BrightStar Invests to Maintain ‘Neiman Marcus’ Business Model
Facing tight labor markets and a looming caregiver shortage, BrightStar Care is investing in technology and launching an $800,000 workforce initiative as it pursues ongoing growth in 2018 and beyond.
These efforts are consistent with BrightStar’s long-standing goal for the company to be the “Neiman Marcus of home care,” CEO Shelly Sun told Home Health Care News, referring to the high-end department store.
Based north of Chicago in Gurnee, Illinois, BrightStar is one of the largest franchise-based home care providers in the nation, with more than 300 locations and revenues exceeding $1 billion. In 2017, the company added 20 new locations and increased system-wide sales by about $40 million, Sun said.
Looking ahead to 2018, BrightStar is targeting even more growth, aiming for 30 new locations. As the brand continues to expand, Sun believes it can remain an employer of choice—a critical objective given fierce competition for workers, rising wages and a limited pool of qualified caregivers to meet quickly rising consumer demand.
The Neiman Marcus model
BrightStar Care typically offers both personal care and skilled care, except in a handful of states where laws prevent private-pay skilled care. And in all states, there is a registered nurse overseeing services for each client. This commitment to clinical quality is helping BrightStar thrive as minimum wage laws and competition for workers drive up labor-related costs, Sun said.
The idea is that customers are looking to get more bang for their home care bucks, as providers are raising rates to help offset higher labor costs. Clients are increasingly looking for the type of “clinical differentiation” that BrightStar can deliver, Sun said.
“We’ve always said we’ll be hiring qualified, certified labor and pay higher than the marketplace, so we have that positioning,” she said. “So as the market increases, we’ve at least set our segmentation around people are going to pay the most but get the most.”
It’s been Sun’s vision for the company from its founding in 2002.
“I said, ‘We want to be the Neiman Marcus of home care,'” she said. “Not everyone can be a client, but for those who can, I’m going to sleep well at night knowing that we’re providing the highest level of care.”
Home care brands that were built around low prices are having a harder time coping with current cost pressures, she believes, particularly in those markets where recently passed laws are driving minimum wage up to the $15 per hour range. That’s less common in some regions, such as the South, while it is prevalent in other areas, such as California.
Sun does acknowledge that seniors living on fixed incomes in places with higher minimum wages might now have fewer options or tougher choices to make about care.
“In the markets in California where you saw increases immediately to $15 [an hour], with pricing then being at $17 to $18 an hour, it puts constraints on consumers on a fixed income, and the markets are trying to work through that,” she said. “We’re very sympathetic … it’s a tough balancing act.”
Creating a worker pipeline
While rising labor costs might actually help BrightStar, Sun is worried about another workforce issue: The increasing scarcity of the high-quality, credentialed workers that BrightStar needs to deliver a Neiman Marcus level of service.
“It’s the No. 1 risk and challenge,” she said. “We have an increased number of nurses retiring due to age and fewer coming in, proportional to the [consumer] demand that exists.”
There is limited nursing school capacity, Sun added, with some BrightStar caregivers having been on a waiting list for two to three years. In response, BrightStar is undertaking a three-year, $800,000 strategy to build up and credential its own staff.
This involves creating its own certified nursing assistant (CNA) curriculum, having it approved in each state where BrightStar has a location, and building collaborations or partnerships with clinical settings to get hands-on, practical components of training. This year will be focused on curriculum development and partnerships, with the next two years focused on segmenting out the states and getting the program up and running.
The workforce initiative comes on the heels of the company investing $13 million over the last four years to develop a proprietary technology platform.
In 2017, a mobile platform rolled out to manage 20,000 clients a day, with a separate system for nurses to do care plans and supervisory visits. Using the mobile solution, caregivers now can see what tasks are to be performed on a daily basis, and the system is also GPS enabled and meets the coming mandate for electronic visit verification (EVV), Sun said. In states with a so-called “closed model” for EVV, BrightStar has been able to create an interchange to feed data into the state-run EVV system.
Next on the tech front, BrightStar is developing a mobile platform for skilled nursing shifts.
Offering this type of tech helps BrightStar attract licensed practical nurses and registered nurses, who are able to spend less time on paperwork and more time “making a difference” delivering care, Sun said.
The corporate office is also hiring; currently there is one full-time employee for every three franchisees, and this could be down to one for every 2.7 or even 2.5 franchisees by the end of 2018. This additional workforce will not only include nurses to help keep clinical quality high, but also people to offer more sales backup, business analysis and overall infrastructure support, Sun said.
She’s looking for these HR investments to pay off for the brand within 24 months. Combined with the ongoing tech projects and the workforce initiative, she is optimistic about the direction of the company.
“I’m bullish on what this means for our franchisees,” she said.
Written by Tim Mullaney