Business in Vancouver
April 28, 2009
Aging population generates boom in B.C.'s home health-care sector and need for trusted brands
Nurse Next Door to double franchises within the year as the Vancouver company expands into Ontario
by Glen Korstrom, Business in Vancouver
Premier Gordon Campbell’s recent speeches have hinted at how huge health-care costs will be in coming decades.
He usually drives the point home by saying that health care will absorb 90% of all new B.C. government operating spending for the next three years.
Nurse Next Door founder John Dehart hears opportunity in Campbell’s speeches
“I thought, ‘Wow! If that’s happening today, what’s going to happen in five to 10 years when the demographics really start to shift in this province?’” said Dehart.
The BC Liberals have increased provincial health-care spending to more than $15 billion in the current fiscal year from $14.2 billion in the year ended March 31, 2008. Campbell expects health-care spending to jump to $15.7 billion in the fiscal year that starts April 1.
Dehart believes the funding won’t be enough to meet B.C. seniors’ home health-care needs.
His venture has enjoyed exponential growth thanks to increased demand from seniors for private home health support.
Two years ago, Nurse Next Door had two franchisees. That grew to 12 by February 2008. Today, Dehart has 23 franchises, and he expects that number to double within the year in part because of a new push to expand into Ontario.
He declined to reveal company revenue, but Dehart and other franchisees combine to employ about 700 casual staff. That’s up from 200 a year ago and 60 the year before that.
Dehart believes that increasing demands on government health-care resources will leave seniors out of luck when they apply for public funding for home health care.
Dehart pointed out that only needy seniors get government-subsidized home health-care assistants. He added that they usually get that help for only two hours a week – far short of what they require.
Dehart predicted that wealthier seniors will be forced to look to private-sector companies to fill the void. This is where he believes he has the opportunity to establish a brand that’s synonymous with being a trusted home health-care provider.
Dehart has hired franchising gurus such as Vancouver’s Cameron Herald, who helped 1-800-Got-Junk? LLC become dominant in the unregulated junk disposal industry, to sit on Nurse Next Door’s advisory board.
Government doesn’t regulate the home health-care industry. Private caregivers are therefore not required to conduct the same criminal record checks that registered nurses must pass.
That heightens the need for due diligence, said Michelle Braun, who opened a Nurse Next Door franchise in North Vancouver in December.
Five months earlier, North Vancouver caregiver Maureen Jordan was sentenced to a two-month conditional sentence and two years’ probation for stealing cheques from a 73-year-old terminally ill cancer patient and writing $1,200 worth of unauthorized cheques to herself.
Braun believes such cases demonstrate the need for a trusted brand for home health-care delivery.
She crunched numbers and determined that paying a $30,000 one-time franchise fee and 5% of her revenue in royalty payments was worth it.
Nurse Next Door promises that all its caregivers:
- have passed criminal record checks;
- do not have tuberculosis; and
- are fully insured so the senior will not be at risk if the caregiver trips and falls.
Shaun Karp, who expanded his 17-year-old Karp Health Services to include a Karp Home Care division three years ago, pledges the same thing.
Karp’s homecare division increased revenue by 30% last year – far more than the 5% growth for Karp’s physiotherapy and personal fitness training divisions.
Still, he believes it’s tougher for an entrepreneur to succeed at home health care than Braun and Dehart let on.
Vancouver Coastal Health steers patients to a limited number of home health-care providers, such as Bayshore Home Support, Drake Medox Health Services and Classic Caregivers Ltd.
VCH signs multi-year contracts with the companies, and Karp said it can be hard for a startup company to become one of VCH’s preferred home health-care providers.
“The reality of the industry is that it’s not that rosy,” he said. “You have to work and you have to spend money in order to generate sales.”
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