Government Relations: Six Tips for Working With Uncle Sam

At Skylark, we work with the government. A lot.  You would think that our customers are our Seniors and those who love them.  You’d be right of course, but Uncle Sam pays us a lot of money each year.

We also work extensively with private individuals and insurance companies. 

There are some great advantages to working with the government: the business is relatively steady even during bad times and there is a steady flow of new clients.  We are also able to help individuals who would not normally be able to afford our services.

There are some disadvantages as well: payments are generally lower than what we receive from private clients, there are significant compliance issues, and the programs can be put on hold or discontinued.  Another big disadvantage is that they will audit your performance against a contract and ask for earned revenue back if performance isn’t properly documented or doesn’t meet expected standards.

Most of our government work is with Medicaid and the Veterans Administration.  We also work with local agencies at the city and county level.

Here are a few tips that we’ve learned the hard way:

  1. Competitive Advantage: Read and learn the regulations.  Many competitors don’t read the regulations and don’t know the rules of the road.  When working in a government contract, we’ll want to maximize the revenue opportunities as well as minimize expenses.  Without knowing the regulations, its next to impossible know what is possible as well as what is not.
  2. Find the government official who knows how to get things done:  Don’t expect special treatment, but there are individuals working in government who know how the system works and has the relationships to rise above bureaucratic red tape.  These individuals are awesome sources understanding how the regulatory environment is changing.  When you find these individuals treat them well.
  3. Government Relations: As a small business owner, you probably didn’t start your business to spend time with government officials.  Yet, as the CEO, I’ve found it vital to show up to speak at the state legislature to advocate for needed industry changes, meet government officials, serve on industry advisory committees, and the like.  As we grow, I will need to invest in professional government relations services (Lobbying) in order to stay abreast of our industry and advocate for our company and our industry.
  4. Compliance Program:  Develop your compliance program.  It’s for employees (are you ready for an immigration audit of your I-9s?); it’s for OSHA, the health department, state licensure boards, Medicaid, Medicare, the VA among others.  Compliance failures can bring down your company quickly.  Our best friend in compliance is the custom checklist.  We’ve also been working with our software provider to build compliance into the company workflow. 
  5. Join your industry association and make sure it has a great public policy arm:  This is intimately tied to the need to be involved in government relations.  Many state legislators do not want to just meet with an individual company.  They would rather meet with an association that represents many companies.  There are two many companies to meet with all of them, but if the association can consolidate an industry’s needs and communicate those interests professionally, there is an opportunity to impact public policy.  This is especially true the higher up in government you are looking.  It’s difficult but not impossible for an individual to make a difference at the city, county, or state level, but probably impossible to have an impact at the national level without that association backing.
  6. Long-term investment: A small-business owner needs to invest in their public policy efforts over a long period of time.  It’s not a one and done process.  In Skylark’s niche of the healthcare world, we woke up one morning realizing that our regulatory environment had changed.  It changed in an unfortunate and challenging way. 
  7. Be a good actor: It should be obvious, but be nice and polite.  Be a great resource to them. The employees, legislators, and staffers are often berated and not treated well.  Make it easy to help you.  If you yell, curse, complain loudly, and generally are a pain, your credibility will go downhill quickly.

Government work brings challenges and rewards.  Know the laws and the regulations.  There is a lot that can be accomplished by working through the system.  I didn’t quite understand the importance of government relations when I started the company, but it is an area of expertise that I spend a fair amount of my time on.

What else?  What involvement in government do you have in operating your business?  How do you manage the commitment?

Interviewing CEO Candidates: Questions for Strategy

I am currently serving on a search committee for a new executive director for the National Adult Day Services Association.  It’s been a long process where we have had to identify transitional leadership, do some significant strategic planning, and identify and then interview candidates.  I’ve learned so much during the last few months.

A friend of mine and a fellow search committee member sent our team a link to this article by James Citrin of Spencer Stuart: How Boards Interview CEO Candidates.

The article is an interesting guide for a board to use when hiring their next CEO or Executive Director or other leadership position.  He’s has hit on some great questions that cover a wide range of a CEO’s responsibilities.  In his interview guide, he covers the following areas:

  • Growth, Financial, and Operational Management
  • Strategy and Vision
  • Leadership and Team Building
  • Technology
  • Culture

He includes some additional interview questions that are useful, but a bit outside of the above categories.  The most important question according to Citrin: “What questions do you have for us?”

