Secret Shopping And Competitive Analysis: How Home-Based Care Providers Use Their Peers To Get Ahead

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Leaders at top home care companies aren’t operating their businesses in a vacuum. Instead, many are utilizing competitive analyses to stay ahead of the curb.

Broadly, a competitive analysis is a benchmarking tool.

“​​A lot of health care organizations use competitive analysis for benchmarking to see where they are, or how they are performing versus other organizations that are similar to them in their region,” Cleamon Moorer Jr., president and CEO of American Advantage Home Care, told Home Health Care News. “It’s used as a way of determining if you are similar or different from some of the competition, and if those differences result in a competitive advantage or not.”

Based in Dearborn, Michigan, American Advantage Home Care provides skilled nursing, rehab and specialty care services. Currently, the company serves seven counties in the Southeast Michigan area and has a census of 200 patients.

For Cypress HomeCare Solutions, competitive analysis is a process akin to talking among friends.

As a member of the Arizona In-Home Care Association, Bob Roth has been able to connect with other members and learn more about what’s happening at their organization, and vice versa.

“We talk amongst ourselves and want to learn what each other is doing,” Roth, co-founder and managing partner of Cypress, told HHCN. “What enterprise software solution are you using? How are you onboarding caregivers? How have you streamlined processes? What kind of language are you writing into your agreements? If someone were to poach a caregiver, what is the penalty? All of these types of discussions, we have with one another. We realized that we couldn’t do this alone.”

Founded in 1994, Cypress is a home-based care company that offers personal care, dementia programs and more.

In addition to speaking with home care peers, Cypress also utilizes the “secret shopper” method. The company isn’t alone in using this method.

Some of the company’s main areas of focus when conducting competitive analyses are pricing of services and caregiver wages.

“When I got into the business in 2003, our price was $14 an hour,” Roth said. “In 2013, our price was $17 an hour. In 2019, our price was $27 an hour. Now, our price is $40 an hour. With the cost of labor being up 40% to 50%, we’ve been forced to raise our prices. If there’s any time we need to be doing competitive analysis, it’s right now, and have a cadence to do it at least once a year to really see where we need to be as relates to caregiver wages, as well as pricing.”

Best of Care CEO Kevin Smith uses competitive analysis to discover where the opportunities are. Specifically, what services are less common among providers.

“Competitive analysis at our company sort of starts with a general awareness of all of the players in the regions where we operate,” he told HHCN. “From there, myself – along with a couple of the other leaders of the company – look not necessarily at what the other players in this space are doing, but perhaps what they’re not. In other words, we look at competitive analysis through the lens of opportunity, as opposed to redundancy.”

The Massachusetts-based personal home care agency Best of Care works with both Medicaid and private-pay clients. The company provides services via its 500 plus caregivers to over 1,500 clients across the state.

When conducting competitive analysis, Best of Care has focused on things like geographic range, service pricing and new, and emerging companies and concepts.

“There are always going to be new home care agencies because it’s such a low barrier to entry, for the most part, in many states, so it’s not necessarily just these new or emerging companies that we’re looking at, but perhaps what their approaches are and how are they positioning the product, which to the end-user is still home care,” Smith said. “How are they dressing up or presenting that product, whether it’s through tiered packaging, subscription membership, you name it, we’ve sort of seen it all at this point. But there still continues to be new and exciting ideas and offerings hitting the marketplace.”

This process has informed the way Best of Care has chosen to diversify its service offerings, and where the company has decided to place its resources. This led the company to discover that not many of their peers were delivering short-hour shifts — an area that John Sneath, CEO of Tribute Home Care, recently identified as a largely untapped opportunity.

“What we’ve found through our analysis over the years is, oftentimes what can be more effective is to take your existing product and continue to refine it, and make it a bit more appealing to the market,” Smith said. “For example, we offer short hours to the community. A lot of providers want to come in with a sort of burdensome minimum number of hours, in order to satisfy or rationalize the operational cost of their business. We have the benefit of being a legacy provider who has always performed these one-hour or short shifts for its clients.”

Smith noted that offering short hour shifts makes Best of Care stand out among competitors.

At American Advantage Home Care, competitive analysis helped the company identify referral patterns.

“We look at the number of Medicare cases that are referred, and we try not to dig too deeply into what others are doing,” Moorer said. “We, specifically, want to continue to have our own unique identity and not base our approaches, marketing, outreach, or even service development upon what others are doing.”

The focus on referral patterns helped direct the company to where it should be focusing its efforts.

“When you’re looking at a particular doctor that may refer, for instance, 500 Medicare patients in a given year, you know that’s about 40 patients a month that are being referred,” Moorer said. “You’re looking at where that doctor is referring to, so it helps you to understand, maybe that’s not a doctor we go after for home health business because they have a designated provider that they refer to. If there’s a doctor that refers to multiple agencies, that opens things up for us.”

Like many of its peers, Family & Nursing Care is also focused on pricing, but over the years, other areas have piqued the company’s interest.

“We want to know if they have a weekend differential, or if they offer less than four-hour shifts,” Family & Nursing Care CEO Neal Kursban told HHCN. “Do they charge the client overtime if the caregiver works more than 40 hours a week? Do they have a credit card fee? Things of that nature. Usually people are going to feel a little too uncomfortable sharing all of it, but usually you can get the rates, and then one of those other things. If you want to get more, you have to do the secret shopping approach.”

Based in Maryland, Family & Nursing Care is one of the largest private-pay home care companies in the Washington, D.C., area. Currently, the company provides just under 41,000 hours of care per week.

Ultimately, Kursban believes that it’s important for leaders to be aware of their company’s place in the larger home-based care market.

“Some companies always want to be in the middle of that bell curve, and some want to intentionally be priced higher, and some want to be the low cost provider,” he said. “I just think it’s a smart business practice to know where you stand relative to others in your market.”