[Life Act 3 Companies] "Caregiver Contracts, No More Unstable Cash Transactions"

Kim Min-sik, CEO of Code Blossom

#Caregiver Mr. A recently experienced a frustrating incident. A patient he had been caring for at a hospital ran away without paying the caregiving fee, claiming they had no money. Since the patient had no family and the contract was not made through a service agency, there was no way to contact anyone. The effort he put in over several days went to waste.

In South Korea's caregiver market, payment for services is mostly made in cash. Kim Min-sik (34), CEO of 'Code Blossom,' a caregiver matching platform, explained, "Places where cash transactions still dominate tend to be markets where existing service providers continue rather than new suppliers actively entering. The caregiver market, mainly supplied by women in their 60s and 70s, is such a case." Because of this, many conflicts arise over payment. Caregivers often demand additional fees, or, as in Mr. A's case, patients frequently fail to pay.

To improve this practice, CEO Kim introduced a payment system into his service last year. Cash is not accepted at all. He explained, "Some caregivers are unhappy about losing control over pricing, but many appreciate not having to worry about unpaid fees. Patients like receiving payment receipts or confirmation documents, which make insurance claims or expense verification easier."

Majoring in business and accounting, Kim briefly worked at a distribution company after graduation and then ran a business selling and renting toppers for the elderly. Later, while studying at SEMBA (Social Enterprise MBA), a program jointly run by SK Group and KAIST Business School, he conceived the caregiver matching business. Having personally experienced the inconveniences as a patient guardian during a long hospital stay of a family member, he was motivated to start the business. Interested in platform businesses, he decided to launch after finding a concrete idea in caregiver matching. The company name 'Code Blossom' was inspired by the hospital term 'Code Blue.' While 'Code Blue' has a negative meaning indicating an emergency, 'blossom' symbolizes health recovery. The name reflects the wish for patients' health restoration.

Kim Min-sik, CEO of Code Blossom, is being interviewed by Asia Economy in the caregiver training space within the office in Gangnam-gu, Seoul. Photo by Park Yoo-jin

- How did you start the business?

▲ I began by managing a caregiver group at Seoul St. Mary's Hospital. It was a volunteer group run by the Catholic Archdiocese of Seoul. I went there for consultation in 2021 and ended up taking over management. We started with about 150 caregivers. Initially, I only planned the platform business, but after acquiring the caregiver group, I deeply considered their livelihoods and job characteristics.

- How did you raise initial capital for the startup?

▲ We received 50 million KRW in pre-seed funding from the venture capital firm 'Sopoong Ventures' and KAIST. Additionally, government early startup package grants helped us officially launch the business. Since the MBA is an entrepreneurial program, we developed the business model through monthly or quarterly presentations.

- I understand cash transactions among caregivers are a serious issue.

▲ It's a chronic problem that has persisted for a long time. Older caregivers tend to lack digital literacy and resist change. They prefer cash because income is not exposed. Since many suppliers are accustomed to the existing method, it is difficult to bring about change.

- Is it because cash payments are encouraged by offering cheaper prices?

▲ Many think so, but cash transactions tend to make caregiving fees more expensive. The patient's condition can change after admission. Caregivers sometimes arbitrarily demand additional fees based on the patient's condition during cash transactions, usually about 20,000 KRW more per day.

- How does the payment system operate? What changes have occurred since its introduction?

▲ We do not accept any cash transactions. When a patient's guardian pays for the service, they receive a payment receipt and settlement statement. Guardians are charged a 10,000 KRW daily fee. This has greatly improved payment stability. Previously, patients sometimes did not pay upon discharge or caregivers did not receive fees if the patient died. Cases where industrial accident processing failed led to legal disputes, causing unintended non-payment. The payment system has significantly reduced these risks. The service is also standardized with clearly defined work scopes.

- How have caregivers reacted?

▲ Guardians generally welcome it, but caregivers have strong resistance. They complain about losing control over pricing and income exposure. We are still persuading them. During caregiver training, we often get questions like "Why do we have to do this?" Many misunderstand government service provision reports as tax collection tools.

Kim Min-sik, CEO of Code Blossom, plans to raise Pre-A round investment in early next year. Photo by Park Yu-jin

- How is service standardization achieved?

▲ We clearly define the scope of work. Basic tasks include meals, hygiene maintenance, assistance with excretion, mobility, posture changes, medication management, and companionship. Medical procedures like suctioning (phlegm removal) and feeding (tube feeding) are excluded in principle. Personal errands, laundry, and massages are also not allowed. Caregivers cannot act as proxies for treatment consent forms or issue administrative documents. This guidance prevents unnecessary conflicts between guardians and caregivers.

- What are the numerical results such as sales performance?

▲ Last year, transaction volume was 5.2 billion KRW, and so far this year about 3.5 billion KRW. Commission revenue from the payment system is expected to increase from 220 million KRW last year to 500-600 million KRW this year. The decrease in transaction volume is mainly due to fewer hospitalized patients caused by medical policy conflicts. Currently, 12 employees work here, including developers, social workers, and care assistants who manage the service. Over the past year, 2,460 caregivers and more than 3,500 patients and guardians have registered.

- How are caregiving fees determined?

▲ Fees are calculated daily and vary depending on the patient's condition. Generally, the daily rate is around 120,000 KRW, but additional fees apply for diaper use or hemiplegia. Separate standards apply for infectious disease isolation cases. All criteria are transparently disclosed so guardians can predict costs in advance.

- How does caregiver matching work?

▲ We are developing a recommendation system through multi-party evaluation as part of the Ministry of SMEs and Startups' TIPS (Tech Incubator Program for Startup) project. Matching is based on hospital work availability and disease-specific care capability. After service completion, star ratings are collected. We currently collaborate with about 80 partner hospitals, especially Samsung Seoul Hospital and Catholic University Seoul St. Mary's Hospital.