How A High School Football Coach Landed His Home Care Agency On the Inc 5000 Fastest-Growing Companies List (John Bennett Pt. 1)

[ 00:00:06 ] All right, welcome everyone to Home Care U. I'm Miriam Allred, Head of Partnerships at Careswitch. Thanks for being here and thanks for listening, whether you're here live with us or if you're listening to the podcast afterwards. Great to have you! A quick shameless plug: if you're listening on a music or podcast site, uh, drop us a review. We love to hear how your what you're getting out of this podcast, what you like, what you enjoy, and what it's doing for your business, so drop us a review. Also, for those of you who haven't gone to Careswitch.com to subscribe and join our email list to get the weekly podcast recording straight to your Inbox along with some other great resources, uh, people are always asking us, you know, how to get these each and every week so, Careswitch.com/subscribe.

[ 00:00:52 ] I say it every week, I'm really excited to be here and stoked for today's guest. Um, I've been trying to get him on for months; he's a busy guy. Um, we were just sharing you know updates on LinkedIn a lot of people uh know John have heard about him; he's a little bit quieter maybe a little more under wrap in the industry but nonetheless as sharp as they come and so I'm really excited to have him on the show today. Today's guest is John Bennett, the CEO of Sunny Days in Home Care. Up in the Western Pennsylvania Pittsburgh market, John thanks for being here. Hey; thanks for having me, and I'm very excited to get on here and have a great conversation with you. Awesome!

[ 00:01:32 ] Well, I want to give you a couple minutes to talk a little bit about your background before home care so everyone's aware we're going to approach this kind of like a 'How I Built This' episode for any of you that have listened to that show. What John has done and what he's built is unlike many others, and so I want to you know probe him about what he's done and what he's built. So, I want to you know probe him about what Sunny Days In Home Care has accomplished so, let's start with your background. Introduce yourself and your background prior to entering home care, yeah. So, I'm happily married for 13 years like I married young, and I have three children: nine; six; and four. They are just fantastic, and you know I really enjoy helping people out, so I used to be a high school math teacher.

[ 00:02:22 ] I taught geometry and statistics and a lot of people cringe at that uh they probably maybe didn't have the greatest experiences, particularly with geometry uh that's usually people's least favorite subject in high school but I did teach those and I enjoyed it a lot, uh, and then I also um was a head football coach, high school football coach, which I still do part-time now, um, and I was an athletic director. Then, I started my own asphalt business when I was 17, um, in high school too. I played a bunch of different sports and was involved with a lot of different extracurricular activities, and I needed a job that I could kind of make my own schedule and needed to be flexible, um, and so I started an asphalt business, you know, doing like seal coating, line striping, uh, that type of thing.

[ 00:03:03 ] I did that for five years in Pennsylvania and then I moved to near Ocean City, Maryland. Five years and that's where I was a teacher down there, and I restarted my business uh with asphalt in the summer down there, and I really enjoyed doing that. I learned a lot um from the business perspective of what to do and what not to do, how to interact with people, how to deal with unsatisfied individuals um, and as well as when you're teaching, when you're teaching, you have to be very adaptable and flexible, and you don't know just kind of like in the home care industry, you don't know what you're going to get on a regular

[ 00:03:36 ] basis when you walk into a classroom, just like all of us when we come into you know our office or in a home, we don't Know what we're going to get into, uh, so being able to, uh, you know put yourself in someone's other, you know, someone else's shoes and, uh, just really kind of meet them where they are and see what's going on and deal with the challenges that they're going to dealing with and then get them to accomplish whatever goals are tasking you to get them to accomplish. I learned a lot from both teaching and, you know, from my asphalt business and coaching as well with all of that so that's kind of my background um, you know, where I used to be uh and really enjoyed that I really enjoyed working with people um and particularly with teaching.

