This article is sponsored by Maxwell Healthcare Associates. In this VOICES interview, Home Health Care News sits down with MHA CEO and co-founder Jennifer Maxwell to learn why M&A has been on the rise in home health care, predictions for home health M&A in 2021 and why training helps solve staffing challenges.
Home Health Care News: Jennifer, what I’m always interested in here first is to know what parts of your career path and your career journey do you draw from most frequently in your role as CEO of MHA?
Jennifer Maxwell: I went to school to study human behavior and become a counselor. I learned several skillsets that have been invaluable as I transitioned throughout my career. First, listening, interviewing and reading people and situations instinctively. These skills I use daily as I run our businesses and work with clients.
Growing and cultivating relationships and partnerships has been a constant in my career. Working with diverse groups of people and organizations to solve industry issues has been a passion of mine, whether that is at micro level or a macro level.
MHA’s foundation is in the people, process and technology. The backbone of that being the people on our team. We look for hungry, humble and smart individuals to join our teams, and we do so strategically as our goal is to partner with our clients and work together to listen, learn and help organizations get to where they need to be. Building trust and rapport is key for those long-term partnerships and the overall success of our clients.
You and your husband Tom co-founded MHA in 2016. What did you see in the industry that led you to found this company?
Maxwell: Tom and I worked with many organizations over the decades and we saw the industry needing a different type of consulting. They were looking for an expert yet niche-type of consulting in the post-acute space that embraces the three-pronged approach of people, process and technology. If organizations do not have the resources to support their people, such as well-defined and executable processes, no amount of technology will be successful.
Many organizations didn’t know how to best utilize or leverage their technology, as they are in the day-to-day trenches of caring for patients. We were getting phone calls from multiple hospices and home health agencies wanting help to understand their day-to-day operations as well as optimization of all of those components. We were also helping them with the strategy to get to where they needed to be. Agencies are in need of a partner that understands not only the what and the how but the why behind it all.
COVID-19 obviously disrupted all elements of the home-based care industry, and yet, after a lull in M&A activity in March and April of 2020, we’ve actually seen a rise in that activity, some of which you saw firsthand. What were you seeing in mid to late 2020 with regards to M&A activity in this sector?
Maxwell: Late in 2020, we saw many hospices and home care acquisitions definitely pick back up. Hospice was the hottest ticket item that we were seeing: agencies being sold at high multiples, along with bidding wars between buyers. Agencies were getting record returns on their investments and have multiple options to choose from when selling, whether that is to a strategic, PE firm or merger. It’s now such a competitive market. We’re seeing agencies look to sell sooner than anticipated and looking for optimization assistance to get that higher multiple at close.
What are your predictions for home health M&A for the remainder of 2021?
Maxwell: How do we see 2021? It’s going to be even hotter than the fourth quarter of 2020, honestly. We are seeing diligence request after diligence request from the buyer side along with optimization requests coming in heavy from the selling side. We believe that hospice will remain the biggest piece of M&A but we are also seeing private duty M&A picking up.
We’re seeing more continuum of care strategies with the larger strategic agencies and the big private equity firms coming out this year. This is going to be a year of change like none other and will be a very, very competitive 2021. I would love to re-visit this question at the end of the year to see where it all flushed out.
One area of the MHA team’s work that is cutting edge is RPA, Robot Process Automation. What does this mean, and how does it affect home-based care providers, including hospices?
Maxwell: RPA is definitely up and coming. We partnered with Element 5 to bring much needed automation to the post-acute care industry. What we have seen with those agencies that home-grow their RPA — or piece it together with smaller firms — are a lot of errors and breakdowns in the automation. They are having humans continuously monitor for those breaks, thus negating the whole objective of leveraging RPA.
Element 5 has next-level technology that minimizes the need for humans to monitor. We are working closely with them and developing numerous workflows and automations that are extremely detailed and efficient. They are saving time, people and money along with increasing efficiencies within agencies.
