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New home health businesses have to navigate both existing industry challenges and the growing pains of being a startup.
Though these companies inherit these obstacles, one thing in their favor is the ability to enter the market with a fresh perspective.
“It’s like a fresh canvas where you’re not jaded by how things have been done in the past,” Elliot Kohn, CEO of Elevate Home Health Group, told Home Health Care News. “People like to say, ‘We think outside of the box.’ For us, there is no box because it’s about having a fresh set of eyes that allow you to say, ‘This doesn’t work, or maybe if we tried this we can accomplish X, Y and Z.’”
Elevate is a home health provider that operates in New Jersey, Florida and Texas.
The company is new to the home health block, so to speak. It was launched by Kohn and Steven Schwartz, the latter of whom serves as the company’s president, in January 2021.
Kohn has a diversified background that lends itself to having those fresh eyes. Years before launching Elevate, he worked as a chef for a catering company. When it was time for a career pivot, he wound up working at a nursing home.
This would start Kohn on the road to his current path. After years of working on that side of the senior care industry and moving up the ranks, Kohn had racked up a healthy rolodex of nursing home contacts.
When Kohn and Schwartz launched Elevate, these leads would become a key part of the company’s strategy.
Diversified backgrounds
Better You Home Health founder and executive director Bara Alsalaheen, on the other hand, entered the business with a background as a research scientist at the University of Michigan-Flint.
“I did research that was related to rehabilitation and health services for some time,” he told HHCN. “I also did some research on implementation science, which is basically how long it takes to deploy evidence-based practices to become mainstream clinical practices. Because of these collective experiences, I felt like a call to action to be in the field, doing what I know, rather than being in an academic environment.”
Dearborn, Michigan-based Better You Home Health is a Medicare-certified agency that serves several counties in the metro Detroit area. As another new addition to the home health block, the company officially launched in 2021.
Since launching Better You Home Health, Alsalaheen has to face many of the same challenges as his industry peers, including staffing.
“We’ve been trying to use creative staffing models to manage some of this challenge,” he said. “We’ve been utilizing different incentives for staff, offering the staff some sort of assistance to handle their non-clinical tasks. We definitely have a more robust office support system for staff to really allow them to focus on the clinical part of their job and not on the logistical part of the business, like getting a hold of the patient and scheduling a visit.”
As a company that takes on complex patients, the current reimbursement structure for home health care is another challenge for Better You Home Health.
“The current [Patient-Driven Groupings Model] model was based on reimbursement that was historically geared toward chronic lower-acuity patients, but now the [U.S. Centers for Medicare & Medicaid Services] has set up the reimbursement models in a way that I think disadvantages organizations from delivering care to higher-acuity, complex patients,” Alsalaheen said.
On its end, Elevate has turned its attention to new and recent graduates as a response to staffing shortages.
“We’ve been getting into the nursing schools when they were in their first, second, or third year and offering them the opportunity to do ride-alongs with us so that they can see the value of home health,” Kohn said.
Along with existing industry challenges, new home health businesses also have to concern themselves with having the right EMR.
“Picking the right EMR, depending on what your growth strategy and plans are, is extremely important because it can hurt you later on down the line,” Kohn said.
One thing that wasn’t a challenge for Elevate was finding an investor when launching the company. Kohn described Elevate’s investor as a “health care operator.”
“Financial backing can be a struggle, but having an investor that believes in what you want to do without being too overbearing is just amazing because it’s a checks and balances process,” Kohn said.
Better You Home Health doesn’t have financial backers, which Alsalaheen believes gives him a greater degree of control.
“I did not seek outside investors, a lot of it was bootstrapping personal funds,” he said. “We did not want to answer to any investor or any business person. As a clinician myself, I wanted to design our organization to function the way I wanted it to.”
Though they are new players in the space, growth is top of mind at both Better You Home Health and Elevate.
Better You Home Health is focused on increasing the company’s penetration in the market they are already in.
Meanwhile, Elevate is focused on growth through acquisitions.
“They are not new agencies that we’re purchasing, but ones that are either struggling or don’t have the best reputation,” Kohn said. “Three agencies we purchased required a total rebranding.”
Ultimately, Alsalaheen thinks Better You Home Health will no longer feel like a startup once the company has succeeded in solidifying its reputation.
“When anybody thinks of innovative home health and Better You Home Health comes to mind, I will no longer feel like a startup,” he said. “From a brand recognition standpoint, I wanted our company to be the Colgate or Crest of home health. That takes a lot of work and dedication.”
For Kohn, there are two key things that will move Elevate away from the startup label.
“Community recognition and census — I don’t think revenue matters here because you can be making a nice amount of revenue, but still be in the red or not earning any EBITDA,” he said.
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