It’s been a year of changes for Bayada Home Health Care.
This June marks the one-year anniversary of the grand opening of Bayada’s new global support center in Pennsauken, New Jersey. And it’s been about 10 months since David Baiada became the company’s CEO, taking over the role from his father, J. Mark Baiada, who founded the business in 1975. Today, Bayada is one of the largest home health providers in the world, with annual revenue of more than $1 billion and more than 23,000 employees across 335 locations in five countries.
The support center spans two buildings, with room for about 400 workers who were previously spread across six counties in New Jersey and Pennsylvania. Those employees are moving into the new space on a rolling basis. Bayada has renovated the buildings, installing a production studio for shooting video, a spacious cafe, and a variety of work spaces—and doing away with offices altogether, including for the new CEO.
He doesn’t miss having an office, Baiada told Home Health Care News, noting that the openness and transparency of the support center reflect the values of the company.
Home Health Care News recently caught up with Baiada at the global support center. He discussed his first months in the CEO role and the state of play in the home health industry, which has seen transformative mergers and acquisitions recently, as well as shifts in Medicare Advantage rules and the entrance of tech-forward startups with large venture capital funding. Baiada is excited about these developments, saying they have made the industry a more high-profile part of the U.S. health care system.
But while acknowledging the need to adapt to these changing conditions in the industry, Baiada also believes that the basic formula for success has not changed.
You became CEO last August, correct? Has it been a smooth transition into that role for you?
Baiada: Yes, August 17, 2017. I think we spent a lot of time trying to prepare the organization for change. Mark, my dad, is obviously a pretty iconic personality, in a way. As a founder, this place has his essence infused in it … We’ve spent a lot of time focusing on the same core things, which is creating a long-term, values-based institution that’s going to continue to be here in 100 years delivering great service in the community.
Bayada offers a variety of services, including home health, personal care and hospice. Where does the majority of revenue come from?
We’re organized into nine specialties of service. Actually, our largest specialty is pediatric nursing care. That’s about one-third of our entire company on a revenue basis. About a $400 million business. Then Medicare-certified home health is the second largest. They kind of go back and forth, it’s a little bit of an internal competition. And then it goes all the way down to our startup practices, including our medication management business.
Bayada Senior Living is another specialty, can you describe that part of the business?
We started to realize, probably 10 years ago now, that providing home care services inside a senior living community, where there are typically 100 or more seniors, has some service and relationship characteristics that are different. Whether in the Medicare program or private pay personal care services, you have more than one client. You have the patient themselves, their family, the staff and the management of the community, and everybody is working together to collaboratively support the resident … We started to realize we wanted to carve out specialty teams that only focus on that setting.
It’s the same core service, but delivered with teams who are really trained to understand the nuances of delivering services in a community like that, and participate and get the entire community involved.
Still, today, a lot of home care companies are treating [senior living] like a traditional referral relationship. [Getting a call from senior living] is very different than getting a call from a hospital discharge planner who is just trying to get somebody home. So it’s a totally different kind of setting and requires a different mentality and frame of mind. We measure success differently, and we teach the clinicians how to navigate those communities in a way that they really blend in. (Click here to read more about Bayada Senior Living on Senior Housing News.)
We’ve been reporting on the new Medicare Advantage rule, allowing coverage of non-skilled in-home care. What’s your take on that opportunity?
First, it’s something we’re really positive about. We’ve been providing non-skilled in-home services for 43 years. Our original service was private-pay personal care and support services. We’ve been in the Medicaid personal care business since 1976. So, in many ways our roots are in non-skilled care for seniors in the home. So we have a lot of familiarity with the impact we can make, and the way we feel we can contribute to safety and independence, better outcomes, lower costs.
In a lot of ways, this has been a long time coming. Candidly, we’re excited, because we’re unique in the market in terms of our ability to deliver both a skilled Medicare-reimbursed service as well as a non-skilled service with scale. It’s unclear exactly how the benefit will be structured and the way services will be covered. But broadly speaking, the fact that the plans are thinking proactively about how they use different types of services and build them into the benefit and policy structures to create better outcomes at a lower cost is a great thing.