[ 00:04:10 ] And coaching, I really enjoyed helping individuals, and that's something that's really important to me. Amazing! Fast forward now you're an executive of a home care company - I know, in what world did we all think you were going to be a home care company? We'd be in home care but yet here we are so talk to me about how you came to be running this company, you know where it all started, how you got to where you are today. So yeah, it's a great, great question that's uh an interesting I saw the title of the podcast and that's an interesting hook, it usually piques people's interest um so my uh my in-laws started uh Sunny Days in Home Care in 2011, and my father-in-law did marketing for a national home health agency, um, and they were focused on money and the bottom line and didn't really seem to care too much about people, and I'm sure we can all think of companies that are like that.

[ 00:04:58 ] He was very frustrated with that, um, and ended up deciding he wanted to go start his own uh his own business. He wanted to get into the home care sector because he felt like he could really help a lot of people that had needs, so he started the business. He was the first caregiver, um, he was working overnight shifts not really sleeping at all in his mid-50s, um, and he was going out and Doing marketing and recruiting and interviewing today, um, and he, uh, you know, he really grew the business from ground zero, so he's, uh, you know, really... I see someone here comment there from Pittsburgh originally, so Patricia, that's awesome, go Steelers, um, and, uh, so he, he really did that.

[ 00:05:38 ] And then my mother-in-law, um, she kind of did the bookkeeping on the back end, the bookkeeping, some of the compliance stuff, that type of thing, and eventually quit her job to help him, um, as they grew and continued to expand, you know, once they 50 hours, you know, then he started to talk about, you know, having her come on board, um, and so they Started it and, uh, really did an amazing job and got involved initially; it was a 100% private paid business, um, and then he had an opportunity to get into Medicaid, um, the Medicaid reimbursement rate at the time had actually been lowered, um, by a little bit, which is crazy, you know, with the rising cost of everything, but he viewed it as a good opportunity to grow, um, and even more importantly, and this is something that's still really important to our values; is

[ 00:06:27 ] he had my father-in-law and mother-in-law, David, and Evelyn, from the get-go, and I've carried on this mantra: we believe everybody deserves care, regardless of what their income level is, and that's something that we've been really passionate about, you know. We take care of some people in really some dilapidated conditions, but they want to remain at home um, and obviously if it gets to a safety issue then you know then there's things that happen but when it's not a safety issue and it's just kind of a dilapidated condition, a lot of people still want to be in their homes and we're there to meet their needs. So, we grew and expanded um, and got to in 2015 I came on board um, and at the time we were around 5,000 hours, and I actually came on board to franchise um, and I left teaching and I said, you know what I've done asphalt?

[ 00:07:15 ] I have some, you know, business background. We'll give it a shot. My wife and I just had a daughter, so we wanted to move back to Pennsylvania and uh, you know, we said, all right, well I'll give this a shot. So, I got into franchising, we had a location in Chicago, um, had another one in Wisconsin, we were looking and opened up kind of like the Great Lakes region is kind of where we were looking for um, heading that direction and um, it just wasn't working. Um, we had some nice people, they weren't necessarily following all of our processes and systems um, and we decided there's not enough you know there's not enough control in franchising at the time is what we felt some people have had success with it

[ 00:07:52 ] 74 other home care agencies that were franchising and it was very hard to sell somebody too well I go with you you've only got one other location when you know this company has 86 or they have 920 or you know whatever some of the some of the big franchise players have so that was difficult uh so we decided to potentially get into the acquisition game and I had gradually started to take over more of the business um from when I started so when I started at sunny days um this may some of you may relate to this some Of you may cringe, nothing was electronic. We didn't have a single form that was electronic; any documentation it was all paper. And if we wanted to make a change, we got the whole thing out, everything was whitewashed out.

[ 00:08:31 ] We wrote on you know, the new information, um, and that kind of drove me nuts, um. So, my first month on the job, I literally spent retyping every document in the company, and that was something that was really helpful for me, uh. I really learned all of the processes and how things work just having to sit there and type up a client assessment it's not the exciting task in the world to sit there and retype and format. All the boxes and everything, but I did that, and I learned a lot from that um and then started picking you know, picking my in-laws' brains and particularly my father-in-law about growth, and really digging into why we did certain things the way we did them.

