They are glad to do it because, in some instances, the opportunity for the caregivers connects with the idea that it can lead to a higher paycheck on a per-period basis when you are paid by the hour. Additionally, they earn more for their drive time and mileage, which often amounts to more income than just a couple of eight- to twelve-hour shifts per week.
Another benefit our caregivers enjoy from the short-hour opportunities, both through Medicaid and privately paid cases, is that we maintain consistent pay rates. This means that whether someone takes a private pay case or a Medicaid case, they will not experience fluctuations in their pay rate.
This stability is a significant and supportive aspect of the work experience here. As a result, caregivers are motivated to choose what best fits their schedules and their personal and professional lives at any given moment, which, from a flexibility perspective, is about as good as you can offer an employee.
Our employees were accustomed to working short shifts for Medicaid before we expanded our private pay business. That mindset and approach influenced how we schedule and provide private pay services. So, when we found ourselves in independent living communities, where residents prefer short-hour shifts and want to avoid the burdensome minimums charged by most companies, we were prepared to slot in without changing our business model.
It’s possible to provide this care because the company has evolved into what it is today. As a legacy company, we leverage our model to our advantage. Those who have been here for a long time understand what’s expected of them. Some appreciate the opportunity to do this, as we can have a blended schedule. Some individuals prefer shorter shifts but also want to take on overnight shifts with a private pay client. We offer them the option to create a full-time schedule with various shift lengths based on their geographic location and availability.
How do you choose your community partners?
There is somewhat of a recipe to those considerations. One factor is size, as we want to choose partnerships in areas or regions where we know we’re comfortable with our employee saturation, so we’re not struggling to recruit when demand increases. More importantly, we need to offer substitutes and fill-ins when the steady, everyday worker has a change in their schedule, so we want to ensure we have adequate staffing capacity in those areas from the start.
Once we have identified that, we think that independent living communities, which can skew private in terms of their ownership structure, offer the best flexibility for partnerships because they are not necessarily beholden to a corporate expectation that might extend nationwide and may not give specific consideration to regionality or uniqueness of a partnership or a community.
When you can find those independent communities, the outreach in the initial approach to ownership or management becomes more personable. It is often a more person-to-person, leader-to-leader and CEO-to-CEO approach, where we lean heavily on our relationship-building skills and, most importantly, our proof of concept.
They have people like me knocking on their door every day, trying to get in and establish a partnership. Therefore, you need to clearly articulate and demonstrate, with proof of concept, how things have worked in other communities where you have established some longevity, success and scale to show that you’re worth taking a chance on.
From that perspective, it’s about bringing a new guest into the community. It introduces a new dynamic to your residents, and you want to ensure that whoever you bring in will be the right fit from the start because you only get one opportunity to make a good first impression.
Some providers of shorter-hour care find that they offer this care at a loss or to market their services. Is providing this type of care financially feasible for your organization?
You want to establish yourself as someone capable of meeting individual needs on a micro level or delivering a distinct, small service to someone, with the hope that this interaction evolves into a therapeutic bond between the employee and the client. Ultimately, this can transition into a more significant schedule with extended hours over a longer duration. Naturally, this is the goal, as we have consistently experienced being a short-hour model delivery company, witnessing one-hour shifts evolve into 24/7 care that lasts for years. Thus, this often represents the best-case scenario regarding the potential development of these relationships.
The difference is that we also have some ancillary services through our family of companies. Beyond just hoping to turn each short shift into a long-hour case with the client, we also have opportunities for some of our other services.
We recently launched a private-pay nursing business, for instance. We believe it serves as a valuable resource for an independent living community by having a nurse on campus, if not daily, several times a week, conducting blood pressure clinics, interacting with residents, being a resource, and bringing in speakers for the programming calendar to discuss fall risks, provide education to the community and ensure a visible presence.
When someone requires assistance with something our private-pay nursing team can help with, we may connect with them as a client through that service. If we do, with a nurse in that home, we may identify an opportunity for home care, and it’s a referral act within our ecosystem, in that unit, within that community.
We have a nurse and a scheduler, and in a few of our communities, we have a lead caregiver, a friendly face and an ambassador to that community on behalf of our office. We also maintain an office on site in these communities so that when they are giving tours to prospective residents, it’s nice for them to pop in and say, “Here’s Best of Care, they’re our on-site home care provider so that if mom or dad ever need help at any point in time while they’re a resident here, they’re either one phone call or knock on the door away.”
We’re baked into the community as a resource with an on-site presence. We like to sponsor events, food trucks, ice cream socials and concerts – as I said, we put programming on the calendar – we do everything we can to make the community see us as an on-site resource instead of a solicitous company looking to put everyone under contract.
It speaks to the holistic company we’re building. We’re more than just the home care model within that community. We also offer several other services to keep people in place because occupancy is king in these communities.
Are there any business opportunities in home care that you believe not enough providers are engaging in?