Are you having discussions with Medicare Advantage insurers, giving input as they build that benefit?
We have a lot of relationships. We’re the largest provider of managed care home health in the country, by a lot. So, we have a lot of relationships with large plans and all the way down to the small ones.
I think there’s a wide range in the sophistication of those conversations, from “We have a task force working on how we’re going to do this” to, “Oh wow, I hadn’t even heard about that.” I think it’s early. I think for us the real opportunity is to help them shape the way this benefit gets infused into the policy structures as well as the way the services get authorized and delivered.
Any sense of whether the benefit will be geared more toward short-term home care, maybe as post-acute care, versus for long-term, ongoing care?
The conversations are very broad. I wouldn’t say I have any clarity on how it’ll play out one way or another, yet.
Are you concerned about the coming shift in the Medicare payment framework to 30-day episodes? Do you have any sense of when more information will be available about the specifics of that framework?
For us, the core issue is that people really need services in the home, and the government is actively thinking about how to make sure people have access to that care.
Our focus tends to be, while we’re working really actively to understand and engage with CMS [the Centers for Medicare & Medicaid Services] and our peer organizations to shape the way the benefit is structured, at the end of the day, our core focus is, do we have great people? Are we delivering a high quality service efficiently, and helping keep people safe and independent at home and getting great outcomes?
There’s a lot of speculation about how these changes will unfold. It would be easy to join the speculation, but I’m more focused on how will we execute a consistent, highly reliable service regardless of the way the benefit is structured. Usually, it comes down to, do you have a great talented group of people and a great culture of people working together to deliver great service?
That’s not easy, though, to recruit and retain great talent. How are you adapting to tight labor markets and the tough competition for caregivers?
People is our number one growth constraint. There’s plenty of demand for care at home. Most of our focus on adaptation is, we experiment a lot, but at the end of the day, are you creative and entrepreneurial and determined to find the best people and create an environment they want to be a part of? [That comes down to] really core components of our culture. Things like long-term sustainability. Our non-profit conversion, which is really about creating a platform to ensure we’re here in a hundred years.
But then, it’s about how do we … focus on engagement and recognition and other elements of culture? I think at the end of the day, anywhere in health care, [including] home health, a nurse, a therapist, an aide is doing this because they want to help people. There’s something in the heart. So, we want to create an environment to enable them to do that work. A lot of our competitive focus on the labor market is, how do we create a great place to work, because they’ve got a lot of choices.
So, how do you make it a great place to work? Having this newly renovated support center has got to be part of it, right?
This is our shared service center, so actually, our clinicians in the field don’t get to experience this place. A lot of what we do for the clinicians is rooted in, I would say, the value system, and how our values manifest themselves in day-to-day behavior.
We do a lot with rituals and traditions … one example is that The Bayada Way, our core values document, has fifteen key actions that are the essence of how this place works. Every single Thursday, every single employee at every single location around the world has a fifteen-minute conversation about one of those key actions, at 8:30 in the morning. It’s a ritual that sounds very simple, but when every single person globally is thinking of the same aspect of the value system and sharing examples of things they’re doing that demonstrate that value, it creates a really valuable sense of connectedness.
If I’m a caregiver in the field, who do I have that conversation with?
Right now our focus has been with the branch based staff. But our hope is to continue to engage the clinicians in the field to ensure that they stay connected to this important ritual as well.
What about the role of technology? I know that Bayada has done some interesting things, such as working with Uber to help in the hiring process.
I think there’s been lot of innovation in the last couple of years. I think technology in our segment of health care—and health care in general—has been pretty immature. We tend to be a fast follower, not an innovator, so we’ve been waiting for the market and technology out there to mature a little bit.
