Like most US companies, we braced for the worst in March and April as state after state implemented draconian measures to deal with Covid-19 including shutting down full sectors of the economy. The benefit of hindsight may well suggest that 2020 will go down as one of the biggest overreactions to a pandemic ever. We’ll leave it to the pundits to sort it out.
What we know for sure is the essential business of in-home senior care has demonstrated incredible resilience despite inaccessibility to clients in locked down facilities, unemployment incentives that enticed caregivers not to work, and overall fear run amok. These negative factors that temporarily impacted financial performance are now having the reverse affect.
With greater awareness of the premature elderly death risk posed by infectious diseases common in institutional care settings, families are now opting for the safer alternative of one on one in-home care. While most caregivers showed up in their vulnerable client’s time of need, those who opted for unemployment benefits are now back. This is coinciding with an increase in caregiver applications among displaced workers seeking employment opportunities in essential industries. Ever expanding demand over the past decade for in-home senior care services has put ongoing pressure on the supply of caregivers. Some of that pressure is being relieved.
Given the local and highly personalized nature of in-home senior care, many top performing providers are run by actively involved Managing Owners. Those preparing for retirement now have potential successors in the form of corporate executives in career transition and business owners in severely impacted industries seeking new opportunities in essential sectors. These investor-operators now have access to historically low interest rates to finance acquisitions at a time when demand and supply are at unprecedented levels.
Covid-19 has been tragic not only in the loss of life but the loss of livelihoods. One silver lining is the recent high awareness among investors as to the essential nature of home care in the continuum of care and in protecting our vulnerable senior citizens.
