FirstLight Franchise Blog

Home Care Franchise Versus Senior Care Franchise?

Home care versus senior care, medical care versus non-medical care; the home care industry is often thought of having two defined segments.  Both types of services are of equal importance; the choice between the two is merely based on the individual needs of the client or patient. Some companies provide both medical and non-medical homecare services. FirstLight Home Care chooses to focus solely on non-medical care for two main reasons:  There are, in fact, many risk factors now potentially associated with medical in home care that are not prevalent in non-medical in home care, (Medicare and Medicaid changes, long term insurance reimbursements, increased licensure and insurance mandates, just to name a few).  Additionally, part of our mission is to be the very best quality provider of non-medical services in the industry.  To do that, we need to focus our efforts and expertise.  At FirstLight we have a very good working relationship with medical homecare companies; they often refer us to their clients in need of non-medical care and we reciprocate by referring our clients seeking medical care to them.

When it comes to franchise models, there certainly are some significant differences between medical and non-medical models.

Medical (Homecare/home healthcare): Franchise owners providing this type of care are often required to obtain a much more rigorous licensure. Medical care franchises have higher insurance costs, (workers comp, liability, etc.), due to medical procedures they perform and the increased risk those procedures carry with them. For medical care services, the government and insurance billing companies take longer in their billing process, which can be anywhere from 60-150 days. As such, receivables take longer, meaning you must “float” payroll and other operating expenses, and often spend enormous amounts of time and paperwork in order to be paid.

For medical care services, there is more training involved in terms of employee training, and scheduling can be more complex. This often results in higher labor costs for the franchise owner. Training and scheduling are very important in providing excellent service and care, so labor costs aren’t something that can be compromised. Staffing for medical care often means nurses, which are already in high demand. Pricing differentiates greatly between medical and non-medical care as well. For medical care, prices are often affected by what the government or insurance companies dictate. Scheduling and operations can be challenging. In medical care, caregivers are often scheduled on 15-30 minute increments, when often they are in the home to administer medications or change bandages, and then leave. Caregivers often visit 12 to 18 people each day. In the non-medical industry, those numbers look very different. Overall, the medical industry is a very mature industry with fewer growth opportunities for the future and more challenges in terms of franchise ownership.

Non-Medical Care Service: The majority of services are “private pay”.  While pay and bill rates are lower than medical in home care, pricing and margins are more controlled by the business owner for the services offered. The non-medical care industry tends to charge hourly with client visits lasting much longer than medical homecare providers, (usually several hours a day). Our visits usually last longer due to the services we provide such as, companionship, grocery shopping, cleaning, bathing, cooking, etc. Our visits are more individually focused for each client, making their experience more personable. While most states require some licensure for non-medical companies, most states are inexpensive compared to medical licensure. There are little federal restrictions and/or regulations.

Because our caregivers are not required to be nurses, our labor costs are lower compared to medical care, while typical margin percentages are equal or more than medical care. Insurance costs tend to be three to four times lower than medical care models. Overall, the non-medical homecare franchise industry is young and will continue to grow for years, with some sources citing less than a 15% awareness level of our services.  Moreover, the non-medical industry was estimated at $75 billion in 2013 with 40% projected growth by 2017! This non-medical franchise industry is considered to be the fastest growing part of the healthcare continuum.

If you’d like more information on the non-medical franchise homecare industry, sign up for our webinar and learn more about the franchising industry in general, as well as the home healthcare sector. To receive information about possibly becoming a FirstLight Home Care franchise owner, download our franchise information kit, hear what our franchise owners have to say, or just give us a call: 1.866.985.5348. We’re happy to answer any questions you may have to help you on your path to franchise ownership and achievement!