When Paul Kusserow was named CEO of Amedisys Inc. (Nasdaq: AMED) in December 2014, he knew he was taking over a “hub-and-spoke” business model that was in a downward tailspin.
One major issue was that Amedisys had “completely lost touch” with the home health care market and the clinicians it’s built on, according to Kusserow. Another major issue was that the company’s decision-makers didn’t have the freedom to take risks or think creatively about the future of in-home care.
Partly thanks to Kusserow’s changemaking efforts and leadership, that has all changed. Today, Amedisys is one of the largest “aging-in-place” companies in the country, with recent accomplishments including its $235 million acquisition of hospice giant AseraCare.
While Amedisys has changed a lot since 2014, it’s not done yet. Kusserow — a man who “has a knack for skating to where the puck is going to go” — has more ambitious changemaking plans for 2020 and beyond.
HHCN: You came into Amedisys as part of a turnaround effort. What immediately stood out to you in terms of changing your company’s trajectory?
Kusserow: About a year before, I was leaving Humana to go start a complex care management company in California. As I was getting that started, the board of Amedisys — this was in late 2013 or early 2014 — asked me to come in and take a look at their strategy. I knew the chairman of the board well. We had worked together.
I brought in some friends of mine from BCG, Boston Consulting Group. We spent about three months with Amedisys, then delivered a report to the board. It was a very thorough report that was not well-received by management at the time. But the board liked it. We basically said, “Here’s what you’re doing. Here’s what you need to do if you’re going to turn this business around.” Then I walked out the door, went back to California and started building this care management company.
They called me back and said, “Hey, would you be interested in coming in and possibly being the CEO of Amedisys?”
It was clear they had been through a lot of people before me, but no one was taking the bait. I was in the middle of my own thing, as we just had raised a huge amount of money to go build this company. But I thought this seemed exciting. As I was building this complex care management company, I started reflecting on my time at Humana. I felt that home health was where things were really going to go. And I felt that here was a really interesting opportunity to take something that could be a fantastic company and get it to the top.
It was a pretty simple process from my perspective. It was a founder-owned company, even though it was public. In that kind of model, everything revolved around the founder and CEO. Every single decision of any worth had to go through that person. When you build a hub-and-spoke model like that, you eventually outgrow it. It becomes very difficult to get things done, and things often get clogged up.
So, the founder and CEO resigned. The board had the CFO in his place for a while. Then I came in. To me, the first big question was: How do we turn a founder-oriented business into a business where people had the freedom to do what they needed to do, to make decisions on their own? That was question No. 1.
Then, the other issue was the company had completely lost touch with the market. So the odd thing I did when I first showed up was that I left for about three months. I was rarely seen. I went out and I did thousands of interviews with our employees and caregivers. I visited, I think, 20-something states. I don’t know how many care centers exactly, but it was a lot.
I spoke, too, with a lot of key referral sources, both large and small. I met with people who stopped doing business with us. I met with people who liked what we were doing. I met with people who kind of thought we were okay. I took notes and tried to listen hard to our employees, to our referral sources and to our patients. I spent a lot of time with our patients.
After I started to hear the same thing over and over again, I said, “Okay. That’s our strategy.” It’s a strategy we still stick with: to deliver the best clinical care out there while taking really good care of our people, because they’re the ones delivering the care. We knew we had to give them the best tools available in the business. If we did all that, we thought, we knew we were going to grow. And that’s what we’ve been doing.
If we do what our patients need, what our referral sources need and what our front-line employees need, we’ll always be fine. I think we’ll always lead and thrive as a company.
Do you ever think about what could have been if you kept building that care management company?
I’m really happy that I made the choice to come to Amedisys. Ultimately, I think it’s one step beyond what I was developing.
People want to be taken care of directly in their home. This industry is growing in so many different ways. It’s growing toward chronic, continuous care. It’s growing decentralized. The technology is here. The caregiving is here. You can do a lot more in the home than anywhere else.
Apart from the Amedisys turnaround, what changemaking efforts are you proud of?
Well, I’d maybe go back to my time at Humana. In 2012, I helped Humana bring in SeniorBridge. That was a hard fight, trying to convince people to do that. But I had a very good ally, Bruce Perkins, who’s now on our board. Without Bruce there, I don’t think I would have been able to get that deal done. Then after doing the deal, we showed it worked. The results were spectacular.