[ 00:09:08 ] And I'm a big proponent of efficiencies and figuring out you know, if there's something we're busting our tail at that takes us eight hours, but we can change the process and be just as successful if not more and it takes us four then that's changed the process. So that's what we started to do, and then I started to get involved, and we in 2017, I left franchising, and came in, and We had started the year at 5,000 hours of care per week, peaked up to nine, and had dropped down to 6,700 when I got involved. Um, so our hours had been going down. It's just because we'd been growing just by like busting our tails and just gritting our teeth, and you know working as hard as possible.

[ 00:09:45 ] And we didn't necessarily have the processes and systems in place to scale. So, I started to bring those in, and I started to bring those in, and I started to with a great team in place to carry them out. And we started to grow again, and kind of continued over that for four years, and got to the point where March 1st, 2020, I had taken Over most of daily operations at that point, uh, still some stuff with financials my father-in-law was doing, my mother-in-law was retired at this point um, and I'm really kind of running daily ops for a few years now. March 1st, 2020, I became CEO, and that was really exciting. And listening to this march 1st of 2020 everybody was in a pretty good mood, and then two weeks later Covid happened.

[ 00:10:27 ] Um, and I really got baptized by fire through how to make some difficult decisions during Covid but it was there's that saying that you know smooth seas don't make for a skilled sailor, and I think anybody that was in the home care industry Pre-COVID and post-COVID can relate with that, and I really learned a lot about how to deal with a lot of things that there wasn't a manual for. It wasn't a checklist; I couldn't go on and say 'Hey, how'd you deal with a situation before' because we were all dealing with just crazy stuff that no one had experienced before. So, really learned a lot during the last few years from that, and it was a great experience it was stressful and difficult, not always enjoyable.

[ 00:11:05 ] Um, but definitely learned a lot from it, and that's kind of got me to where I'm at today with sunny days, fantastic! That's actually one of the first questions I want To ask after you shared all of that is early on where, where, and what did you learn from like you were coming out of like no home care experience to all of a sudden like getting asked to be brought in to like start trying to franchise I'm sure you've learned a lot over the years like through mentors or consultants, you know your father-in-law but if you can recall your early days and maybe your first couple of years what were your go-to resources to just learn the industry and start getting versed in home care yeah so I pick my father-in-law's brain a lot um and I like being in the home care industry and I've been in the home care Industry for a long time, um, and I like being in the home care industry and I've been in the home care industry for a long time.

[ 00:11:52 ] Devil's advocate kind of drove him nuts a little bit but ask him why we were doing you know whatever our process was, you know, where this is how we you know recruit caregivers right? Why are we doing it this way, you know? And then he'd tell me, and then I'd start asking questions. Well, what do you think about doing it this way? And I really learned a lot, kind of that the iron sharpens iron mentality really went back and forth with him and figured out how to improve things just from kind of playing devil's advocate. And, and picking his brain, I got it. I picked his brain a lot. And so that that was

[ 00:12:22 ] one area um, I'm kind of a nerd too, so as we were franchising for familiar franchising you have the franchise disclosure document um, and there's a couple states where you can get there by law they post the franchise disclosure document of everybody that's in those states so I just read franchise disclosure documents and see what other companies were doing um, and then I also googled, you know you can google like pdfs or dot doc and you look at those particular types of files I'd google dot pdf and I'd look up home care handbooks that are posted online. Um, whether they meant to post them online and show them to everybody or not, and I

[ 00:12:57 ] would sit there and I would read these handbooks sometimes it was a caregiver handbook, sometimes it was a client handbook, uh, some of it was company-wide handbooks, um, and I, I just start reading these handbooks, um, and you learn a lot of information, you know, as you, as you do that, and then really started picking our team's brain out in the field, um, I just, I just like asking the question, why, you know, when you talk about a process and people say this is what they're doing and I say why, you know, a lot of times well this is what we're supposed to do Or this is my job or this is what we've

[ 00:13:25 ] always done, um, is it the best you know, and people say oh yeah it's really good, and I like to ask the question well if there's one way you could improve it, I understand it's a 10 out of 10 but how do we make it an 11, um, if there's one thing you could do to make it better what would it be so really a lot of questions and picking people's brains a lot, um, a lot in our company and a lot of reading, um, I didn't necessarily talk to too many outside home care agencies when we first started since then I'm involved in a lot of things and I've been involved in a lot of things and I've been involved with uh the mastermind Group which has been amazing, we can talk about that too at some point, but um really a lot of on I was asking a lot of questions and reading a lot.

