On Friday, HomeHero, a “home care industry disruptor,” announced they were closing their business. The organization sought to provide affordable in home care by contracting caregivers instead of employing them through a typical agency model.
Home Hero was started by Kyle Hill in 2013 as a way to provide more affordable home care to the rapidly rising number of seniors choosing to age in place. Hill viewed agencies as “being grossly inefficient” and costs of care being too high, so he created an online platform to connect caregivers directly with clients. By eliminating the agency connection in the middle, HomeHero was able to charge clients less and pay caregivers more.
The model was largely successful until regulatory changes in October 2015, when the Department of Labor ruled that home care workers needed to be moved to W2 employees instead of 1099 contractors. The success of HomeHero hinged on being able to pay their workers as contractors instead of employees, but the company was able to modify operations in the months that followed to continue challenging industry standards.
When the Founder of HomeHero realized the company wouldn’t be able to fundamentally change the way the home care industry functions, he decided to shut down and focus on other ways or “promoting health and wellness in the home.”
In his article for Medium detailing the closing of Home Hero, Hill details several reasons the home care industry needs to be shaken up and a few reasons home care agencies are more successful than HomeHero. He noted HomeHero was able to pay caregivers more while charging clients less and that the business “created a more user-friendly client intake flow.” Hill also noted that he was forced to compete with local agencies who were dedicated to their marketing efforts and were able to talk to potential clients after being discharged from hospitals or care facilities.
Check out Kyle Hill’s full article on Medium for more information about HomeHero’s departure from the caregiving scene.