Payers at that point were starting to watch Optum. They said, “Okay. They’re buying all these services. Why?” We, at that point, said, “We need to be in the home. That’s our play. We don’t have to be Optum, but we do want to be the Optum of the home.” We took a big risk on SeniorBridge — and it paid off.
I’d say the other thing I’m proud of is my general background prior to being CEO at Amedisys.
I was a strategy and turnaround guy. I have a knack for figuring out where the puck is going to go. Often, I’d be in these big companies or I’d invest in something as a venture capitalist. I’d always be working on: How do we move these companies toward the future? How can we bring disruptive things into these companies? That’s kind of been my career. I did it at Humana. I did it at Tenet Healthcare.
When I was at Tenet, I ran a venture fund. We started a whole bunch of businesses that turned out well. Prior to that, I did a lot of my own investment work, building companies utilizing technology-based services. That turned out well. So I had a pretty decent track record as a venture capitalist.
What was a changemaking effort that you failed at?
If you’re trying to move something forward, you fail every day. I have more failures than I have successes. And that’s fine. You should always keep your failures around you — in a good way — and learn from them.
Often, failures are due to the fact that timing isn’t right or the market isn’t quite there. It’s really important to assemble a set of strategic ideas, then try to place them at specific times in the marketplace and see how they play. But we fail all the time. One of our failures had to do with killing Clinically Home, which was fundamentally “the hospital in the home” or “the SNF in the home.”
We’re going to relaunch. The timing is right for that now. We’re getting back into the SNF-at-home business.
We tried to do some technology initiatives at Amedisys. I cut it. I killed the AMS3 program. We fired over 200 people, unfortunately. But at some point, we’re getting back into that technology and data game. We’ve gotten involved with Medalogix, for example. We’re getting back into integrated technology. We’re never going to build an EMR (electronic medical record) or do something like Homecare Homebase, but I do think we’ll be in the data business. And I do think we’ll be in the “interoperability in the home care space” business. We’ll want to move data around between personal care, home health, hospice and palliative care. We’re going to need to do that. Somebody is going to have to innovate.
Looking at home health care more broadly now, how have you seen the industry change?
Well, it’s still a relatively fragmented market, but there’s certainly consolidation among the top players. Also, in my time in this space and even before, the government has been cutting us every year. At the same time, the government is saying that they increasingly believe things are going to move into the home. It’s interesting that they cut on one hand and then, on the other hand, say this is where things are going.
Definitely, I’d have to flag the emergence of Medicare Advantage. I think that will change home health. I think the move toward risk is something that’s going to be quite significant.
I think the market has more potential now than ever before. One reason why we’ve grown so much is we’re able to articulate the true potential of the home-based care market. This is an area that the industry as a whole is really excited for. The potential is also due to the aging of baby boomers. There’s a huge movement toward the desire to age in place. People do not want to be in institutions, if at all possible.
The thing that hasn’t changed, which is disappointing, is the Centers for Medicare & Medicaid Services (CMS) and its perception of fraud in the industry. I’d say that’s an ill-founded anachronism at this point. There is definitely fraud, but it’s not as widespread as CMS says. There are old misconceptions there.
If you could snap your fingers and change one thing related to home health, hospice or personal care, what would it be and why?
The main thing would be to have CMS stop moving the goalposts every year. Because I think that would give us a level of stability where we could really focus on our operations, not so much on changing and readjusting our machinery to follow all the rules out there. If CMS would just, for maybe two or three years, not move the goalposts, I think we could really deliver a lot of good care.
The other thing I’d say is that I’d like Medicare Advantage (MA) to move more quickly to where they know they want to get to anyway: being in the home and keeping members out of the hospital. They hold us back consistently. I’d like to see MA generally start to build more around home-based care, utilizing us more often around that home-based care. As we’ve seen with managed care at this point, their MLRs [medical loss ratios] are going down. So, they have plenty of money. I think what they should be doing is spending more time — more experimental and innovative time — on developing home-based solutions.
Workforce has been a struggle for a lot of in-home care providers, but it’s an area where Amedisys has had a lot of success. Since you came in, the company has steadily lowered voluntary turnover rates. What were the keys to accomplishing that change?
