Like so many providers that survived the COVID-19 pandemic, HCR Home Care feels like it is just getting its feet underneath it again.
Founded in 1978, HCR Home Care is a provider of home care and health services across New York state.
Suzanne Turchetti, the recently appointed president of the company, is focused primarily on education, process improvement and addressing the critical issue of margin compression in her new role.
Turchetti sat down with Home Health Care News to chat about the company’s nearly 50-year history, the importance of staying curious in an evolving industry, how HCR uses data to improve efficiency and much more for this month’s episode of Disrupt. Below are highlights of that conversation, edited for length and clarity.
HHCN: Before we get into the meat of our conversation, tell our listeners a little bit more about HCR Home Care and your story.
Turchetti: Our founder and current board chair, Louise Woerner, established HCR in 1978 initially as a personal care business. She was living in Washington D.C., at the time and she was trying to find care for her father in Rochester. She couldn’t find a company to help her out, so she decided to start one with a $3,000 cash advance on her MasterCard. She couldn’t get a loan because she was a woman. She didn’t have a male co-signer at the time. She started the company with a home health aide, a nurse and herself.
In 1988, we became a certified home health agency and we’ve grown pretty significantly over the years. I think a lot of it has to do with embracing technology early on. We actually got our first computers in 1982, which is very early in the technology phase.
When I started with the company in 2005, we were only serving in one county and we had maybe 200 employees and had a nice little business going. But Louise saw that we were way too small and if we didn’t scale the business, we really weren’t going to make it as the industry consolidated. What we started doing in 2009 is we started acquiring county-run certified home health agencies.
There was a big push at that time for the counties to get out of the home health business and they were all putting their agencies up for bid in an RFP format. We bid on all of the county-run agencies that were up for purchase that were contiguous to Monroe County and some others across the state. That’s how we ended up being one of the largest agencies in upstate New York.
Today, we serve 25 counties for personal care and 22 counties for home health care. It’s grown significantly since I started in 2005. I saw extreme growth over the last nearly 20 years.
I started out as the executive assistant to the CEO and I worked my way up. I took on different roles and responsibilities throughout the organization. I think I have overseen every single department in the entire organization over the years in one way or another. Louise mentored me and groomed me into her successor and she stepped down at the end of last year and I took over. It seems like it has been a long time, but it also feels like it has flown by.
I’ve talked to a lot of leaders over the years, and one thing that comes up frequently is the value of working in different parts and divisions of a company. Those who have navigated through various roles within the organization often express how beneficial it is once they reach leadership positions.
It’s funny that you mention that because I get this question in orientation all the time from new employees. They ask, “How did you do that? How did you go from executive assistant to president?” That is one thing I always tell them. My short answer is “I never said no.”
When somebody asked me to help out, volunteer, stay late for a project, assist on a grant or lend a hand in a certain area, I always said yes if I was able to. I learned so much and I’m naturally inquisitive as a part of my personality. Just being naturally curious, I think, is extremely important if you want to grow within a company. You can’t just operate inside your little box if you want to understand what the big picture is.
I also saw that HCR is part employee-owned. Can you explain how that works?
HCR is a little over half employee-owned. We started our Employee Stock Ownership Plan in 2004 — the year before I started — and it was really designed to be a long-term benefit to retain good employees at HCR.
When HCR does well and we have a surplus at the end of the year, that money goes back to the employees in the form of shares of the company. Then, when they retire or leave the company after a certain period, they can roll their money over into another tax-deferred account, or if they’re at retirement age, they can just take a distribution.
It’s a way to entice our staff to share in the success and be part of the success. It encourages them to think like an owner, finding ways to save money, improve efficiency and contribute to the organization’s success. Can you refer to another employee or a patient? Little things like that help foster an ownership mentality, making a huge difference in our operation.
Has that made a marked difference on retention?