[ 00:14:01 ] There's some good books too, Shelly Sun um who uh is one of the major players in the home care space with her with her franchise um she um she's done some great stuff and she has a book that I read so that was really helpful too um so just that a lot of reading a lot of information gathering awesome maybe that's why I gravitate towards you so much, just like inquisitive and asking questions and obviously I'm a podcast host but I'm biased of like that's my learning love language is just Like, talking to people and asking questions, and I would argue or I would imply that like, that's how I probably have learned

[ 00:14:35 ] home care the last five six years is just talking to people like yourself, reading as much as possible, doing the due diligence, but really just asking people, you know what they're doing, why they're doing it, how can we do it better and I think that's to me, I just observed that like that's part of what's led to your success is just being so inquisitive and you say devil's advocate but just challenging everything, you know it's so easy to get stuck in our ways and to do things the way things have always been. Done, but you know where does that get us? Like let's always you know be pushing the boundary and trying to do things and thinking about things differently, and I think that's attributed to a lot of the success.

[ 00:15:12 ] So thanks, thanks for sharing that was just interesting to hear, you know what you’re learning methodology and sources were early on, I want to talk about um you Okay that when you came on, uh 2015, the business was doing about 5,000 hours weekly, just so everyone's clear how many people were in the office. What gives us just a little bit more understanding of like the scope of when you got brought on, who else was there, um, about how many employees, et cetera. Yeah. So, at the time when we started with 5,000 hours, um, we had my father-in-law, who was the president. Um, and then we had an office manager who also oversaw compliance. Uh, we had an operations manager, and then we had a head of finance.

[ 00:15:55 ] So there were four of us in the office. And then we also had four field managers, um, which is something that maybe some of you use that terminology, but it's kind of a unique thing about our model that we can get into as well. Uh, so that's, that's kind of what we did with at 5,000 hours is those are basically, we have, and we had somebody handling on-call at the time. We had one on-call manager that we're, we're, we're big proponents of a live person, who lives in the area, answering phones after hours on weekends, um, to make sure that we're, we're covering as many shifts as possible. So that was our management team if you will. Awesome. Yeah. Just good context for understanding.

[ 00:16:32 ] Let's talk more about, you know, what was going well and what wasn't going well. You already talked about everything was on paper, which is a great place to start, you know, just digitizing and automating. What else, what else wasn't going well when you came in? What were some of your other early observations that you thought like, well, we need to do this? Um, and then we had a, we had a to iron this out, you know, first. Yeah. So, we were not standardized in our training for our management team. So, we had four field managers out in the field, kind of managing different areas. Um, and, and, and our model, our field managers, I'm going to reference them a lot. So just to kind of explain what they do. So, our field managers are responsible for marketing and bringing on business.

[ 00:17:12 ] They're responsible for doing client intakes, client assessments. Um, they’re responsible for recruiting and onboarding caregivers. And then they’re responsible for managing the schedule and the ongoing relationship between the caregiver and client. So we kind of take it’s almost like a mini satellite office. Um, but we have a lower census or lower caseload, um, for those field managers. Cause we really believe that if they’re the person who’s done the client intake, another person who’s interviewed the caregiver, they’re the, they know both parties, they know if they’re going to be a good match or not, and then they can maintain and manage that relationship. What's the ratio while you're talking about them? What's like one field manager to how many employees are?

[ 00:17:49 ] One field manager typically has around, um, 40 clients, um, 30 to 50 is kind of our, our range, 30 to 50 caregivers, um, and managing anywhere from a thousand to kind of 17,000 hours of care per week, um, is, is what their range is. So, some of them, we have, you know, some exceptions that are up to 2,000 hours, someone who's down in, you know, 600 in a territory we're trying to build, but that's kind of our average range. Is it average? I'd say 14 to 15,000 hours per field manager and probably 40 to 500 hours per week. So that's kind of our average range. Um, and clients, you know, with it and give or take a few. So that's, that's kind of their sentence.

