What's Wrong With This Picture?

You've seen the picture - the lonely elderly person sitting in a wheelchair, where the only companion in a lonely hall of look-alike rooms is the cold, clinical flourescent lights. Ask 10 people what they think of a nursing home, and for 7 the first answer will be "it reeks!" Ask anyone, or better yet, yourself, if that is REALLY how you want to go out ... for most the answer is "no way!"

Government regulators and patient / resident advocates see a different picture (I'm going to broad-brush this, so don't shoot me): money-grubbing corporations who short change patient care to feed large bureaucracies and pursue profits. They see this resulting in deficient care, neglect, sometimes even abuse or actual harm to a patient. Take it a step further, and you will actually find health inspectors who are only really concerned with writing "tags" (or in lay language, penalties) for observed deficiencies. Some advocates are SO strung up the line that they refuse to think rationally about their demands of operators.

Operators of facilities can be segmented multiple ways ... some for-profit, others not-for-profit ... some large corporate, some small religious missions ... etc. Regardless of tax status claimed, operators of nursing facilities MUST pay the bills to keep the lights on, staff employed, food on the tables, etc. And the long term care industry isn't a margin rich environment - generally speaking over 2/3 of a facility's reimbursement comes from Medicare / Medicaid funding - and that's a tough business. Most operators live in fear of the state - seriously. Why? Because the state has the self-appointed power to de-certify a facility - they can walk in anytime and slap around the staff however they please with little or no repurcussions. For anything ... if they see something they don't like, they can find a regulation that is violated in accordance to their personal distaste and write the "tag."

Additionally, most for-profit operators exist to feed the monster above them, namely the corporate bureaucracy. It's rife with all the traditional corporate titles ... "regional director of ..." or "corporate vice-president of ..." or whatever. You get the idea. There's a bunch of chiefs sitting up there that need to be fed. So the "administrator" of the facility lives a life not unlike the proverbial whipping boy (or girl) - one minute bending over to take it from corporate, the next minute bending over to take it from the state, the next minute from an unhappy staff member, next from a resident or family member, and so on. Paralyzed. An existence of schizophrenia - who's going to take the next pound of flesh?

Not-for-profits typically aren't much better. We are twitterpated by their warm and cozy mission statements, and somehow "not-for-profit" sounds so ... so noble. But think about it - if their profit margin (revenue minus expenses) is less than zero, where do they get the money to make payroll, buy food and supplies, pay the bills, the rent, the fines, etc.? From what I've seen, any excess margin goes towards feeding a bureaucracy - until you end up in the same dilemma of the for-profit gang - paralysis.

Finally we have our good friends at CMS - yes the Department of Health's fine organization titled "Centers for Medicare & Medicaid Services" (http://www.cms.hhs.gov). Lovely. This is the government division charged with, among other things, dispersing our tax dollars into the hands of providers of medical services for citizens enrolled for coverage in the Medicare and Medicaid programs. They are also tasked with dispersing as few of those dollars as possible, hence the low reimbursement rates, especially for Medicaid programs. But wait, there's more. They are also tasked with ensuring that the dollars do not end up in the hands of fraudulent ilk (this is good), and with taking back as much of the $$ from providers who can't jump thru all the hoops to keep the money (this can be bad).

Got it so far? Let's recap ... state regulators want to enforce the MINIMUM standard that is legally required of nursing home operators. Some regulators want to write as many tags as they can. CMS wants to spend as little money as possible in the rehabilitation or long-term care of our loved ones - in fact they want to take back funds already distributed to facilities for any error they can find. If operators want to keep the money, they gotta jump thru those hoops. Regardless of "for-profit" / 'not-for-profit" status, most organizations have a hungry bureaucracy that needs to be fed off of the earnings of most facilities. So what, Dave?

Yeah, that's the problem. Bureaucracies are so busy trying to get fed by miniscule reimbursement that wise investment in the facility often goes by the wayside. Administrators are so busy trying to please the bureaucracy, or state, or CMS, or whoever, that they don't have time to sit down and think about what would be best for the facility and its residents. State regulators are so busy trying to enforce the MINIMUM standard that the entire industry decides that the MINIMUM is good enough. And who gets the shaft in the process? Exactly - the resident. Our grandparents, or our parents, or our whoever ... they're the ones who get the short end of the stick.

So what's wrong with the picture? Here's everyone SAYING that they're out for the best interests of our loved ones - but most everyone is so pre-occupied with the other players or themselves that noone is paying any attention to where they ought. The system works fine, just not for the residents / patients. That is what needs to change. Big time.