Read the article.  Here’s my question for the small business owner: can you answer these questions about your company?  In a resource constrained environment, how do you lead your company forward?

At least those were the questions I was asking myself.  I’ve got some work to do.

 

 

What Seniors and their Children want?

This will be a short marketing musing.

I had a lunch with a friend, who had recently heard a well known Atlanta real estate developer discuss the differences between what and where current seniors wish to call home and what their adult children desire their parents to call home.  The thesis is that seniors wish to stay in their own home, aging in place; however, once the adult child becomes involved in a parent’s care, they would rather that their parent leave their home and move to a residential setting that includes care services.

It’s a provocative thesis for community based providers, of which I am one.  I can’t agree completely with the premise, as I’ve known many families to work heroically to keep their loved one’s in their homes and out of assisted living and skilled nursing settings.  Yet, as I witness more and more assisted living facilities being built, the competition increases for the attention of the Baby Boomer adult child, many of whom are choosing the residential option for their parents.

This is a key marketing questions for the senior care business leader: whose desires reign supreme.  Much of the literature suggests that the Senior wants to stay put and live the rest of their days in the family home.  But, what if the decision maker is increasingly the adult child and their interests no longer coincides with their parent’s wishes.

If the interests of the Senior and their adult children are increasingly diverging, the implications are significant.  Some areas that warrant further consideration:

  • How do our target markets change?
  • Where should we locate our businesses?
  • How do sales and marketing strategies change and evolve?
  • How sensitive to the local demographics is this divergence?
  • If the community is newer, wealthier, younger, or older than average, does that skew the results one way or the other?
  • Are we seeing a change in what adult care giving children want for their parents and their lives?

These questions are just a start.  What I do know is that there are very few interactions with our Senior consumers that do not involve their adult children.  This is true even when the primary caregiver is a spouse.  Understanding the relationship between the two is key to the success of the community based senior care business.

What are your thoughts?  What business implications do you see in the evolving relationship between the senior and their children?

Care Partners: Fighting the three plagues of loneliness, helplessness, and boredom

With this blog, I’m interested in exploring senior focused businesses. Let’s face it, it may be just a bit too broad. My business is senior care.

A few weeks ago, I took a three-day class to become a certified to teach the Eden at Home curriculum. Going into the training, I was, more than anything, curious to learn about the Eden Alternative and The Green House Project. While I suggest learning more about these affiliated organization, they are noted for being leaders in the “culture change” movement, which basically means that they have been very influential in making nursing homes more humane.

The starting point for the Eden Alternative came when Dr. Bill Thomas was rounding at a local nursing, when he met a patient who poignantly said to him: “I’m so lonely.” He realized one major problem is that the culture of the institution forced care decisions for the benefit of the company, management of staff, and regulatory compliance. Juggling all these items is actually quite difficult and requires help from advanced computer programs. In the process, it is easy to lose track of the person.

I found the training fascinating from a business management perspective. Looking at the Web sites of The Green House Project and the Eden Alternative, a very different vision of the nursing home, assisted living, and senior care in general is presented. It requires different architecture. It requires different staffing models. It requires more involvement of the care recipient and the caregiving family. It’s different. But is it profitable? Can the business communicate it in its positioning and strategy?

In the world of adult day services, I think we tend to be person centered, if for no other reason than that we see our participant’s families on a regular basis, and in many cases, on a daily basis. Yet, there is something compelling in becoming more intentional about reimagining the relationship between the participant (care recipient), the family, the center, and other service providers as a care partnership. The three plagues in the title are real for both the care recipient and the care giver.

Should we adopt many of the ideas presented in the Eden at Home curriculum? There is much that is interesting and worthy of consideration. Perhaps we need to adapt the principles or use them to spark a conversation about what are culture needs to be, how we need to train our associates, and how we should improve our services, operations, and strategies.

Culture: Government Payment Centered to Private Customers Centered

In the adult day services arena, which consists of programs alternately described as social or medical model, adult day center, adult day health, or adult day care. It tends to be center based. In the United States there are approximately 5,000 centers. Center providers received compensation from families pay out of pocket (including long-term care and life insurance products, and loans), through grants and community fundraising, and through government payment sources such as Medicaid, the Veteran’s Administration, and other state and federal programs such as the Older American Act and the USDA’s Child and Adult Care Food Program.