Everyone enjoys identifying their niche and presenting it to clients and the public so they can easily understand what we do, how we do it and why they should pay for our services. Home Care has always been our focus; however, to diversify our offerings and create more engagement with our clients, we acquired a move management company in 2022 called Moving Mentor. We assist with downsizing, right-sizing, floor planning, unpacking, decluttering, estate cataloging, estate preparation, asset cataloging, donations, and everything you need to do before transitioning into an independent or assisted living community.
We thought if we’re in that home with our move management business, maybe we could identify opportunities for our home care team, and perhaps we could support our independent living communities to make sure that we safeguard their moves because it’s crucial to the community that the person who’s paying to come there makes it there and doesn’t have an injury or something happen to them.
I was wondering how we could add some insulation around that, and moving management is a great way to support not only the people making their way to the communities but also those who are transitioning out.
Hopefully, as Moving Mentor continues to grow and expand, and as we work toward scale with that company, those opportunities to partner with communities might begin through the relationship with the move management company. There is no shortage of examples of independent and assisted living facilities partnering with move management companies, in some cases even paying them to make sure their residents have a smooth, safe transition from home to a new community.
What are some of the most challenging issues currently facing the home care industry?
One of the biggest challenges is that there may eventually be a cap on the private-pay market.
Many people prefer to receive care at home as the middle class diminishes. What does this mean for private home care providers when rates may naturally be capped by the market based on the region? Caregiver pay rates are rising due to demand, but many clients can only afford $X per hour for care. What happens next? Will more people begin to spend down their assets to qualify for Medicaid? And if that’s the case, what effect will it have on the demand for those relying on Medicaid for home care?
There will be a tipping or inflection point in the next decade or so, and it will be a big challenge for providers to figure out how to meet that because wages and service delivery costs continue to push upward. Everything costs more, and the appetite of the private-pay community will eventually reach its maximum.
That’s an ongoing challenge, and as I mentioned, the rising service delivery costs to recruit, find, train and retain high-quality employees are significant. It’s expensive, and slim margins have hindered home care providers. To stay competitive, you need volume, and with so many new providers entering the market, it can be increasingly difficult to achieve this. This is one of the reasons we are exploring alternative revenue streams that we’re working to grow and integrate into our existing business to diversify our revenue sources in various ways.
Speaking of Medicaid, do the new regulations and administration cause you any heartburn right now?
Not in Massachusetts, but certainly in some other states. In Massachusetts, reimbursement and pay rate are cushioned mainly because we have a high minimum wage. Therefore, we’re not overly concerned with the 80/20 rule, especially when factoring in the definition of compensation.
We’ve already seen some big guys pulling out of states and regions because of 80/20. They knew that trying to deliver the business they were already delivering or new business would be prohibitive. I’ve already seen changes in wholesale strategies and decision-making processes played out by some large publicly traded companies that provide in-home care in certain states or regions. That’s a huge challenge, for sure.
I don’t understand how a small or brand-new mom-and-pop company manages to survive for long periods in that kind of regulatory environment. I’m hoping that common sense and logic will prevail before we witness an exodus of local providers who are small businesses doing excellent work for their communities and employing individuals in meaningful jobs. I can’t envision what that outcome looks like, but I’m certainly not heartened by what I’ve seen in certain states in response to this situation.
What new ways do you plan to achieve growth this year?
We’re still counting on annual year-over-year organic growth, which we have experienced. However, we have also experienced some headwinds due to rate increases that we have implemented or negotiated. We have also felt some market penetration in areas where we’ve effectively hired many people, which has helped us take on more work.
We have focused on existing partnerships and contracts, expanding them by increasing service volume. This year, we’ve already hired over 100 new caregivers. From this perspective, we aim to recruit both part- and full-time workers to secure as much talent as possible to meet service demand. Currently, in Massachusetts, that’s the priority: finding more caregivers and managing greater volume.
Can you share some of your longer-term goals?
I mentioned move management and private pay. We also have a care management team. Additionally, we own some assisted living locator franchises through a different company, which help people find assisted living options. We’re striving to build a comprehensive wheel of services so that when someone comes to us, they can age in place comfortably. We can assist them in mapping out their future care needs and provide nursing support, and if their current home is no longer a suitable environment, we can help them find the next best place to call home and offer support during the transition.
I’m working to expand all of these supportive services we’re building, growing or acquiring, so that whenever we deliver one of those services, the others will follow.
We’re trying to tell that story better and share that concept with our existing clients. We want them to know that we can do all these great things for them, but it is easier said than done to do that.
People are incredibly busy, especially when talking to adult children who have their own kids and are trying to manage the care needs of their parents or loved ones. It’s challenging for them to find the time to breathe, let alone read a newsletter or an email from us about our fantastic new services.
We’re working on presenting this information in a way that is clear and easy to understand so that we can expand our reach and ensure that no matter how people discover us, they know about all the wonderful things we can offer.
The post From Family Roots To Industry Leader: The Transformation Of Best Of Care appeared first on Home Health Care News.