Pre-COVID, I would say yes. Right now, I would say no, because we experienced extremely high turnover during COVID, much like many other agencies did. Our profits were significantly decreased during COVID compared to pre-COVID, so we haven’t been able to contribute as much to the plan. I anticipate that changing as we keep rebuilding, but COVID really put a dent in that.
Typically, I would say absolutely, because if you can get people to adhere to that culture, and then they see numbers when they get their statements, they say, “Okay, I’m in this for the long term.” But I think COVID took a lot from all of us and I think that was one of the things that hurt our ESOP and our ownership mentality there.
I do think, though, that it’s a great model for home care specifically because there are a lot of workers who really care about the mission, but they’re always torn between the mission and being able to make more money elsewhere.
With productivity requirements and the constant demand for more, I do feel that in some ways it could drive people away. However, if they love home care, have a passion for what they do, and believe in the mission of HCR, they are likely to stay. I’ve heard this sentiment from many people.
I make my calendar available every month for employees to book what I call “employee chats with me.” During these conversations, I get the best insights and can feel their passion for home care and our patients. Even if they’re disgruntled with HCR for the day or having a tough week, their dedication to our patients keeps them here. Engaging with them, understanding their challenges in the field, their pain points and providing support helps ensure they feel heard and supported. I always say we have the best employees and when I hear their stories one on one, I am sometimes speechless at what they’re up against and what we’re asking them to do out there.
One thing I also wanted to note is that you have a care management piece as well. Care management is something that home care provider leaders have emphasized as crucial, yet it’s still relatively rare as an offering across the country. What do you think the value is in care management for HCR?
Our care management is something that originated from the Medicaid redesign team in New York state during the Cuomo administration. Its primary goals are to reduce Medicaid spending and address the social determinants of health. We contract with a health home, which serves as a fiscal intermediary for Medicaid. Together, we work with Medicaid recipients facing various comorbidities and social determinants that hinder their ability to manage their health effectively.
It’s been a game-changer for us. It allows us to refer our certified and personal care patients into the program while also receiving referrals from there. It’s proven to be a valuable initiative to help individuals in the community who may be struggling with managing their health issues alongside other challenges they face. The program started about 10 years ago and has been growing ever since.
How are you grappling with such a volatile payer market when dealing with Medicare home health, and also on the private pay side of things?
We know that there is going to be a proposed cut to Medicare every year. That’s something we’re used to dealing with. I think one of the biggest issues we’re having, and I think this will be one of our themes for 2024, is how are we going to deal with this margin compression issue? That’s a huge problem for us.
We’ve had to increase our wages to retain and hire staff that we lost during COVID. On the other hand, our rates have not increased — especially with our commercial payers — as quickly as our wages have increased. Using the data that we have, we tried to go to the payers and say, “Look, this is what we’re doing for your members. We’re keeping them out of the hospital, their outcomes are better after we’ve done a few episodes with them,” or whatever the case is. We usually try to present the value that home care adds to try to increase our rates with them.
It’s definitely a battle, but it’s something that we have really tried to focus in on. Sometimes it’s tough, especially with the big national payers. We’re a big player in New York state, so meeting with those New York state-specific payers is a lot more doable than meeting with a UnitedHealthcare, for example. We’re just too small to be on their radar, if that makes sense. We’re too big and too small at the same time, so we struggle with certain payers. Proving the value that we bring to the table for their members is the best way to increase our rates with them.
I’ve talked to a lot of providers, even some of the big ones like Addus, and they think there’s a massive value proposition in layering on home health with home care, in terms of what they can do for payers by offering access to both of those critical home-based care services.
Oh, absolutely. And I think that’s a really key piece of it because once their acute episode is over and we discharge them from the certified agency, they may still need help with things like activities for daily living, bathing, dressing, ambulation — those types of things that we can help with on the personal care side. It may not be something that they need help with every day, but it’s certainly a support that we can provide once that acute episode is over. Showing them that we have that continuum of home care services here is definitely a huge differentiator for us.