[ 00:18:25 ] And it really allows them to be personable in the community, have that small town feel, even as we continue to grow and scale, it still feels like we're, you know, a small family-run company and we want that. That's important to us. I cut you off. So yeah, keep going. Yeah. So, so as far as what, what I, they all kind of had different levels of training and that was obviously not good because we'd say, hey, why aren't you doing this? And three people would say, no one ever trained me on that. And the other person was like, this is one of the most important things in my training. So, we didn't have a standardized training process. We didn't have a standardized onboarding process, a standardized intake process.

[ 00:19:00 ] So we started to standardize everything and then retrained people in the areas that either they weren't trained on before, or maybe they needed some remedial training to make sure that they knew what to do. So really, really emphasize that the other area was efficiencies with getting information. So, we would go do an assessment. We, we do everything kind of out of one office, still with sunny days. So, we go pretty far. We're a couple hours from the office each direction. And so, we'd have somebody do a client intake two hours away. Well, how are we going to get that paperwork at the office now? Right. Cause they're working kind of remote. We don't expect our management to be in our, our field management to be in our office every day.

[ 00:19:39 ] Our office staff is, but our field management's not. So, we tried to figure out how can we collect this information more accurately? So, we started, we built out our own app. With this platform called Snappy, S-N-A-P-P-I-I. There's, there's a bunch out there, but Snappy has been really great for us. And all it is, is like a form wizard, a data collection app, but it works when it's, when it's offline. And then when it gets back online, then it uploads into the cloud and it's nice because we have it set up. So, it goes to the cloud, and it gets emailed to the client's family member, right? If we're doing an assessment, it gets emailed to the person completing the form and it could go to my compliance manager or operations manager.

[ 00:20:19 ] Whoever it needs to go to instantly. So now we weren't wasting time with people printing out stuff. We weren't wasting time with people having to bring it down to the office. That was taking away a lot of time. Now it's all automated. And, and there's a lot of different things like that, that I saw that we needed to be more efficient with. I'm a big proponent of automating the heck out of everything that you can. This is even before kind of AI, right? Automate the heck out of everything you can so that the people can focus on making sure that clients get the care they need, and caregivers are in the best environment possible. So that's something we, and I still challenge my team now with this: Is there something in our company?

[ 00:20:55 ] You know, we talked about this a couple of months ago at our team retreat. Is there something in our company right now that we're doing that maybe takes three hours and should take one hour or maybe takes two hours and should take five minutes that we can automate it. And I think it's good to always review that really annually and see, is there anything and ask people, ask people on your team about that and don't be afraid to get their feedback either. Because that's, it's important to hear what they have to say. We've got a lot of good ideas from the bottom up, you know, as we did. And that was the other thing, just asking people, what do you think we can do better? And not being afraid.

[ 00:21:27 ] I think I watched a Simon Sinek video the other day that said feedback does not equal criticism. And a lot of times, you know, people think feedback equals criticism, and sometimes people can be harsh with their feedback, but if you really want to learn and get better, you have to take it as feedback doesn't equal criticism and take it. How can you make it better? So, we really set ourselves up to be open for that. But that, those are the big, the big things I would say is, is making sure that we were uniform across the board with all of our processes and training, and also that we became really efficient with how we collected all of our data and information. And I guess the third thing is we weren't tracking data.

[ 00:22:01 ] Former stats teacher, right? There's that commercial with Matthew McConaughey, 'data is the new gold,' right? But even, even seven years ago, collecting the data is crucial because you got to be able to figure out what your trends are. And if you spend money on something, you're trying to rule out something, how do you know if it's working or not? Right. Or how do you know if something's that we've always done it this way and now it's not working? Well, why is it not? Data will eventually tell you the story. You got to dig into it. So just, we started tracking a lot of different metrics and really started to put together, what are our actual KPIs that we really need to focus on as our company?