We also are utilizing the RPA post-acquisition transactions to automate the technology transfer of data that would typically take numerous consultants and time to complete. For example, if you take a large hospice with a 2000-plus census that has to migrate all those patients over into the new technology, that would typically take weeks to do. We’re talking hundreds and hundreds and hundreds of hours. We’re able to take it down to like four days. Think about the ROI on that acquisition. It is profound. You’re saving time to full transition, decreasing impact on staff and mitigating potential burnout and room for error, to name a few.
We have a great level of confidence with Element 5. Our client successes have been multiplying.
There is so much for a home-based care provider to manage right now, that while technology is supposed to be a time-saver, it can become a burden. What are the manageable, small steps that agency operators can take to ensure that they are getting the most out of their technology systems?
Maxwell: To start, I recommend leveraging a consulting firm to come in and do an operational assessment. Typically, agencies know that there are problems, but they don’t know the source or the waterfall effect of the issues. Agencies do one of two things. Some just start fixing and fixing and fixing, and they’re potentially creating additional issues or bottlenecks or inefficiencies, or even regulatory compliance concerns. It is like a whack-a-mole effect. The other agencies will do nothing and continue to operate ineffectively or purchase additional technology in hopes to “fix” their problems. Neither way is effective.
Our team goes in and gets underneath the hood to determine diagnostically what is going on, find the source and develop a detailed plan to address the issues. We are strategic with solutions to increase optimization by affecting multiple areas of the organization with one solution, thus providing a waterfall effect of optimization.
Along with that, when looking at an operational assessment, agencies want to make sure that the plan has layers and goals. Agencies love to have the operational assessment, but they all still have full-time jobs. The internal resource to do the lift of the optimization typically is not there. They don’t have the hours in the day to do that plus take care of all their daily work.
When it comes to executing the optimization plan, making sure the right teams are working through the process — whether it’s a revenue cycle team, an intake team, an ops team or a business analytics team — is important for adoption. Technology in and of itself is a phenomenal thing, and it’s fast-growing and ever-changing. A lot of times agencies will implement amazing technology, but they’ll forget to keep up with the new releases, the upgrades, and updates. They are five iterations behind on their technology, and they didn’t even know it.
Nursing retention continues to be a challenge. How does good training help solve that challenge?
Maxwell: Training in and of itself is definitely an area that can provide a lot of ROI. If you give a staff person the tools, resources, support and ongoing education, you’re going to gain their commitment.
Our organization is also looking at utilizing artificial intelligence by going into the technology to map staff productivity and behavior changes. Continuing to leverage the EMR, and staff activity will be key to retention, especially with the staffing shortages that agencies are having. If agencies can identify those changes sooner, they will be able to deploy solutions to support staff and thus decrease turnover.
For example, an agency hires a new supervisor and now, three months in, the branch is failing. What they don’t know is that the supervisor isn’t engaged with the staff and the staff are frustrated, not feeling supported — and that is the source. Or they have a staff person who has been very good with timely documentation who all of a sudden is not syncing up and getting it in consistently. What they didn’t know was that their son or daughter was ill.
Some of these things have to do with just being humans. It’s happiness, and how do we track happiness? We can track happiness by our actions, within a day-to-day system, and then leverage the technology that we have in front of us.
2020 was a brutal year but there is cause for hope in 2021. What makes you hopeful for the home-based care industry in 2021?
Maxwell: It’s been a difficult year for home health and hospice, but I think that we are starting to see a glimpse of the light at the end of the tunnel. I believe that agencies are again getting to do innovative and creative things to better care for their patients. I feel that the pandemic really has pushed agencies to step outside of their day-to-day box — their comfort zone, as one might say. You can’t run the organization the way you did a year ago. It’s just not possible. Agencies have had to be creative and innovative during the pandemic and I am continuing to see that same momentum as the veil is lifting. I am excited to see what will come.
Editor’s note: This interview has been edited for length and clarity.
Maxwell Healthcare Associates (MHA) provides comprehensive and customized post-acute care consulting services that are scalable to any company’s unique needs. To learn how MHA can help your agency, visit maxwellhealthcareassociates.com.
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact firstname.lastname@example.org.