NewCo Shift Forum
Why can’t society take care of its elderly? Seth Sternberg thinks he has a solution
There’s a particular class of companies in the world I like to call “Total NewCos.” These are firms attempting to solve massive and intractable social problems through the application of technology and innovative business models. In the past we’ve covered many of these kinds of companies, including AltSchool and Grail Bio. Joining those ranks today is Honor, brainchild of entrepreneur Seth Sternberg. He presented Honor, which is attempting to reinvent the home senior care market, at the NewCo Shift Forum earlier this year. Below is a video of his presentation, and a transcript, edited for clarity.
Seth Sternberg: Hello, everybody. How are you doing today? Thank you, John, for having me. Appreciate it. I want to take you guys quickly through Honor. I’m one of the co-founders and the CEO.
It starts with a story. I went to Connecticut and I visited my mother, and she picks me up at the airport, and as she was driving us home, she was driving slower than she usually drives. This is weird because my mother used to get speeding tickets in Montana, which is hard to do if you guys know Montana. I said, “Mom, why are you driving so slow?” She said, “Well, Seth, driving is harder than it used to be.”
That got me just looking into, ooh, my mom lives in Connecticut. She loves her home. What happens five years from now?
I discovered that we’re really no better off on helping the elderly remain in their home as they age than we really were 25 years ago when we were working with my grandmother. That spurred Honor. The goal of the company is to help our parents remain at home with joy, comfort, and grace as they age.
The way we’re doing that is we’re remaking non-medical home care. That’s where someone goes into your parents’ home and helps them with something called activities of daily living, so things like getting out of bed, getting food, and getting dressed. The best way to really understand it is this video.
Andrew Houston: As our parents and grandparents get older, you get a little bit more concerned about them. If you’re a busy professional like myself and you’re working and you have other things going on in your life, it’s hard to make time yourself to help them out. Having a care professional was a good way to fill that gap.
Cornelius Houston: My name is Cornelius Houston. I really love my caregiver now. She’s been very helpful for me. I can’t say enough good about Josetta. We’re not used to having anyone just come in the house at all, no more than family. Josetta makes me feel comfortable with her here.
Josetta: My clients feel like family to me. [laughs] It doesn’t matter who you are. If I see that you need help and I can assist, I’ll do it. That’s just me.
Andrew: The companion element surprised me a little bit, that a care professional can just come in, do their job, and leave. To have that added layer of someone who really cares about their clients is something that is very enticing to me. Because of the app and the website, it just makes it really easy for me to book appointments and make payments.
Josetta: I think this is the best thing that they could’ve come up with, was this particular app, because it cuts out a lot of friction, if you will. Someone could be having a bad day, and you might get caught in that moment with them. This just keeps all that at bay.
Andrew: Right after she’s done, I could read the review and see how things went for that day. It’s comforting. You know that somebody is there that you could trust, that you know has his best interest at heart.
My name is Andrew Houston, and our family uses Honor.
Seth Sternberg: As a society, we face a massive number of people who are aging very quickly. There are 40 million people over the age of 65 in America today. In 20 years, there will be 80 million.
Every day for the next 19 years, 10,000 people, just in the United States of America, turn the age of 65. Of course, probably like all of you, as people age, they want to stay in their own homes. The question is just, how do we do that? How do we make sure that people can stay in their homes as they age?
This industry, non-medical home care, that’s supposed to help people is rather broken. There are 50,000 agencies across the United States of America. No one owns more than one percent of the market.
It’s so fragmented that when care pros are sick, they’re still sent to the elderlies’ homes, which obviously none of us would want for our parents. Fraud rate is off the charts, and there’s absolutely no data. Yet, it’s massive. It’s a $30 billion industry.
The need is that great, but the product is that bad, and that’s why I hope to fix this and be in Connecticut in time for when my mother actually really needs us.
The question is just, how do you fix it? What do we do? I think it starts with the care professionals. It starts with Josetta.