I certainly don't think I have all the answers. I'm sure there are smarter people than me grappling with this problem. But I do have some ideas - some thoughts on the philosophy and models of long term care. Hopefully they'll be taken as just that - ideas from a visionary.

The New Path

So much for consistency in posts. Much has changed and there is much to tell - I'll do my best to mix it up.

In 2005, a good friend of mine [dN] and I were chatting about a mutual friend of ours [bP] who had left a very cush job @ a Fortune 500 company for a small upstart company in the long term care industry. The job: administrator of a skilled nursing facility ... err, a nursing home. dN and I were puzzled (and humored) at the change - however, after watching bP for a while, we discovered he was 1) happy and 2) not doing too shabby. So, in May/June 2006 the curiosity overcame us and we decided to check it out. Long story short, we both interviewed (dN before me - I wanted to see his reaction) and were amazed by the plentitude of opportunities. For me, I saw endless possibilities to do fulfilling work and to potentially change the long term care landscape.

So, in late August 2006 I resigned my post at Microsoft. I had a cush job in pricing management, and before that had been the sales / business controller for Microsoft's US small & medium biz sales & partner group. Only $4.x billion in revenue, over 1,000 employees, and a team of outstanding employees scattered from Boston to San Francisco. There were opportunities to go ex-pat and work for 3-5 years in Microsoft's emerging markets (e.g. Russia, India, China) as the controller for the country, etc. Nice income, outstanding benefits, and the stock was accumulating in ever bigger piles as I passed the vesting milestones.

Earlier in my career at Microsoft, I was present at a business plan presentation by the company's HR VP to Steve Ballmer (CEO). During the presentation, Steve went off on a rant about employee attrition - he wanted visibility to the "good" (people who need to be pushed off the boat) and the "bad" (people who we want on the boat but jump of their own accord). Still ranting, he complained about the bad attrition, and said something to the effect of "Why would anyone ever want to leave Microsoft - the opportunities to do everything are right here in this company?"

That question was ringing in my head as I sat in my manager's office and explained that I was leaving the gucci world of Microsoft to run a skilled nursing facility. Yeah, the jokes were great, especially the ones about bed-pans. But the answer to the question is actually quite simple - when you're doing work that isn't fulfilling, or feels shallow in terms of its contribution to mankind, it's actually an easy jump off the ship. And that's how it was for me - after five years of long hours, leadership development, outstanding performance, and helping the company add millions upon millions to the bottom line, I felt used and empty. There was nothing coming back from my work that motivated me to go even further.

Today I work for a small company in Texas called Keystone Care, a subsidiary company of the Ensign Group. The Ensign Group was formed in 1999 by a group of entrepreneurs and industry veterans who felt there was a better way to deliver long term care services, namely by eliminating the bureaucracy of corporate structures and focusing on leadership at the facility level. The premise: insert a CEO minded leader as the Executive Director of the facility, and let that person call the shots and build an outstanding leadership team. Once in place, let the leadership team determine what they need to do to become the facility of choice in the market they serve. The result: an impressive track record of buying struggling facilities and turning them into successful operations - both clinically as well as financially.

What was the attraction? It's too hard to put my finger on any one thing, but here were the main factors:

• Oddly enough, the first thing on my list was the humility level of the leaders. So many of the "leaders" at Microsoft were inflicted with a rockstar mentality - it was as if they never made it beyond the syndrome of all 2-3 year-olds where the world revolves around them. I wanted to see leaders who were genuinely humble - and I did.
• Fulfilling work: something beyond the intellectual busy work and Power Point games. Who really cares if Microsoft makes another $50 or $500 million? Bill Gates doesn't need it, and the stock is so diluted and moved by so many factors that financial performance doesn't do much for it anyway. Look at the stock price history vs. financial bottom line results over the past 6 years - see what I mean? No, there had to be more to my work than making money for Bill - it had to be real.
• Entrepreneurial opportunity: I wanted a long leash - room to take risk and develop new services, products or companies. So far, I've had the freedom to do all three.
• Outstanding partners: I wanted to see stellar business partners - other facility CEOs with a committment to each other's success. I wanted to know there would be help if I needed it, that I could reach out and get a hand anytime, anywhere I needed it.

I found all of this and more. For me, there was a natural fit.

What will follow in subsequent blogs are my experiences, as well as my thoughts as they've developed over the past 7 months. It is time for the entire industry to be overhauled - and I mean the ENTIRE industry. I have seen so much mediocrity and bureaucracy that gets in the way of delivering outstanding care. The prevailing long term care philosophies are archaic and sad - and that is why people are scared - scared of placing a parent or loved one in a facility and even more scared for themselves.