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Leaders of major home care companies don’t operate in a vacuum. Rather, many use competitive analysis to stay one step ahead.
In general, a competitive analysis is a benchmarking tool.
“Many healthcare organizations use competitive analysis as a benchmark to see where they stand or how they are performing relative to similar organizations in their area,” Creamon Moore Jr., president and CEO of American Advantage Home Care, told Home Healthcare News. “This is used as a way to determine whether you are similar or different to your competitors and whether those differences can lead to a competitive advantage.”
Based in Dearborn, Michigan, American Advantage Home Care provides skilled nursing, rehabilitation and specialty care services. The company currently serves seven counties in southeast Michigan with a patient population of 200.
For Cypress HomeCare Solutions, competitive analysis is a process similar to a conversation between friends.
As a member of the Arizona Home Care Association, Bob Ross has been able to interact with other members and learn more about what’s going on in the organization, and vice versa.
“We want to talk to each other and find out what each other is doing,” Ross, co-founder and managing partner at Cypress, told HHCN. “What enterprise software solutions are you using? How are you onboarding caregivers? How have you streamlined your process? What language do you have in your contracts? What are the penalties if you kidnap a caregiver? We have all these discussions with each other. We realized we couldn’t do this alone.”
Founded in 1994, Cypress is a home care company that offers personal care, dementia programs and more.
In addition to talking to its home care peers, Cypress is also using the “secret shopper” approach — and it’s not the only company using this technique.
The main areas the company looks at when conducting competitive analysis are pricing of services and wages of caregivers.
“When I started in the industry in 2003, our rates were $14 per hour,” says Ross. “In 2013, it was $17 per hour. In 2019, it was $27. And now, our rates are $40 per hour. We’ve had to increase our rates because labor costs have gone up 40-50 percent. If there was ever a time when we needed to do a competitive analysis, it’s now. And we try to do one at least once a year to really get a sense of where we should be aiming in terms of caregiver wages and pricing.”
Best of Care CEO Kevin Smith uses competitive analysis to see where opportunities lie, specifically what services are less common among providers.
“Competitive analysis at our company starts with a general understanding of all the companies in the geographies where we operate,” he told HHCN. “From there, myself, and several other leaders at our company, look at what other companies in the space aren’t doing, not necessarily what they’re doing. In other words, we look at competitive analysis through the lens of opportunity, not overlap.”
Best of Care, a Massachusetts-based private home care agency, works with both Medicaid and private pay clients. The company serves more than 1,500 clients in the state through its 500-plus caregivers.
When conducting competitive analysis, Best of Care focuses on geographic coverage, pricing of services, new and emerging companies and concepts, and more.
“In many states, there are new home care agencies out there all the time, mostly because the barriers to entry are low. So it’s not necessarily just these new companies or startups that we’re looking at, but maybe what their approach is and how they position their product, which is home care for the end user,” Smith says. “How they decorate or present that product, whether that’s tiered packaging, subscription membership, whatever. At this point, we’ve seen it all. But there continue to be new and exciting ideas and products coming onto the market.”
The process helped Best of Care determine how to diversify its service offerings and where to put its resources, which led the company to realise that not many of its peers were implementing short-time work – an area that Tribute Home Care CEO John Sneath recently identified as a largely untapped opportunity.
“What we’ve found through analysis over the years is that it’s often more effective to take an existing product and continue to refine it to make it a little more attractive to the market,” Smith said. “For example, we offer short shifts to the community. A lot of providers want to come in with some kind of burdensome minimum number of hours to meet or streamline the costs of running their business. We have the advantage of being a legacy provider that has always run hourly or short shifts for our clients.”
Smith noted that Best of Care stands out among its competitors by offering reduced-hours.
Competitive analysis has helped American Advantage Home Care identify referral patterns.
“We focus on the number of Medicare referrals we get and try not to look too deeply at what other companies are doing,” Moeller says. “We specifically want to maintain our own identity and not base our approach, marketing, outreach or even service development on what other companies are doing.”
By focusing on referral patterns, the company now knows where to focus its efforts.
“For example, if we look at a particular physician who refers 500 Medicare patients in a given year, we see that they refer about 40 patients a month,” Moore says. “Looking at who that physician refers to helps us understand that they may not be the physician we’re targeting for our home health business because they’re referring to a designated provider. If we have a physician who refers to multiple agencies, that opens up possibilities for us.”
Like many of its peers, Family & Nursing Care is focused on pricing, but other areas have captured the company’s attention over the years.
“We want to know if there’s a weekend differential or if they offer shifts that are less than four hours,” Neil Kersban, CEO of Family & Nursing Care, told HHCN. “Do you charge clients overtime if a caregiver works more than 40 hours a week? Do you charge credit card fees? Things like that. Usually people are a little hesitant to share everything, but you can usually get the rates and other information. If you want more information, you have to take a secret shopping approach.”
Maryland-based Family & Nursing Care is one of the largest privately-funded home care companies in the Washington, DC area. Currently, the company provides just under 41,000 hours of care per week.
Ultimately, Kurzban believes it’s important for leaders to recognize their company’s place in the larger home care market.
“Some companies always want to be in the middle of the bell curve, some want to be intentionally high priced, some want to be the low-cost provider,” he said. “I think it’s a smart business practice to know where you are relative to others in your market.”