[ 00:22:35 ] So that's, those are kind of the three big things I would say. Yeah. Couple thoughts. And then a couple of follow-up questions on each of those. My first thought is there's still too much paper in this industry today. So, it's great to hear you talk about, you know, that challenge from the beginning, what you did to like to overhaul those processes, digitize, automate. I'm biased, you know, I work at a software company, but I still think there's way too much paper and we've still got a long way to go. My hope is, you know, five or 10 years from now, there is no more paper in this industry because like you're saying there's, there's a lot of documentation. I don't mean no, you know, paperwork, you know, equates to less documentation.

[ 00:23:13 ] That's not right. It's just digitizing everything, you know, making it easier for the employees, for the clients. For the families, keeping everyone up to date in real time without waiting for paper trails to make their way out to people. So, I think that's great. And I also vocalize that because people are still struggling with, and with this, and that's okay. Know that, you know, there's, there's still room for a lot of improvement for most businesses in this industry. So just neat to hear you like downloading on that. I do want to. It's not hard to honestly, like, if you're like, how do I start? To interrupt you? But if you're like, how do I get myself to use less paper? But you're welcome. Welcome to connect with me.

[ 00:23:51 ] It's really not that hard to do. It can seem intimidating, but setting up, there are a lot of different platforms out there that can kind of be like form wizards for you to collect information. It's re it's really not that hard to get set up. And it's actually, it's, it's a big-time saver. You know, I would say for us, it saves a whole position to be honest with the way we do it. So, it's, it's, it's crucial. So, if you're not doing that, whether you have 800 hours or 8,000 or 20,000 hours, it's, it's worth doing. And I would say on top of the time savings, it's also like a satisfaction boost because everyone wants access to that information. You know, the employees don't want to be left out of the loop.

[ 00:24:29 ] The family members want to know, you know, the second something happens or changes, it keeps everyone in the loop. And so naturally, satisfaction of all parties will increase. And we're always talking about, you know, client and caregiver satisfaction. How do we make everyone happier? I would say digitizing and automating documents is a pretty easy, like you're saying, safe place to start and will have a really large impact. I want to talk about the field managers. This is everyone. Yeah. Has maybe a different version of this role, but I want to like dive into this a little bit more. What is the demographic of these people because they're client and employee facing, I think you mentioned they do schedule too. So, they wear like a lot of hats.

[ 00:25:09 ] Who makes a good field manager and who are your field managers? Like what's their background, et cetera. Yeah. So, half our field managers are former caregivers. Currently we have 14 field managers and we kind of have a growth track for them where we have somebody who's a great caregiver. If they're interested in moving up our on-call position, something a little more turnover there than I would like. But we typically see if somebody can handle on-call, you know, you're going to call it nine o'clock on a Friday night. Somebody called off the client's daughter's upset because no one's at the house now. And how are you dealing with that situation? Right. So that's a good metric for us to gauge, you know, how can we get this person to deal with stressful situations and prioritize, you know, meeting the client's needs.

[ 00:25:52 ] So we kind of, you know, develop them through that process. But really our field managers, so we have a tier model set up, they have a base salary. And then they have to manage at least 600 hours of care per week to be a field manager. Once there are 800 hours of care per week, then they can get into what we call tier pay. And for every $100 per week on top of that 800, they get an extra $50 for tier pay. So, we cap them out. We're not going to use them at 2000 hours, because we've found once you get more than 2000, it just, the quality drops down. Right. And so, we we've done that, put that in place. So, people real-time, it's not like a quarterly bonus.

[ 00:26:29 ] Their paychecks literally fluctuate based off the number of hours that they're completing. And the, the nice thing about that is, we've really emphasized shift coverage. You know, our shift coverage for the last six years, since we started tracking it, has been 98.5 plus um and that's really important to us um for all the hours we're scheduling um we factor out canceled by client because a lot of times that's out of our control um but the rest of the hours we're 98.5 plus shift coverage and we pride ourselves on that, it's one of our top three KPIs is shift coverage um because we view it and I this is coming from some another owner I've

[ 00:27:08 ] talked to before and he said that when you go in and you tell somebody you're going to be there Monday, Wednesday, Friday from 7 p.m. to 7 a.m. you're making a promise that you're making with that individual or their family member and you don't want to break a promise um so we've really kind of viewed it that way and shift coverage is key so you have to be a highly motivated individual to be a field manager, you really you got to be able To relate and connect with your caregivers, um, and you have to be really focused on delivering care. You got to be compassionate, you really... it's somebody who's got a

