Disrupt—Alliance CEO on How Wrap-Around Home Care Drives Hospital Referrals

After a 14-year career in finance, Gregory Solometo founded Alliance Homecare. Today, the company is building on its reputation for providing high-end services as it expands in and beyond the nation’s largest metropolitan area.

Based in Manhattan, Alliance’s service area includes New York City and the nearby counties of Nassau, Suffolk, Rockland and Westchester, and stretches across the river into New Jersey. Annual revenue for Alliance grew from about $6 million in 2014 to $15 million last year, and the company now is entering a new phase thanks in part to its larger scale.

For the latest episode of Disrupt, Solometo spoke with Home Health Care News about how he made the switch from finance to home care and the Alliance business model, based on its federally trademarked “Grandma Rule.” He discussed how Alliance’s scale and low readmissions rate are driving more hospital referrals, described the organization’s latest investments in technology, and explained how it partners with a variety of organizations to build out its service offerings.

Subscribe to Disrupt via Apple Podcasts, Google Play Music, SoundCloud or your favorite podcast app. Below are some highlights of Solometo’s comments, edited for length and clarity:

You were with Lehman Brothers and Deutsche Bank for 14 years before you went on to found Alliance. Did you have an entrepreneurial itch while you were with the banks?

I didn’t have an entrepreneurial itch … but the experience of helping my grandmother through her process hit close to home, and I developed the thought around providing a different type of care model. So, I don’t think I was always entrepreneurially driven, but I have very much enjoyed the process and being my own boss and driving the direction of my own brand.

In the early years of Alliance, did you bootstrap it or have investors? 

I formed the company with two close friends that I grew up with. They’re both nurses. They both had extensive clinical experience from the neuro-ICU at Columbia … the two of them and myself really embraced my grandmother and they really helped me through that period … I approached them about the company. The three of us started it together. For the first number of years … all three of us had primary jobs. I was still working in banking and doing this on the side, as were [co-founders] Michelle and Diane. Michelle worked at the hospital and Diane worked at a pharmaceutical company. We fully bootstrapped it. We didn’t take internal investment … a lot of it was time, effort and energy, not so much finances.

From the first couple of years of business for us, I really took the lead on the caregiver side of the business. Michelle and Diane had a large group of nurses they worked with in the hospital, so through one and two degrees of separation, they had a sizable number of nurses who worked for us. I probably interviewed the first 600 or 700 caregivers that came through Alliance, and what I found was that even though I was asking the same questions, and finding out if they’re legal to work here, and are they certified … all of the main criteria any home care company would ask … I would also gauge the softer side of their nurturing ability. Were they positive, did they smile, and what it came down to was, would I hire them for my grandmother, or not?

My grandmother was very dignified, she was English and very proper, and so she really expected to look a certain way when she left the house, to have her hair done and her clothes in shape. I would really look for caregivers who would understand that and provide the kind of care my grandmother would want. So that became the benchmark, and as we grew and had other staff interviewing and doing recruiting, we still used ‘The Grandma Rule,’ and we federally trademarked it. Which is meaningful to us only, but it says that anybody we put into the field, we feel comfortable with them taking care of our family.

I think Alliance has become known for providing “white-glove care,” and your clients tend to pay between $50,000 and $100,000 a year for up to 40 to 50 hours of staffing, whereas the norms for that level in your markets would be closer to $40,000 to $80,000. Are you charging more and passing on some of that to caregivers in the form of pay and benefits?

That assumption is fair … We’ve realized that in order to get really good caregivers, we really need to pay them a good wage … And every Sunday for seven years, I was my grandmother’s caregiver, so I know what it’s like … Over the years, the general industry would typically pay $10 to $11 an hour. We were starting people off at $14 an hour and often paying $16, $18 and upwards of $20 for people that had really good experience. So we would typically pay 40% to 100% more in salary than the industry typically would.

The numbers I have in terms of revenue are that in 2014 it was around $6 million and now that’s up to about $15 million. Is that right?

That is correct … I really would attribute that to a few things, but mainly developing deeper ties in the health care system and hospitals. We started becoming large enough that we could service hospitals appropriately. So, we do have relationships now taking discharges from a number of the top hospitals in the city. But we also provide high-level private-duty nursing, which is not super common in our industry.

Most home care companies provide home health aides. We do that, but we also provide shift nurses as well, probably about 50% of what we do … our original name was Alliance Nursing.

In terms of getting that hospital business, is it both your scale but also that hospitals becoming more aware of their home care partners, who can keep readmissions down?

I think it’s a combination of those two. You have to have the size to handle the volume of requests that come. If you get a referral from a hospital system and you’re not able to handle that business, word travels very quickly and it doesn’t come again.

But from our perspective, because we are high quality and we have a lot of care management oversight to every case we have, every one of our clients has a nurse and care manager … so people who want quality appreciate that. And because of that oversight, our readmission rates for our home care system are extremely low. We measured it last year, at the end of 2017, and our [30-day] readmission rate was 3%. The industry average is 15% and Medicare is 20%.

We’ve been reporting on all the interesting partnerships you’ve forged to provide a broad base of services to your clientele. Can you describe the personal chef service?

It’s not easy to provide a food solutions for clients … The way we’ve handled it is, we have nutritionists or registered dietitians who go in initially, and they’ll understand the medical situation and directives that come, so we call them the food doctor. And once they go in, they work in lockstep with an organic chef company called Tohi Wellness that we work with.

Tohi goes in and tries to create a fun atmosphere, all with the intent and purpose of providing better food. They have a shopping excursion. They’ll look up a healthy food store or supermarket in the vicinity of the client, engage in a cooking class with the caregiver, the client, their spouse or children or family members, and then go back on a repeat method for some time to make sure the caregiver has more support, and we can actually train them to do a slightly more advanced culinary support that can lead to a better outcome.

Written by Tim Mullaney