Well, it’s, again, following our big-picture strategy. We listen. We spend time with our people. We understand that the base of Amedisys has always been clinicians and our clinical operations.
When you produce quality ratings that are as good as ours, good people want to come and work for you. When you show a commitment to driving down turnover, you get happier people with much better productivity. And that works its way throughout the system as well. We’ve also started to invest more in leadership.
I learned very early that we’re just a company of people. We’re nothing more than people. The quality of our organization and the care that we deliver is all based on our people and their passion to do that. So our job is to provide them with the best environment and tools possible, making it where they want to practice their art here. Are we where we want to be on the turnover front? Absolutely not. Are we working really hard every day to get there? Yes. I think our turnover rate shows we’ve made a lot of progress.
Personally, do you consider yourself somebody who enjoys change or somebody who dreads it?
I very much enjoy change. I think change creates possibilities. It creates potential. It creates differentiation. There are so many of these cliches out there, but if there’s anything consistent in life, it’s change. Particularly in our industry, you have to always know change is coming. And you have to always know how to deal with it.
The success of your company is built on how you sort through the change, how you prioritize what you’re going to need to do, how you then pivot effectively to drive good results. I think change is wonderful. And I think the people who are able to thrive in the midst of change, those are the types of people we want.
We’ve talked a lot about how Amedisys has already changed over the years. Looking ahead to the next five years, how do you hope Amedisys continues to change?
I think we need to keep paying attention to the market, to our patients, to our employees and to our referral sources — and to the government, which helps pay our bills. I think the more we listen, the more we respond and the more we realize our core value is caregiving, we’ll keep heading down the right path.
Everybody in our company is a caregiver, one way or another. Everything we do ultimately results in care being delivered to a patient. As long as we focus on that in the next five years and are very honest with ourselves, I think we will continue to innovate in providing really good care. That might mean more technology and things like telemedicine. That might mean taking on higher-acuity patients with SNF at home and hospital at home.
I want to get us to the point where each patient can get a personal care person, a home health person, a palliative care person or a hospice person exactly when they need them.
What are the key ingredients to successful change management?
I think No. 1 is to understand what you’re good at. When you boil everything down, what are you really good at? What makes you better than anybody else? What makes you distinctive? And then let the other stuff go away, particularly when you’re in crisis. Stick with what you’re good at and build from there. A lot of change management is assembling teams of the right people who are able to extract value from the core of what you’re good at, at the right time.
Another thing that I’ve learned as CEO, in this process, is that my role changes all the time. When I first walked into Amedisys over five years ago, I came in as a turnaround guy. We had to work as a hierarchy. I made most of the decisions. When we got through the crisis, as we’ve been emerging into a better company, I’ve learned that the less I have to do with the running of the company as the CEO, the better the company actually is. We’ve got a phenomenal team of people now. When you have good people, they’re going to take things, run with them and drive change. They’ll lead the drive and really push toward change.
As CEO, I’m really proud of going from someone who did all the work, who made all the decisions, to someone who’s built the team. I don’t mandate anything, really. It’s the team that puts things together. And as a team, we have each other’s back. We collectively run this company. By giving the team that authority, they produce much more than they would otherwise, if I was still the boss monitoring every single thing they did.
Yes, ultimately, I’m responsible for things. But we have really divided up the work nicely. And we’ll continue to do that. I continually believe the more people you can empower, the better your organization is.
The interesting thing also for CEOs is, if you can’t evolve, then you’re going to start to hold your company back. I view myself as kind of a blocker for others, so to speak. My role is about making sure they can get the lanes they need to do their jobs and grow. When you get people who thrive under you, they get the credit for it, then they create those lanes for others and it becomes this really virtuous cycle.
I think the last thing I’ll say from a change perspective is this: As I knew I needed to change, as Amedisys was evolving and needed different types of leadership, I said to my team, “When it’s time for me to go, tell me.” And, believe me, they take that seriously. When I stop being a value-add, when I stop helping them, it means I haven’t evolved to where they need me to be and where the company needs me to be.
I really want to be able to stay at the helm, but you have to earn your CEO title every single day. There are those who don’t, sure. There are a lot of them out there. I worked for some of them. But I don’t want to be like them. A lot of people believe it’s an entitlement and a privilege to be in the CEO role. I see it as something you have to earn every day.