Life’s going to be interesting in the UK care market

Housing 21 is a not-for-profit social housing landlord that has acquired the quoted homecare provider Claimar Care. You might wonder why this is interesting.

Reason one – you don’t often/ever get a non-profit organisation acquiring, via a takeover, a listed company. Reason two – it illustrates the potential of the care market for radical consolidation.

Domiciliary care is getting the same “one way bet” feel about it as residential care had prior to the credit crunch. Then companies were acquiring property assets funded by a perceived guaranteed income streams (i.e. property prices keep going up and there will always be old people).

Now companies see the combined desire of older people and government to “age in place” as the signal that this sector will become a sure fire winner. Individuals because they want their familiar surroundings, the government because it is the cheap option).

It remains to be seen whether or not Housing 21’s entry into the market will pave the way for other housing associations to become involved in the domiciliary sector. Already some of the not-for- profits do provide these types of services.

Most domiciliary care providers are very small, often local, family run companies. The guy that runs one of the larges companies reckons there are 3,000 care providers.

Now here is the big contradiction - or shall we say “challenge”. On one had local government and the local health trusts would sooner deal with a couple of large companies. However, the trend is for individuals to be given the ability to select where they acquire their care. This will undoubtedly be accelerated by the incoming Tory Government.

The marketing challenge is that you have companies that are used to being B2Bs (i.e. selling contracts to government or quasi government institutions) having to acquire a new set of skills and become B2Cs selling directly to consumers. It is even a bit more complex than that because there is/will be a protracted period when they will have to be both.

Such a situtation would try the resources of any marketing savvy organisation. Most care providers aren’t that marketing savvy or certainly don’t have a consumer conscious culture.
Interesting times ahead. Dick Stroud