[ 00:27:43 ] great work ethic, um, who's not afraid to go in our field managers, our emergency backups so if there's a call off and they can't find anybody else and it's a high priority client they'll go in and at least do priority care for a few hours at a minimum, um, because it's that important to us that we're in there making sure that we take care of people. So, they're going to be able to do all of that plus go out and market... I mean it's a very unique position. They have to really be able to kind of, kind of change, um, and you know the surroundings are going to be able to be able to be able to be able to be able to be able to be able to be able to the settings that they're in. But most importantly for us, they have to have a great work ethic and they have to truly care about the needs of the clients.

[ 00:28:17 ] Um, if you don't have, you know, a go-getter mentality or if you're in it just strictly for money and a paycheck, you're not going to be a good fit for a field manager, and there's a lot of accountabilities. Something that's coming to mind is they are accountable for those clients and those employees, and they're Compensated accordingly, which you know, like we've talked a lot about performance-based compensation in the last six months, and I think there's a lot of room for more of that in home care. Identifying, you know, people like field managers that you know are accountable and then are compensated based off of the people that they directly manage, and I'm sure you've seen a lot of value in that, you know, they feel accountable to their people and then they know that their paycheck is based off of you know shifts completed so they're going to get the job done, and I think that, in and of that concept, is just like not novel.

[ 00:29:13 ] Industry, but we just need more, um, more roles and, um, more compensation tied to people's roles and outcomes and KPIs that they directly own and oversee, yeah. And so, you may think like, oh, there's an incentive for them, you know? We have, we have so many metrics in place to like prevent fraud and that type of thing from happening, um, with them, you know? You may think they're trying to like get hours, you know, because if they're if they're at 1,397, you know, they need three more hours and they make an extra $50 that week. But we have a lot of metrics and safety mechanisms in place to prevent that from happening, but it is motivating if You're at 1,397 hours and there's a six-hour shift on a Friday night that someone calls off.

[ 00:29:57 ] You know if you staff that shift, you're going to make an extra $50, right? We want people to worry about the care and the clients and the caregivers and the people first, but and that should be our top priority, that's our top priority as a business. But everybody also is in an income and they're providing for their family, so you staff that shift now, you made an extra $50 that week, um, because you got to the next tier. I mean, there is it definitely is a motivating incentive that performance-based pay is, um, it's something. That's been great, and we like it because it's literally in their paycheck; they're not waiting, so it's kind of in your face. Which means that making sure that we get these hours covered is a priority for our entire company because it affects people's pay.

[ 00:30:37 ] I wanted to ask who did the field managers’ report to? Like the org chart you said there are 14 of them who do they report up to, yeah? So, we have a director of operations um for sunny days, and they all report to the director of operations, and we have we have an on-call manager; she oversees all of our on-call supervisors. Um, so we have six teams of on-call supervisors. someone does the weekend, um, and excuse me five teams. She oversees all of them. She reports to the director of operations too. So, and she's the one who does the work for the day, and she's the one who does the work for the day, and she's the one who does the work for the day, and she's the one who does the work for the day, so. Dealing with a lot of compliance, I have compliance members on my team, I have finance members on my team.

[ 00:31:24 ] We don't want the field managers worried about a bunch of that back-end kind of stuff. We want them focused on the clients and caregivers, and making sure that care is getting delivered. and that's been very important to us and it's really allowed us to be successful with you know with meeting the client's needs I was going to ask kind of my last topic here on any drawbacks that you've identified from this approach I know you know kind of live and breathe this model and it's driven a lot of success but any just challenges or drawbacks that you see to this model yeah so a couple and we're kind of working through those right now um and one of those is you know capping people kind of that 2000 hour mark um so there's kind of a ceiling on what your earning potential is from that um so what do we do with the people that are at 2000 hours and managing it well

[ 00:32:12 ] you know do we do we allow them to manage 2300 hours um you know what do we do with that you know so we're playing around with some different things we're playing around with what we call a care team model where we're kind of combining two people who one's really good caregivers one's really good clients which is more of a traditional I guess home care model if you will or we're playing around with that a little bit uh so the kind of the cap and then the other issue is when you have everybody kind of as their own satellite office and we have a shift in this town that we don't have any caregivers available, but the field manager over here, 20 minutes away, does, or half an hour away, does.

