GrandCare Health Services CEO: ‘Generalist’ Home Health Agencies Will Be Squeezed Out of the Market


When David A. Bell first took over because the CEO of GrandCare Well being Companies, the home-based care supplier was caught in limbo.

Whereas the Southern California-based GrandCare had a strong orthopedic house well being division, it was weighed down by a number of different service strains that actually weren’t going wherever. To get his firm trending upward, Bell determined to go all in on orthopedic specialty care, bucking the development of being a “generalist” house well being supplier.

That technique has since paid off.

House Well being Care Information lately sat down with GrandCare’s CEO for our newest episode of “Disrupt” to study extra. Highlights from the dialog are beneath, edited for size and readability.

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HHCN: To start out, are you able to inform our listeners a bit about your self and GrandCare? How lengthy have you ever guys been round for?

Bell: Effectively, GrandCare has been round since 2003. I’ve been concerned for concerning the final 10 years. Like lots of people, I bought concerned with house well being care form of by chance.

During the last 20-plus years, I’ve been operating non-public equity-owned firms. Nearly every little thing I’ve completed has been targeted on that nexus between expertise and discovering methods to assist folks. GrandCare me, so I initially grew to become concerned as an investor. Then in 2017, I used to be made the CEO.

At the moment, GrandCare was a very good firm from a top quality standpoint. However financially, it was in some misery. The enterprise was unprofitable and shrinking. It made sense for somebody like me, somebody who has completed this for a dwelling over twenty years or so, to come back in and assist preserve the nice whereas fixing the dangerous.

My PhD was targeted on rehabilitation engineering, so this was an space that wasn’t fully unknown to me. However I had been concerned with rather a lot since then. I lived in India for some time and constructed a manufacturing unit that makes electrical automobiles. It’s nonetheless one of many largest producers of electrical automobiles there. I had been concerned in constructing apps for birdwatchers, too. I’ve been concerned in water-treatment-plant initiatives, operating laboratories and a wide range of totally different companies.

I wished to attach with you and study extra about GrandCare Well being Companies for a number of causes. One, you’ve developed the status as a best-in-class employer. Two, you lately accomplished a cope with 24 Hour House Care. Three, you’re probably not your typical house well being supplier. Are you able to speak a bit bit about that latter level?

We don’t consider ourselves, or consult with ourselves, as a house well being supplier. We’re fairly totally different from most house well being suppliers. In some methods, I feel we’re form of a mixture of a startup and an in-home rehabilitation supplier. We focus solely on optimizing the in-home care of orthopedic sufferers.

Though it isn’t horny, we consider that there’s a ton of worth in simply optimizing how that works. We’ve invested over $1 million, which for us is some huge cash, during the last couple years to develop proprietary expertise for delivering higher care, incomes higher high quality scores, streamlining back-office processes. All that stuff provides up. It makes our workers’ lives higher, and it makes our sufferers’ outcomes higher.

We consider that life is just too brief to be mediocre at a bunch of issues. Our mission in life is to be the most effective at one factor. That’s considerably opposite to the best way the entire house well being business works. House well being companies are 99% generalists, and that merely isn’t our method.

Has that at all times been the working mannequin for GrandCare? Or was that possibly a part of the turnaround if you joined?

It’s a bit little bit of each. After I first grew to become the CEO of the corporate, we have been actually a generalist. I imply, it’s no joke to say we most likely had greater than 10 companies. We had a hospice enterprise, a VIP-shift nursing enterprise and a bunch of different stuff — detox and many issues. And it’s simply exhausting to run quite a lot of companies and be good in any respect of them, particularly after they’re all fairly sub-scale on the identical time and all making an attempt to develop. Now, we have been, at the moment, good at orthopedic rehabilitation. We had some good relationships, and it was a large proportion of our complete enterprise.

Since then, that a part of our enterprise has been rising as a result of we’ve been specializing in it. Slowly and over time, we’ve been shutting down all the opposite elements of our enterprise.

Are you able to stroll me by way of how GrandCare has grown through the years? The place are you at immediately, when it comes to variety of sufferers, for instance? How does that examine to possibly pre-pandemic occasions?

We clearly bought hit fairly exhausting in 2020. There have been shutdowns of elective surgical procedures. However at the moment, we’re working at document ranges, when it comes to referrals and affected person admissions. Clearly, the combo of these sufferers has fully modified. In the event you look again to 5 years in the past, that blend was possibly 35% to 40% orthopedic. Now, it’s north of 90% orthopedic. So the orthopedic enterprise has grown, in income phrases, roughly 15% to twenty% a yr, aside from 2020.

However for 2021, we’re just about again on development. And the remainder of our enterprise has been offered off or shut down over that very same time-frame. So the highest line hasn’t modified that a lot during the last 5 years, however the composition of that income has modified dramatically.

All house well being suppliers have been impacted by COVID-19 in a wide range of methods, from staffing shortages and quantity swings, to regulatory adjustments and extra. However I think about as a supplier that focuses on these hip-and-knee sufferers, so to talk, the pandemic will need to have been actually, actually impactful, simply contemplating the elective-surgery suspensions you referenced.

It was extraordinarily disruptive. Luckily for us, I feel we have been a bit bit forward of the curve, so far as anticipating there was going to be an issue. We have been capable of purchase masks and do the stuff that we would have liked to do to be prepared. Nonetheless, on the finish of the day, 80% of our income went away when the elective surgical procedures shut down. That was actually not a scenario during which it was useful to be an orthopedic specialist.