You mentioned data. Data is notoriously something that the home care industry at large has not been great at – data tracking, and gleaning insights from that data. It seems like HCR is a little bit different. Can you explain how you’re utilizing data right now?
Obviously, CMS data is extremely delayed, so it’s very difficult to rely on that for any sort of real-time trending. Sometimes I cringe when I look at the publicly reported outcomes in the STAR ratings because I know that those are a year old. Maybe that’s not who that agency is now; they’re a lot different than who they were back a year ago. So, to me, that’s very frustrating — but it is what it is.
But we do have so much data here. Our EMR is on Homecare Homebase (HCHB), and we supplement our data with SHP so we have a ton of real-time data. Between HCHB and SHP, what we can produce down to the clinician level is unbelievable. And the challenge, though, is turning that data into something that’s actionable, something that we can pass back to our clinical leaders and say, “This is what you need to do.” Because if you’re just sitting there looking at data, sometimes it’s just overwhelming to the point where you’re like, “I don’t even know what to do with all this.” Having our finance team and our analytics team that can really drill down and produce some actionable ideas that can drive our outcomes and our results is key to managing that data.
You can have all the data in the world, but if you’re not using it, then it’s pretty much useless. For instance, people are talking about AI a lot, but even the AI people are saying, “Hey, if you’re not tracking things, if you don’t really know what’s going on at your agency, AI is not gonna be able to help you. Because we have to feed the AI machine something in order for it to help you out.” So I’m trying to figure out if you’ve thought anything about AI and how that could help out with your organization in the future, or are we not far down the road enough?
We talked a little bit about it. I’m particularly looking at it in our billing and insurance authorizations departments, evaluating some of the organizations that are helping agencies like us do it. But we are not implementing anything yet. But it’s definitely something on our radar.
As we near 2024 – I’m curious about what you’re really focused on heading into 2024. What are some of the trends that you’re going to be keeping an eye on?
I have been saying that 2023 was a big rebuilding year for us. Recovering from those couple of years of high turnover. New York State had several wage mandates that we needed to comply with on the personal care side.
So, I feel like now that we’re back to that kind of baseline, we can start focusing on some different things like process issues, communication and some re-education for our staff. I think during COVID, we were hiring people so fast and fast-tracking them into the field to take care of patients and we may have missed some of the key pieces — especially if they were new to home care — that they might need some re-education on.
I think 2024 will be like a back-to-basics type of year where we’re focusing on education and process and continuing to grow, of course. But that margin compression piece is the biggest factor that we need to battle next year. And going after those rate increases will be extremely important – to be aggressive with that.
Is there anything you’re doing internally to sort of ease those margin compressions?
Efficiency in the office has been one of our key focuses for 2023. Really, right-sizing the staff to ensure appropriate staffing in all support areas for the organization – scheduling, billing, insurance, HR, IT. Making sure we don’t have excess staff or are not short-staffed, for example.
We’ve tried a lot of different things to entice people to stay. We started a bonus program. We’re doing incentivization apps for some of our home health aides. So there’s a lot of cool things that we’re doing on the workforce side to try to get people to stay engaged and adhere to our culture.
Do you have a prediction for 2024 about the home care industry, or the home health industry at large? Some of the things you’re thinking about that may change or something you think will define one of those industries moving forward?
I think the appetite for home health is going to continue to grow. I think COVID shone a light on the desire for people to age in place in their homes. A lot of the literature is saying that by 2025, much of what’s being done in outpatient facilities and in hospitals is going to be done in the home.
When you look at the hospital-at-home programs growing in the country, I think there is a shift to doing much more in the home. But our job as agencies is going to be to be prepared with staffing, education and technology in order to meet that need.
I think home care has historically been one of the last thought-of parts of the continuum of care. But with COVID, it’s really come to the forefront, and I think there’s going to be an increased amount of attention on home care as consolidation in the industry happens, as payers are looking to find the most inexpensive way to care for their members. It’s a good time to be in home care, in my opinion.