In a 2006 article, Gitlin and Reever describe an enhanced model of Adult Day Services in their article “Enhancing Quality of Life of Families Who Use Adult Day Services: Short- and Long-Term Effects of the Adult Day Services Plus Program.” In short, the paper describes a model whereby the adult day services employs a social worker to work diligently with families during the first month and throughout the first year of attendance to address the individual’s needs and caregiver stress and burdens. The results of their research show that families receiving additional social services utilize adult day more and for a longer period of time while reporting reduced stress levels.
In a recent twist of the model, The California Adult Day Services Association in cooperation with the Scan Foundation conducted a study that they presented at the National Adult Day Services (NADSA) conference this past year. The goal of the study was to develop an expanded model that could additional revenue sources as the CAADS members moved to managed care. In the study the centers added an additional RN or nurse practioner to provide intense service to dual eligible seniors with significant chronic care needs. The nurse worked with the individual and their families, if present, to tackle the health challenges of the affected individual. The case management included efforts at disease education, attending medical appointments, identifying community resources, getting the individual to the emergency room when needed, and other interventions. The hope post study is that the centers would be able to contract with managed care organizations for additional services already being provided in other settings.
From a business perspective, many centers need to diversify their revenue sources whether a non-profit or for-profit entity in the face of steady or declining government payment programs. With the intentional and intensive social services (or perhaps nursing services?), the center potentially has the opportunity to sell the care management services in a geriatric care management model or other traditional care management models. At the very least there is the opportunity to increase utilization of the center by delaying discharge and increasing attendance days at the center. This in itself may pay for the increased social or nursing services inherent to the model.
Some variation of the model seems to hold significant promise to the center’s programming and the center’s business operations.
Recently, I had a run in with a sales person from Patch.com. He had met my marketing person who thought that their service sounded like a good idea. I met with them obtained a quote and let them know we were putting everything into the budget. We decided to move some of our advertising dollars from a local paper to Patch.com.
The follow-up lost it for them. The sales representative came to our office and explained to my marketing representative that the offer was set to expire that day unless I signed the deal. The sales representative informed my employee that he had explained this deadline at the meeting, emailed me about the issue, and called me to discuss the issue. The voice mail was left a couple of minutes before contacting my employee and there was never an email or any mention of a deadline. We probably could have gotten the same deal if we wanted to today, but do I really want to deal with such silliness and lack of integrity in selling?
I do not. Life is too short. The medium they have to offer won’t make or break us, though it might expose us to a different audience than what we could get elsewhere. But, I don’t want to work with sales people who treat my company this way. More importantly, I don’t want my sales people to think that it’s appropriate to treat their customers in this fashion.
Clearly, services and products need to be sold, but the credibility of the sales person will disintegrate quickly once falsehoods and misrepresentations enter the equation. It’s not as though the deal was tiny or unsubstantial. Our lifetime value (LTV) to the Web site would be measured in tens of thousands of dollars if he got us through the first year successfully. Instead, our LTV to Patch.com is zero.
According to the San Jose Mercury News, 23andMe has gotten in trouble with the FDA. Their service allows an individual to test their personal DNA and compare it to a database of almost 1 million DNA samples. The idea is that the comparison will tell the client if the individual shares genetic information with someone with particular diseases. The results might provide insight into the client’s health that can then me used by the client’s physician to work towards better health. It sounds like a really interesting idea that would yield interesting results. One company back is Google, so they have deep pockets.
The problem? The FDA has ordered 23andMe to stop marketing their genetic tests. Within days of the FDA order, the company became the subject of a class action lawsuit regarding their product.
I have no idea if their service works or not. But, I do know that 23andMe ran afoul of a common small business trap: compliance. The larger a company becomes the more complex the compliance issues. By 3 employees, the company should have a worker’s compensation policy in Georgia (though the company is responsible for worker injuries after 1 employee). 401Ks require certain paperwork. Eventually the company is subject to laws and regulations such as PPACA, FMLA, HIPAA, and the FLSA and has to manage issues with state and federal agencies.
