When Alan’s wife, Toby, was diagnosed with Parkinson’s four years ago, the retired geophysicist turned to a not-for-profit in Palo Alto, California – called Avenidas Village – for guidance. Through Avenidas, Alan learned about several online platforms that connect individuals who need home care with workers who provide it.
Now, once a week, Alan opens his Windows PC and logs onto the website of a company called Honor, which lets him summon a “CarePro” the way you would call an Uber. These “nice young women,” usually nursing students, look after Toby while Alan goes to attend a lecture or to rehearse with one of several chamber music groups, for which he plays violin.
For Eleanor, in the Bronx, it was her daughter Carol who made arrangements. “I don’t like computers … I don’t do Facebook,” Eleanor told me, smiling, when I asked how she kept up with her four grandchildren. But confined to a wheelchair after a stroke, Eleanor knew that if she was going to stay in the apartment where she had lived for 51 years with her late husband, she would need constant assistance. Now, two caregivers from Hometeam, a startup providing in-home care to seniors,take turns staying over. They communicate with each other, and with Carol, through an app loaded on a tablet that stands in the center of her coffee table, in a room lined with family portraits and travel souvenirs.
The market
Silicon Valley skews young and its companies are notoriously ageist. When Facebook founder Mark Zuckerberg turned 30 in 2014, the internet gleefully reminded him that he once said that he would hesitate to hire anyone that old. Another popular witticism is that San Francisco’s tech culture is focused on solving one problem: “What is my mother no longer doing for me?” Hence the seemingly endless investment in startups that offer food, laundry and cleaning services.
Conventional wisdom says that you cannot sell tech to the elderly. Yet over the past several years, the sheer size of the market has begun to attract investors. For them, the time has come to ask not what another mommy app can do for you, but what an app could do for your mommy. And big tech investors, like Facebook board member Marc Andreessen, are sensing a major opportunity.
As more ‘digital natives’ become responsible for their parents, they will look for solutions that offer convenience
There are currently around 50 million Americans over the age of 65 , and 10,000 more turn 65 every day. A trillion dollars are spent on healthcare for American seniors every year. And more and more “digital natives” are entering the “sandwich generation”, the age when they are responsible for caring for both their children and their parents, while also meeting the demands of careers. It stands to reason that they will look for solutions that offer convenience, having spent their adult lives with Uber and TaskRabbit and Handy.
Since 2013, several startups have launched with the mission of bringing the on-demand model to elder care. HomeHero, based in Los Angeles, recently announced a program which facilitates transferring patients from the hospital to home with the help of a HomeHero caregiver. Hometeam, headquartered in New York, currently has several hundred caregivers providing services in four east coast states. Honor, in San Francisco, raised $ 20m – led by Andreessen Horowitz – in its first round of funding, and has established partnerships with the American Cancer Association and the American Parkinson’s Association.
Why the rush of investment?
The founders behind these companies are not the first to try to bring tech industry tools to the disorganized field of home care. Care.com was founded in 2006 on the model of an eBay or a Craigslist: it is a website that connects people looking to provide services, from babysitting to standardized test tutoring to elder care, with those who need it. Care.com left it up to users to negotiate their own financial arrangements. (Alan, an Honor user, reported having a terrible experience: “It was only $ 18 an hour, but $ 18 an hour of agony,” he said of a string of workers who proved unreliable.) Carelinx a “professional caregiver marketplace” focused on elders launched at the end of 2011. It was endorsed by theAmerican Association of Retired People. However, it also remained at the level of a platform or marketplace.
The new companies are different in that they provide the service themselves. Honor and Hometeam have both developed software designed to match user and care provider and to facilitate communications. Most often, that is with the children of the clients actually receiving the care. The apps also provide protocols for treating patients with particular conditions. Hence, the partnerships that Honor has created with the American Cancer Association and American Parkinson’s Association. Finally, these companies are creating new models to provide training and career development to care providers – a population that is growing along with the population of seniors.
Honor founder Seth Sternberg explains: “When we started looking at the nonmedical home care space, we realized that the problem was that home care professionals are treated really poorly. 56% of them are on some kind of government assistance. If you can’t take care of yourself how should we expect you to take care of someone else?” The average hourly wage of a home healthcare provider in California is $ 9.50. A San Francisco dog-walker, by contrast, earns $ 20.
Honor announced that they were making all of their CarePros employees, rather than independent contractors, in January 2016. Salaries start at $ 17.50 per hour, with healthcare benefits, equity, and opportunities for advancement. They have a huge and growing population of workers to draw on: there are currently between 2 and 3 million non-medical care professionals in the US. HomeHero followed by announcing that they were giving all of their workers W-2 status, with healthcare and benefits, on 1 March. Josh Bruno, the 29-year-old who startedHometeam,told me that they have used employees – not contractors – since the beginning, in July 2015. They currently have over a thousand actively working in four states on the East Coast.
Personal drive
The founders of these companies tell touching personal stories about revelations they had while struggling to care for their own families. For Sternberg, the lightbulb moment came when he was around 35: visiting his mother in Connecticut, he discovered that her driving had slowed to a crawl. For Bruno, it was the experience of watching his family trying to coordinate care for his nonagenarian grandfather. Bruno left his job and started volunteering at home healthcare agencies, convinced that he could learn how to create a company that would do it better.
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It makes sense that young entrepreneurs would want to disrupt the home healthcare industry, which is valued at $ 80-100bn per year in the US and employs tens of thousands of contract workers across different local agencies. But there are other, more systemic reasons why these startups are well positioned to raise funds and to continue to expand.
New provisions of the Affordable Care Act, which became effective only in April, mean that hospitals will have incentives to coordinate post-release care for their patients. Whereas previously hospitals were reimbursed for such procedures on a case-by-case or a fee-for-service basis – reimbursed by Medicare for each treatment that a patient received – under the new arrangement, a hospital will only be allotted a certain amount of money to pay for treatment of a health issue such as a joint replacement or heart surgery.
This means that hospitals will be penalized if their patients are readmitted, meaning hospitals and insurance companies now have a real incentive to improve care after procedures.
The kinds of services that Honor and Hometeam provide have always been regarded as “non-medical”: the workers who deliver it do not need to have medical training, and are actually prohibited from administering any actual medical care. In the case of Eleanor, whom I visited in the Bronx, her daughter Carol comes once a week to lay out her pills. Her caregivers can only ask “Did you remember to take your pills?” but cannot legally instruct her to take them.
Until now, this kind of care has been performed by very low waged contract workers hired through agencies, and has not been seen as part of medicine or as eligible to be covered by medical insurance.
Ronald Greeno is an in-patient doctor who has worked in Los Angeles for 30 years. He sees this changing, and thinks this is part of what the investors backing the new startups are betting on. “There’s an emerging realization that homecare is healthcare at its most basic. The most basic elements are getting individuals to care for themselves. Are you eating right, exercising, seeing a doctor when we need to, getting the right preventative care done, and so on? That is the essential element of healthcare, and by the way the most cost effective.”
For now, individuals like Alan and Toby, or like Eleanor and her daughter Carol, seem happy to bear the expense – and even to adopt the rhetoric of friendliness that characterizes the relations of employers and employees in so many “disruptive”industries – from ride sharing to co-living spaces.
On the day when I visited Eleanor, she was giving her Ghanaian home health aid, Serwa, instructions on how to prepare sweet potatoes with marshmallow for the Jewish Passover holiday the following week. As Serwa moved around the kitchen, Eleanor beamed: “It will be her first Seder.”
How care apps for the elderly could disrupt tech"s obsession with youth
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