I’ve to be trustworthy; I had quite a lot of sleepless nights. There have been some durations on the very starting — earlier than the federal government offered assist, such because the Paycheck Safety Program (PPP), for instance — once I didn’t know if we have been going to make it. I noticed what was coming, however it wasn’t clear how lengthy it was going to final. I actually didn’t know if we have been going to make it.

However our crew did incredible. Our crew pulled collectively. Everyone on our crew took voluntary 20% furloughs. We doubled down on making an attempt to be an employer of alternative in our business. We made certain folks didn’t lose their livelihoods, that households didn’t lose their livelihoods or well being advantages. We have been largely profitable in that effort. We did in the end get PPP loans, federal grants and different types of authorities assist. And actually, with out that, I don’t know the way we might have made it by way of the yr. However we did. We had a bit little bit of a wave in January and February of this yr, however that didn’t include the identical influence. At this level in well being care, we’re feeling fairly acclimated to COVID-19, notably in California. I don’t anticipate extra shutdowns of electrical surgical procedures until there’s some loopy new variant.

In September, GrandCare and 24 Hour House Care introduced a transaction, the place you truly offered your non-medical house care division. Stroll me by way of that call.

Positive. To not sound like a damaged document, however it’s a continuation of our concentrate on being the most effective at orthopedics — and in-home non-medical care is simply not one thing that’s a core enterprise for us.

There may be probably quite a lot of overlap, although. One of many issues that brought on me to delay so long as we did, in getting our private-duty enterprise transitioned to any individual else, was that overlap. There are conditions the place it is smart to have the ability to present each medical and non-medical care to a affected person, and so we did spend a while making an attempt to type that out.

However what we in the end determined was that our private-duty enterprise simply wasn’t sufficiently big, simply wasn’t sturdy sufficient, simply didn’t have the geographic footprint to actually have the ability to help our wants in that regard. We decided we have been higher off partnering with any individual to have the ability to present that non-medical portion of care, whereas we offered the medical portion. 24 Hour was an ideal match for us from that standpoint.

Like us, they concentrate on being the most effective at what they do. They’re not making an attempt to do 50 issues. They’re making an attempt to be the most effective at one factor. And they’re — like us — acknowledged as one of many nice locations to work in senior companies in California. We felt good about transitioning our workers over to them. And so they present nice, high quality care, so we felt good about transitioning our sufferers over to them. What I’m actually enthusiastic about going ahead is now we will present, by way of our partnership, non-medical care to sufferers who want it all through our footprint.

Additionally we will go into hospitals, together with our present bundle companions and our present referral relationships, and hopefully present them with a package deal possibility that may profit each 24 Hour and us by getting us within the door.

GrandCare has developed into an skilled in the case of bundled fee fashions and value-based care, I perceive. Are you able to inform me a bit bit about that?

To begin with, should you’re going to be the most effective at orthopedic rehabilitation — which is generally knee and hip, total-joint substitute after care — then you definately higher be good at bundles. That’s the place quite a lot of these sufferers are. It’s, as you most likely know, one of many few areas the place the information suggests bundles truly work. They ship higher high quality for decrease prices. The key for us is that we perceive once we go right into a bundle, we’re going to earn much less cash. And what I at all times inform my crew is that’s okay.

We wish to be on the value-based care practice — not below it. Worth-based care isn’t a fad. Worth-based care goes to proceed. We consider that whoever figures out learn how to do it proper and do it greatest goes to be in a very good place to succeed.

There’s no silver bullet. We concentrate on being a very good associate. We concentrate on offering wonderful day-to-day communication. We offer information transparency. Bundling is all about metrics, all about information. You’ll get measured. And should you don’t carry out, you’re going to get fired. That’s the place we shine. It’s not about gross sales and advertising. It’s not about slogans. It’s about producing outcomes. For us, we’ve to only preserve getting extra environment friendly. We’ve to maintain getting our processes streamlined. However there’s sufficient alternative to make cash in it. In the event you concentrate on being a very good associate and preserving the success of the bundle as your foremost precedence, it’s an atmosphere during which people who find themselves good can succeed.

What excites you most about what you’re seeing in house well being care?

I feel the developments are nice. 5 years in the past, 10 years in the past, most sufferers who have been getting joints have been going to expert nursing services, which simply isn’t a terrific setting for them to get the care they want. Many have been being readmitted as a consequence of failures in care, too, not simply from expert nursing services however from house well being as properly. These readmission numbers have simply gotten tremendously higher. I feel that’s incredible. I feel, although, that we’re, simply midway to the place we have to get to.

By way of the developments going ahead, we’re seeing the rising child growth inhabitants. Orthopedics particularly is positioned to develop much more as a result of that’s disproportionately one thing that’s widespread amongst this senior inhabitants. We’re going to see a rise in quantity.

What else?

I consider we’re going to see it changing into more durable and more durable for generalist house well being companies to compete as a result of in-home care and orthopedics is a specialised space. In the event you’re sending out individuals who spend all day taking good care of cardiac sufferers to deal with your orthopedic sufferers, you’re not going to be optimizing in one of the best ways. I feel that one of many developments we’re going to see is that this space will more and more be managed by specialists like us.

What do you see as a few of the greatest challenges for GrandCare shifting ahead?

Each night time, it’s a special factor, to be trustworthy. However what I’m worrying about proper now’s our capability to maintain up with progress. Final yr, I frightened about how we have been going to maintain the doorways open. This yr, I’m frightened about maintaining with progress. There’s a giant alternative in entrance of us, and there’s simply an enormous want for higher expertise to deal with this particular area of interest. There’s a bunch of individuals on the market constructing house well being software program, however that doesn’t actually assist orthopedics particularly.