HomeHero converting senior caregivers to employees

Switching from an independent contractor model, HomeHero to look more like competitor Hometeam

As startups confront the drawbacks and benefits between independent contractor (1099) and employee (W-2) models, one company has decided to switch to the latter.

HomeHero, provider of senior home care through an online marketplace, today announced a pledge to convert all of its 1,500-plus caregivers from independent contractors to company employees. After reaching out to see if I can get a further explanation for why they’re switching models, I recieved this statement from the company's CEO Kyle Hill over email:

"Up until this point, we have operated under a domestic referral agency safe harbor that exists in California and many other states, but not all states. Given we have an aggressive business model that requires national expansion, the switch to W2 helps us ensure a consistent client experience in all geographic areas. We want our caregivers to feel part of HomeHero and it’s only fair to employ them as our own."

The other, much larger question is whether this is indicative of a broader shift across the collaborative economy or if it’s simply a necessity for healthtech.

Hometeam, one of HomeHero’s similarly-named competitors, is already staffed by full-time workers who get health insurance, performance-based pay increases, and opportunities for career growth. Additionally, the company says its caregivers have an average of five years of experience, must interview and provide references, must be certified to be registered nurses, and all are fully insured.

As I wrote when Hometeam secured $5 million in new funding from Kaiser Permanente Ventures, one can see why this model makes sense for health-based sharing economy marketplaces. Providing care to seniors, for example, requires more specialized skills and experience than simply driving around the city or performing errands.

Investors are betting big on the market need for these companies. While Hometeam has raised $38.5 million from IA Ventures, Lux Capital, Recruit Strategic Partners, and Oak HC/FT, HomeHero has raised $23 million from Graham Holdings Company, Social+Capital Partnership, Tencent Holdings, and the Launch Fund. As for their headquarters, Hometeam is in New York City and HomeHero is in Santa Monica, Calif.

In addition to the announcement about its caregivers, HomeHero also unveiled a new care management platform called HomeHero Collaborative, which uses data collected from in-home visits and analytics to refer patients to providers (hospitals and/or health plans) that are part of the platform.

The company also launched an iOS app (compliant with the Health Insurance Portability and Accountability Act), which allows customers to search for and select a caregiver after watching video interviews and track the health status of the family member receiving care through GPS check-ins, audio messages, photos, videos, and more.

As is typical with this kind of senior home care, HomeHero’s caregivers offer non-medical assistance with any number of tasks that are difficult for the person receiving aid. Examples include shopping, running errands, preparing meals, helping with exercise, housekeeping, companionship, and personal care.

HomeHero says it has provided over a million hours of care since its launch in 2014.