Another company who has been in the news recently concerning compliance issues is UBER. They offer a web-based black car service that users rave about. Their challenge is that they often run into taxi and limousine regulations. Generally, UBER chooses to fight both legally and in the public forum. They also have very deep pockets to fight regulatory structures.
The problem for the business manager is we do not have unlimited resources. The challenges can end up in court or with stop work orders. There are settlements. The agency with oversight can literally close the company down or make it impossible to continue on.
Our company is newly large enough to realize the joy of regulation and compliance. We’re big enough to have the challenges, but small enough not to have the resources for handling everything easily. We’re committed to understanding the rules, but don’t to spend all our time on compliance issues. We’re involved in health care, so these issues are all around us. We have to be good at it. We’ve also discovered the joy of checklists.
I’ll write more on this issue, but suffice it to say, I can’t get overly excited by the compliance issue I face; however, I see the value in developing expertise in this area.
Any other thoughts?
In the world of technology startups, four ideas/books seem to be quite influential: Business Model Generation, Steve Blank‘s Customer Development model, Eric Ries’ The Lean Startup, and Agile Development. I’m not a technology guy, but they talk about launching companies often and with abandon. What can we learn from them that we can apply to the non-web venture.
We’re in the process of launching a new company. Really, we’re spinning out our transportation operations into a separate company. I’m in the process of reading Business Model Generation and The Startup’s Owners Manual. I’ve read The Lean Startup. I’ll be looking for a book about Agile Development.
We’re starting out with the Customer Development model and speaking with many potential customers. We’re working on a Business Model Canvass. One initial thought is that we’re moving pretty quickly. We’re starting to send proposals out. If we create customers, we’re on to something. If not, we’ll have to try again.
We’re starting a new venture; rather, we are in the process of spinning off some transportation operations into it’s own company. We’ll be in the transportation space, so it’s a service that everyone needs (but will anyone pay for it?). There’s lots of competition: planes, trains, and automobiles. We’ll be focusing more on non-emergency medical transportation, shuttle services, and senior living services. We’re writing a business plan or perhaps we will use the ideas presented in Alexander Osterwalder & Yves Pigneur’s Business Model Generation using their Business Model Canvas. What questions do we need to answer? I came across a great article by William Sahlman in the Harvard Business Review entitled: “How to Write a Great Business Plan.” We’ll explore the ideas more fully in future posts, but here is the basic framework:
- The People
- The Opportunity
- The Context
- Risk and Reward
The questions begin with who is involved and what expertise do they have. Then we want to understand the opportunity, who the customers are and why they need our services. Can we create economic value? or Will we simply be throwing money down the drain? We need to understand the context of the opportunity. This clearly looks at the industry and other macro-questions. But, it also asks the questions about LEGAL requirements. We’re looking at transportation, so we’ll be spending a lot of time at the US Department of Transportation Web site. Finally, we need to understand the risk and the reward. The article has a great chart showing this: consider the hole created at the beginning of the venture as well as the possible positive outcomes.
A while back, a colleague invited me to partner with her in her business. I was intrigued by the possibility, but ultimately decided not to do it. The key morsel of advice came from my attorney, who begged me: “Don’t do it!” I’ve been thinking further about the partner/no partner question:
- Does the partner bring something to the table that you don’t have besides money?
- Can the partner round out a management team?
- Can you work and live with the individual for a long period of time?
- It’s hard to get a divorce. Who has control? How do you escape?
It’s probably inevitable that a partnership will develop. There may or may not be ownership in the company, but if there are any employees, the operating owner-employee relationship will start to look like a developing partnership.
One last thought: find a good attorney. Ultimately, the partnership needs to be put in writing with an operating agreement. The agreement will have a lot of boiler plate language in it, but it needs to spell out who the decision maker is and how control is divvied up. It better also represent how the partnership will dissolve whether for amicable reasons (one person wants to move to Hawaii) or because of more nefarious reasons.