From Supplier to Servicer: Briggs Enters Home Care Operations
A proprietary medical documentation and device company with a 70-history has stepped across the line from providing products to providing services by acquiring operations in the private duty home care space.
West Des Moines, Iowa-based Briggs Healthcare has recently started a new business line as the owner and operator of private duty home care companies—with plans to expand.
Briggs has become a well-known name in the medical supply and medical form space, with more than 10,000 products and serving more than 50,000 customers across the senior care, home health care, physician and retail markets. With this clinical experience and production capabilities, Briggs has added home care.
In 2015, the company made its first purchase of home care operations. Now, Briggs owns and operates five private duty home care agencies, including one location in St. Louis; two in Overland Park, Kansas; one in Topeka, Kansas; and one location in New Hampshire.
“We consider home care to be the fastest-growing segment of the entire health care spectrum,” John Phillips, chief information officer at Briggs Healthcare, told Home Health Care News.
When paper-based documents started to be edged out by electronic medical record (EMR) systems, Briggs looked for additional business lines. With 10,000 baby boomers turning 65 every day, the attractive demographics of the home care market sparked the interest of Briggs at the time it was looking to diversify the company.
“What Briggs has been known for is paper documentation, paper forms used by many markets in long-term care and home care,” Tom Young, executive vice president and CFO at Briggs, told HHCN. “Most medical institutions are moving to EMRs and not using paper much any longer. When that decline started, we looked to diversify the company and move into other areas to offset the decline in paper business. One of those we landed on was the private duty home care market.”
Over the next few years, Briggs is aiming to acquire between 20 and 30 home care operations, including up to six to eight locations more in 2017 alone, according to Young. Its targeted acquisitions are businesses in the $1 million to $1.5 million range in a market with room to grow.
The Briggs Model
Briggs has kept the new business line largely under wraps, in part because it keeps the local names of the operations it acquires. While the locations are unified under the Briggs corporation, the local brand remains in place once it is acquired. Management also stays in place, and Briggs actively seeks out companies that wish to continue running the home care business in its potential acquisitions.
Through acquisitions, Briggs is able to take some of the administrative burdens off previously independently-run home care operators and allow the existing management team in place to continue focusing on caring for patients. The outcome is a business model that borrows from franchise models and independent operations—a combination of large-scale corporate benefits and a localized approach to care.
“When you’re a Visiting Angels franchise, everything you bleed is Visiting Angels,” Phillips said. “This is not a franchise model. Though it’s comparable—like rationalizing the back-office structure and having some commonalities for marketing sources, entering and coding things to the operating system—it’s not to the point where everything is identical. Many clients prefer a local [operator rather] than [one] owned and operated by a corporate entity. It’s a personal thing in home care.”
Many of the former owners of the home care agencies sought to put their businesses up for sale around the same time new regulations began taking effect, including the end of the overtime exemption for home care workers. As a large company, Briggs’ scale is helpful in dealing with these added costs.
Briggs’ large scale may also be beneficial in dealing with caregiver shortages across the industry by raising caregiver salaries in some of their locations. By moving some administrative operations into the Briggs back-office, raising salaries was doable, according to Phillips. The company could also offer 401(k) options to caregivers and health insurance offered by the corporation to attract caregivers to their new operations.
“We know and understand that if you own the caregivers, you essentially own the market,” Phillips said. “Not every agency is the same, and in at least one of our agencies we took a drastic increase in starting salary of caregivers, to compete with the nursing homes and other facilities. By owning that market, you help stem that caregiver shortage that virtually everyone is experiencing.”
As a newcomer to the operations side of the home care economy, Briggs has become increasingly selective in its acquisition targets after learning from missteps with its first investments, according to Phillips.
“We’ve learned a lot by owning these five [agencies], and sometimes learning comes with pain and gnashing of the teeth,” Phillips said. “We are adapting and changing different strategies. We studied the market and came up with a strategic plan with the intent of growing the agencies. That’s what important to us.”
Some of those growing pains include dealing with the very regulations that became effective around the same time Briggs began to acquire home care companies.
“What we learned in home care is that [overtime] is not an expense—it’s a necessary part of the business,” Phillips said. “It can be managed, but you can’t control the clients, snow storms or cars breaking down. It requires the use of overtime. [While] overtime should be zero, we know it can’t be the case in this industry.”
For Phillips and Young, there was more to learn about home care operations than regulations, even after studying the market for years before Briggs made an acquisition. As corporate executives, Phillips and Young put in place a “regional executive director” to help bridge the chasm between home care operations on the ground and corporate operations at Briggs.
“As we acquire more and more agencies, we envision more regional executive directors to provide that level of [operating] expertise,” Phillips said. “[There is] that barrier between corporate idealism and agency realism. Sometimes the two don’t always meet when you don’t have an intermediary in between.”
With an intermediary in place at the start of 2017, Briggs is looking to gear up its new business line with more home care agencies and become a trusted name and partner in operations.
Written by Amy Baxter