Certainly, things like the EVV [electronic visit verification] mandate force our hand a little bit. We’re a CellTrak partner inside of our Medicaid personal care business, which is primarily where the EVV mandate holds. They’ve been a great partner, and we’re doing a lot of interesting work with them, particularly with the managed Medicaid plans, with integration with their care management processes.
Where we’re a little bit more of an innovator is the technology to support our people processes. Our core strategic focus here is on talent and culture, so we’re doing a lot of work around technology on the employee side of the equation, whether it’s communication, or we’ve recently transitioned to Workday, which is a huge ERP [enterprise resource planning] platform that gives us the ability to do transformative things around onboarding and recruiting. We’re doing a lot of work around applicant tracking and the recruitment/candidate experience, some niche mobile applications around nurse recruitment and nurse staffing processes, things like that. Making the employee experience better is really our core focus.
Have you experimented at all the data analytics to identify the best candidates? We’ve heard of senior living companies starting to use those products.
We’ve experimented a lot, but I wouldn’t say we have any silver bullets. We hire a lot of people, particularly on the nursing and home health aide sides of the business, so how we manage the pipeline and how we source candidates and how we empower people to refer their friends really easily—a lot of this is how we create a great candidate experience. It’s changing. It’s a buyer’s market rightness. A candidate’s market. They have a lot of places they can go.
So, how do we make this easy, how do we adjust to accommodate the different preferences of the job candidate? People don’t answer their phones anymore. So, how do we create an entirely text-based initial inquiry process? Because, that’s the way people communicate.
[These areas are] where most of our innovation energy is focused.
Would you say that labor is the biggest challenge right now, is it the thing keeping you up at night?
I think supply, whether it’s the nursing shortage or just the buyer’s market per se, it’s our number one business problem by a lot. It’s the thing that keeps me up at night the most, for sure.
I do feel optimistic because I believe what we’re doing here and how we think about culture and how we think about the long-term versus the short-run results and financial performance, I think we’re creating a place that’s differentiated. But it’s still tight, and it varies by market, who we’re competing with … the competitive dynamics look differently whether you’re competing with a children’s hospital for NICU nurses, or a lot of home health agencies for aides, or with Walmart, for that matter. But generally speaking, we’ve got more demand than supply.
There’s been a lot of consolidation in the industry. Almost Family and LHC Group merging, Humana taking a stake in Kindred, the tie-up of Jordan Health Services, Great Lakes Caring and National Home Health. How do you see the competitive landscape shifting, and are you satisfied with the scale of Bayada, how are you thinking about growth?
The way we tend to think about the world is that there a lot of people who need health care at home—particularly when you think global demand, not just domestic. So, even as one of the largest providers in the country—in the world—our market share is relatively small.
We think about growth the way we have since 1975, which is, take care of more people today than we did yesterday, and steady, consistent, but modest incremental growth so we can keep up with the need for reliability and quality. And that comes down to, do we have the best people? Find, engage, develop the best people, so that you can deliver the best service, and in turn, the market will ask for you more.
I think it’s great that these organizations are consolidating. Hopefully that brings more investment, more sophistication, more visibility to the impact and power of the service we’re providing. But there’s always going to be mom-and-pop, too. At the end of the day, delivering service reliably, consistently in the home, with a family at a time of crisis in their lives, is really, really hard. I think large companies will find ways to do it and small companies will, too.
You bring up international demand for home health. How is Bayada making inroads in overseas markets?
Bayada operates in five countries. Our international growth has been pretty opportunistic over the last ten years. We now operate in India, Germany, Ireland, South Korea, and we have an investment in New Zealand, as well.
When I look back to the last ten years of experience, we’ve learned one thing that seems really obvious. The desire to be at home and cared for at home is a human desire, not an American desire. In each country, the cultural, regulatory, reimbursement dynamics have different nuances, but when we get inside the house, the relationship between the nurse and the aide and the patient—I don’t care if it’s Kenya or Kansas, it’s the same.