We’re a Silicon Valley company, tech backbone, but our product is actually the care pros. The people that we have to make amazing for our customers to love Honor are the people who go in every day into the elderlies’ homes and help them, then our customers will love us.
What’s incredible is there are two to three million of these people in the United States of America. The problem is that 56 percent are on government assistance programs. That’s how poorly these people are treated by our current system.
To make home care great, we have to make their lives substantially better, and we have to figure out how to do that. We should do it quickly, because in 20 years, there are going to be five to six million of these people. What’s awesome is that that’s massive job creation. We have to make sure that it’s an incredible job that people want to go into as these roles open up.
How to do it? The first thing that we focused on was enabling our care pros to be excellent. Give them superpowers.
It’s through simple things, like enabling them with customer profiles, knowing the person they’re going to talk to before they walk in the home, or a care plan to follow. Really simple things that make someone excellent.
Maybe even more important when you’re thinking about how technologies can help make humans excellent, just like Google Maps, I think, probably makes everybody in this room a little bit better at your daily life, is to think about how to put someone in a position where their skills and their abilities shine.
If someone’s allergic to cats, we shouldn’t send them into a home with cats. If someone is trained in working with someone who has dementia, let’s send them to someone’s home who does have dementia, because they can shine at a skill that they earned. In fact, they can probably earn a higher wage because that’s a special skill that consumers are willing to pay more for.
It turns out that there are hundreds of these variables. Things like, does your mother have diabetes or dementia or a language preference, just schedules, or the ability to help lift someone who’s heavier-set, who might need help getting out of bed and getting into a wheelchair.
You can take all of those variables. You can run them through a machine-learning server to figure out how to construct the day, and then come out with an outcome that’s optimal for the care pros and for the customers. That makes everybody’s experience fundamentally better.
If you think about how to make the care pros’ lives substantially better so they can be better at serving their customers, the elderly, the most important thing is to enable them with a better experience and better tools so that they can be excellent at their job. That’s really the core of what we spend the majority of our time on at Honor.
This very large profession, with millions of people in it.
Let’s give these people a better experience, enable them with better tools, and at the same time, really focus not just on the pay rate, which Honor does focus on — we actually take the savings that we earn through technology and redirect that into people’s hourly income — but also think about how many hours per day someone’s earning.
If someone’s, let’s say, earning $15 an hour, it matters more that they get eight hours a day if they want eight hours, and not five.
Because that’s a huge shift on how much earnings you actually get at the end of the week. How many hours of yours were you able to fulfill? If you do that for the care pros, if you make them excellent and enable them, then you deliver better service to the customers.
Here’s something I want to close on. I’ve spent a lot of this chat explaining what Honor’s doing for the care pros. Another problem that we found looking at non-medical home care is it’s very expensive for the elderly, most people don’t even know it exists, and it’s 70 percent private pay, which is a real problem.
It means that, really, it’s the upper middle class and above who are able to afford non-medical home care in today’s world.
One of the first things we set to do is reduce that burden directly on the consumer. We’ve done two things so far that have been pretty effective. The first is that we’re working directly with health systems. We have multiple health systems throughout the state of California that now will refer into and pay for some level of Honor, thereby reducing the burden on the consumer.
The reason the health system’s doing that is they can give a better experience to the consumer, they can get a consumer out of the acute setting, the hospital, to home faster, which saves everybody money, delivers better care, and they can also help reduce readmission rates, which is awesome. Everybody wins. The health system wins, and the consumer wins.
The other thing that we’ve been pioneering is letting the consumer get just one hour a day of home care, if that’s what they want. In today’s world, without tech, the minimum is four hours a day. One hour at, say, $50 an hour is a lot cheaper than four hours at $25 an hour, and that’s put us into homes that traditionally could not afford home care.
It’s both helped the care pros, put them in a better place in their lives so that they can deliver better care, but also figure out how to use tech to make home care much more accessible to our consumers, the elderly and their families.
Thank you guys very much. That’s Honor.