Government payment sources are by far the most significant source of funding for adult day services. How does this affect the company’s culture? First, many of the government payment sources also have significant case management program in place with sophisticated intake and referral processes. Consequently, the customer becomes the case management system rather than the individual client. The center tries mightily to serve the participant and her family, yet the case manager is the one who has to be pleased: nurses and staff drop everything to take their calls; the case management care plans form the foundation of the center care plan so the center doesn’t get cited and lose money in recoupment; and significant energy is expanded to ensure documentation compliance rather than excellent care. The payments tend not to move up for years at a time (if not decades), so there is constant pressure towards cost cutting rather than staff and program improvement. The pressure is intense to have a culture responsive to mandates and regulatory compliance.

In Georgia, I’m seeing resistance from Centers. In some cases, programs are simply closing in response to the increasing costs, increasing regulatory requirements as it has become difficult to develop a viable business model. Others are bucking the system. For one non-profit, they decided to drop their participation in Medicaid and government payment programs. They had the ability to continue serving their existing Medicaid clients because they were able to raise money and they found significant savings when they focused on what they valued rather than regulatory compliance. Other centers have announced that they will no longer take new government payment clients.

This appears to be the change that most programs must adopt to become healthier businesses with reasonably levels of profitability.

The change is not easy. In conversations with NADSA members, this goal as proved elusive. Much money has been spent developing beautiful, upgraded physical plants; yet, the needle hasn’t been moved. They find competition from assisted living, in home care, nursing homes, and other senior care providers. It’s difficult to be successful in that market, because it is easy to become dependent on the sophisticated case management referrals.

The first change the adult day center has to be in the corporate culture. The culture that succeeds with government payment sources is not the same culture that succeeds with families determined to provide the best care for their loved ones with their own funds. The culture that will Wow the family with sufficient funds to care for their loved one is different. This is a person-centered environment, in which families expose intimate details of their lives as they become care partners with their loved ones. These customers won’t be impressed with a focus on private paying clients simply because the center needs a better source of revenue.

The next few entries will explore the adult day center’s corporate culture. Clearly, it is and must be unique to each organization, but it FEELS key to effort to change.

Let me know how corporate culture of your program impacts your ability serve and attract a healthy mix of customers.

Corporate Culture: the only thing completely within our control

I’ve been thinking about Corporate Culture for a while now. We find ourselves facing increased competition for employees. There have been times in our organization’s history, where it is very clear what the culture is, what is needed, and what is not acceptable. I’ve also found it very difficult to define our culture in a way that all can understand and embrace it. It became exponentially more difficult once we added a second location where employees had very little face to face interaction from one location to the other.

Because of regulatory and business environment changes, we’re in the process of proactively reacting and reexamining our operations. If as David Cummings suggests that corporate culture is really the only thing completely in our control, we’ll be starting there. We’ve struggled and worked at keeping our culture strong, but now it needs to be tweaked. To continue growing, we’ll need to move and pulse faster. As we hire, we’ll need to become more sophisticated ensure we’re bringing the right people on board. We’re large and spread-out enough that not everyone can be hired by one person. It’s been a long time since one person could supervise everyone on staff.

Over the next couple of posts, I’ll share some thoughts about our culture and some of the ways that I think we need to change.

Adult Day Services Plus—The Future of Adult Day Services?

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.

Integrity in Sales: When Lifetime Value Approaches Zero

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.

Compliance! Yuck!

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?

Domain Experts Requested with No Technical Co-Founder

We’re needing a new software product for my current business. We’re old school: health care. Our current commercial software is dated. We found something new, but it doesn’t help us at all with compliance which, after the operations, is our biggest challenge. I’m not a technical person, but we’re going to have to conquer this problem with technology or be conquered by it.

David Cummings on Startups

One of the ongoing questions in the startup world is around the importance of having a technical co-founder. The idea is that by having a strong technical person on the founding team, the startup will be able to move faster, make more intelligent architectural decisions, and build a better product. Several days ago PandoDaily published an article about Quotidian Ventures and their focus on “founders who have domain expertise in large, opaque old school industries.”

I agree that having a technical co-founder is great, but is no longer a requirement. Here are a few reasons why it isn’t as important as it used to be:

  • Cloud computing, and specifically Amazon Web Services, are much better understood and have more ready-to-use scripts and tools that remove many of the previous challenges
  • Languages and frameworks, like Ruby on Rails, have significantly reduced the learning curve to not only get up-and-running…

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