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Three years after Honor acquired Home Instead, its goal is not to grow through franchise expansion or acquisition. Instead, it’s trying to find ways for current locations to double, triple and quadruple their current censuses.
In part, it plans to open up that opportunity through advanced technology, including artificial intelligence.
During a recent long and wide-ranging conversation with Honor CEO Seth Sternberg, we talked about how exactly the company would take these forward-facing tools, apply them to home care and successfully balloon home care owners’ businesses.
“We have no plan around opening 100 new offices or 1,000 new offices, right? The footprint is pretty good,” Sternberg told me. “The thing that we need to do is give the tools to our owners to be able to double, triple, quadruple their existing businesses. That looks like the right owners, with the right tool sets, that let them serve much larger swaths of the market.”
In 2024, Home Health Care News has finally cut through some of the noise around AI. We’ve got providers on the record talking about what pain points, specifically, they are planning to attack with AI solutions.
The conversation with Sternberg was a continuation of that.
Now that Honor and Home Instead franchisees are on better terms, there’s a level of excitement from each party on what will come next.
What comes next, particularly around AI, is the topic of this week’s exclusive, members-only HHCN+ Update.
Home Instead’s growth
Home Instead has over 1,100 locations across the world, and the largest home care footprint in the U.S.
Even then, it owns just about 5% of the market.
“Traditionally, home care has simply not scaled on a location by location basis, it just has never happened,” Sternberg said. “Since we started Honor, the whole theory was that you could leverage technology to actually enable locations to scale with high quality, to break the barriers that had always kept this to a completely fragmented industry.”
Leading up to the turn of the decade, prior to 2020, AI was generally thought of as a synonym for machine learning – “using information from the past to predict the future,” Sternberg said.
Now, generative AI – which ChatGPT utilizes, for instance – has opened up more doors when it comes to AI application.
“The wave of technology that’s coming around creating just better client experiences, better employment experiences – it’s just going to be massive,” Sternberg said. “And the level of technology investment into industries that previously have not had that kind of investment, that’s effectively going to shock everyone. Because generative AI uniquely applies to hyper human situations.”
The home care industry is no doubt one of those that has not been on the cutting edge of technology over the years, a factor that could have played a role in the friction between Honor and Home Instead franchisees post-acquisition.
Honor wants to change that now, though.
“We’re really focused on making sure that we stay ahead of the technology curve that’s happening,” Sternberg continued. “And I would argue that everyone else in home care has to be doing the same with their businesses, too. If they’re not fundamentally focused on the entire transformation of their business because of where technology is and where it’s going, they should be.”
Technology generally makes services “better” and “cheaper,” according to Sternberg.
After home care billing rates skyrocketed during COVID-19, home care leaders have been scrambling to mitigate the consequences of that.
Agencies can charge more to pass the costs onto the client, but that could end up in a loss of market share, and also many Americans with no place to go for home care. The ones that can’t pay out of pocket, but don’t qualify for Medicaid’s home- and community-based services.
“To solve all the myriad challenges to deliver home care cheaper is a very, very deep tech problem,” Sternberg said. “But it’s one that I’m definitely very excited about. And I think that you can use the kind of technology that we build to do [solve that].”
The goal is to create better jobs and lower costs for services.
On top of that, in a franchise system, you have to reach those goals without decreasing owners’ bottom lines.
Applying AI
Sternberg told me that Honor has 22 distinct AI algorithms working in the Home Instead network right now, all of which interface with each other.
I asked him if he thought that staffing would be the No. 1 pain point AI would address in home care. Not exactly, he explained.
Because health care – and home care – are so complicated, there are pain points everywhere. One client’s issue with a provider could be traceable to a back-office error completely off the radar. In essence, every issue creates another one. And that’s why viewing staffing in a silo is as problematic as addressing a patient’s care in a siloed manner.
“I think, unfortunately, technology has to solve all the problems, and they are married,” Sternberg said. “We have distinct systems solving discrete problems. And then they kind of ladder up, so that a care pro ends up liking their job more, and then provides better care to a client.”
One tool compares franchise owners’ businesses to the rest of the network – on outcomes, recruiting, retention and other measures. Another finds every referral source within a market, and suggests which ones the owner should get in touch with. A similar tool finds where potential new caregivers are in that market.
These are also self-learning tools, which ideally improve the more they are put to use.
“We have a team that talks to [franchisees] and says, ‘Hey, we see this happening in your business, this tool is the one you really need to dive in on now,’” Sternberg said. “This tool is the next to enable you to grow even faster. It’s very much about understanding [each] business uniquely.”
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