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state of the nation

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Canada is getting older.

Fourteen per cent of the population is above the age of 65, and by 2036, that number is projected to increase to 25 per cent. As hospital stays get shorter, home care is being touted as an efficient alternative.

Ontario Health Minister Deb Mathews said as much in the provincial legislature in March, 2012. "Home care is where we can get the best value for money and the highest quality of care for people."

According to the Ontario Home Care Association (OHCA), the daily cost of providing a hospital bed is $842, and for home care it's only $42. But the demand for home-care services outstrips government spending, opening the door to franchise companies and startups. According to a study done by the Health Council of Canada in 2008, an estimated 500,000 Canadians were buying home-care services annually.

The Canada Health Act does not prohibit private delivery of health-care services, so there are fewer barriers to entry. The home-care business also comes with a relatively low start-up cost, since it is a service-based industry. There is, however, a high cost associated with staying in business.

"Over time we have seen consolidation of companies," says Sue Van der Bent, CEO of the OHCA. "We have seen the growth of small companies, like the beginning of franchises. That sort of growth I'd say is greater than the big companies."

Governments are increasing their commitments in response to the rising need. The federal government is spending $30.3-billion on health care this year, and $40-billion every following year for the rest of the decade. While only 4 per cent is allocated toward home-care services for 2013, that is slated to rise to 5 per cent of the total health-care spend in 2014.

"It's becoming a rougher marketplace as the economy starts moving," says Stuart Cotrelle, CEO of Bayshore Home Health, an Ontario-based provider of home-care services with offices across the country. "We have to look at how we're creating programs. We're looking at how we're bringing people back into the work force. We're looking at a number of things so we can meet up with that demand."

The private sector home-care business is much different from institutionalized health care. Seniors want to spend their twilight years at home, surrounded by their family, so they can maintain their freedom and dignity. Studies have also shown that people recover better at home.

There's also been a shift in the nurse's role, which has become broader, and more demanding. Serving as a nurse in a home-care situation requires a more holistic and personable approach.

"There is a disparity in the employment conditions between hospital and home care," says Barbara Mildon, president of the Canadian Nurses Association. "If we looked in many situations across Canada, the home-care nurses may be paid less. They will need to use their own cars even though there is some compensation for that. Work hours will be different, and even their patient arrangement can be different and that's because the sectors generally are independent of each other."

The process involves a restructuring of how they delegate job functions. "Things that physicians used to do, nurses are doing. Things that nurses used to do, we have professional staff doing. That's a huge continued movement that's going to happen.

"It's the only way to maintain affordability," Mr. Cotrelle explains.

Chronic disease management, for example, is something more nurses are taking responsibility for.

Bayshore is a privately held company, and it has been contracted by government to provide services. While just about anyone can start a home-care company, earning a government contract is no small task. A company must have strict quality control systems in place to ensure it's delivering top-notch services.

Providing to government means meeting strict regulations, unlike launching a startup or franchise system. A government contract is a tendered process with a long list of criteria. A non-government contract is smaller and involves less risk. "There's a lot of competition that keeps gross margins low, and you have to do a lot of things below the gross margin line in this business," Mr. Cotrelle says.

"As a private company we have maintained double-digit growth for the past 10 years, but that's been largely because we have some very simple strategies."

Those include figuring out how to deliver a service hour with the maximum amount of labour while minimizing everything else. The company does this by using better software, allowing it to reduce paperwork. Bayshore spends a lot on upgrading its computer systems and adopting new technology.

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