The second thing, which may be less obvious, is that getting the best people and the great team of people who are empowered to listen and build groups and community and find great caregivers and deliver a highly reliable, high-quality, responsive service, wins. It doesn’t matter if it’s Georgia or Germany. Build a great team of people who are adapting and tuning in, finding a niche that is a need in that community, and there is a market. A really big market.
Is it an opportunity that is being overlooked by U.S. providers?
Some of the franchises have a really big global footprint already, but … we’re the only home care company in South Korea right now, and we’re getting great results. Germany has a very mature system. There’s a lot of variation. But this is a global need. There’s a massive opportunity.
What makes for a good international opportunity? It seems like Bayada is operating in some very different countries, is there a common thread?
The common thread is … get the right person. The right leader, who’s tuned in to the value system and how we work … and they’ve got to be able to get their mind around the local market and attract and inspire a team of people that can figure it out. Particularly in the markets that are less mature. India [for example] is a really complex place right now, to provide health care.
With such a large population in India, that has to be a particularly big potential home care market, though?
We’re learning a lot [in India], but it’s going to be twenty-five years before it’s an economic success, right? We charge $2 an hour for our service. So, the scale is totally different. We’re not there because we’re focused on a big economic return. We’re there because there’s a massive population that needs the service and we’re learning a lot, and there’s some great people there that are making it come to life.
I just saw a report from AARP, showing that 1 in 4 family caregivers is a millennial. Do you think personal care providers should be doing more to market their services to this demographic, to get them to consider hiring someone to help?
It’s interesting … We have a lot of work to do on how we evolve the way we play to the different buyers in the private-pay market. That said, I think we find, still, that the core elements of success have not changed in forty-five years. If you’ve got a great aide, if you find the right match for Mrs. Smith, who shows up and connects, it doesn’t matter what else happens. We still document on paper and send a paper bill every week. I’m not saying that’s okay, particularly for the millennial buyer, but the reality is, the magic is in the relationship between the aide and the client.
Almost every family I’ve ever met, when I ask them, what can we do better, should we improve the technology, should we give you a mobile app so you can check in and pay your bills, they say, as long as you keep sending great caregivers that meet my needs, you can do whatever you want.
That’s been instructive for us, and tempers our innovation and investments. I think some of the innovative or disruptive companies that have started, some of the reason that they’ve found challenges [is related to this]. One of those companies came to the this market and left, because they couldn’t get reliable aides. The technology was beautiful, and the client experience was beautiful, but if the aide doesn’t show up or isn’t a great match …
Are there any sources of home care disruption that you have on your radar, that you think could really change things? We’ve been reporting on Amazon’s health care plays, there are rumors of Walmart buying Humana, and there are those “digital disruptor” startups that you’ve already mentioned.
I think there’s clearly going to be an evolution in the way health care is delivered. Certainly, technology has a huge role to play. When you’re managing a mobile workforce that’s dispersed into the community, how do you get more efficient, how do you use technology to augment and complement the in-person engagement we provide?
I’m not sure disruption is really the right word, though. Disruption implies in twelve months, turning the industry upside-down. I fundamentally believe that people want to remain at home and be cared for at home, and that there’s magic in the human connection between a professional caregiver and a patient. We can complement that with technology, but I think there will always be a very meaningful, very large need for that relationship.
That said, I love the innovation that’s happened. Part of it is bringing attention to the magic of that relationship and the importance of people’s desire to be cared for at home. I think that’s a phenomenal thing. So, whether it’s the vertical integration that’s happening, or the Honor/Hometeam service model, or labor model disruption, tech disruption, I think that’s great. It’s helping take what was an unknown corner of the health care industry and putting it front and center, for all the right reasons: [our ability to deliver] better outcomes, lower cost, preferred setting, magical human connections. I’m a huge supporter of all that.
And the market is so big, there are so many people who need this type of help, especially when you think globally, so I feel like those types of things are tailwinds, not headwinds.
Written by Tim Mullaney