[ 00:32:48 ] Uh, getting that person to be willing to share a caregiver with that um, other field manager sometimes can be a little tricky, even though they're the company's caregivers because that person may be afraid, what if they have a call off tomorrow and that caregiver you know goes and does that um, so there's a little bit of that kind of clinginess, um, you know to making sure because it does affect their tier pay right, so I'll loan you a little bit of that kind of caregiver tonight, and then tomorrow. There's a call off, and now I don't get it. Now I can't get to you; know my tier pay so that that's probably the negative, the biggest negative I would say is the cap. And then, uh, you know, kind of the yeah, I don't want to share um, my people.

[ 00:33:25 ] So we're not everybody's like that. We're kind of working through those but those are those are things honestly; we've been having meetings about for the last two or three months trying to figure out what's the best uh solution to that. I appreciate you being candid and I'm putting you on the spot with some of these questions, it's just it's all good, I think; there's a lot of people that listen to this. they may or may not have a position that looks like the field manager they may be running into similar challenges so it's good to hear to people of your size and shape you know how you're thinking about problems how you're dealing with ongoing problems so it's good to hear and I appreciate you being candid I want to yeah zoom out a little bit and talk about milestones that have led to your growth like that have led to you to scale to what Sunday’s days is today

[ 00:34:10 ] I’m sure over you know the last 10 years going 11 years there's been like moments in time when you've pivoted made decisions I don't know let people go like just some of the big milestones that you would say have played the biggest role in your overall success yeah so we kind of do everything our main uh our main metric is hours per week right so I kind of talked about that so um we're about 15 500 hours per week right now that's kind of where we're hitting so as far as main milestones when we hit 10 um we really kind of re-evaluated our territories with our field managers and

[ 00:34:51 ] our whole process forum our on-call supervisors our field managers at the time we had them capped at like 1200 hours um when we got to 10 000 hours as a company and we also had them covering um one weekend a month for on-call and when we got to 10 000 we had a really strong team of field managers and we had a really strong team of field managers and we had a really strong team of field managers and we had a really strong team of field managers and we said you know what we think they can handle more than 1200 per week um we had a lot of people who said I want to make more money um you know with more tier pay um so we raised the ceiling at that point to 2000

[ 00:35:23 ] hours and we took away their responsibilities of on-call one weekend a month and added some on-call players um to the model and so that was that was a really big deal For us, um, the other thing that we did when we got the 13,000 hours is, we started to look at what does it look like, um, some more of the kind of administrative tasks from the field managers. So, we've had other people in the office handling more of the like, uh, satisfaction calls to our clients and caregivers, um, document collection, um, with our you know, with our applicants that are coming on board, um, some more of those things that the field managers it plays into their role in their position but was taking away their time that they could really focus on the clients and caregivers, that's really what we want them to focus on.

[ 00:36:13 ] and um so that was a big deal I’d say at the 10 and end of the 13 mark when we started to do that and really look at how do we how do we maximize our caregivers uh full potential um in a way that it's able to make sure that our clients’ needs are met so those are really the two big uh the two big things that I would say that that we hit it allowed us to make those changes and we were at a part a place financially where you know it made sense to do that and we could do that then as well I don't know if now is the right time but I wanted to jump in and let everyone know that you mentioned at the beginning you are a Medicaid heavy like primarily Medicaid Business and I want people to understand what that means and what that looks like in the state of Pennsylvania because that has a huge influence on your business and your structure, and like your finances.

[ 00:36:59 ] So share a little bit about like the Medicaid landscape so people get a taste of that, and then talk about how you know just like the underlying Medicaid financials like impact everything that you do. Yeah, so we're at this point, we're 95 percent Medicaid and we are very Medicaid heavy. Um, I don't know if anybody saw the ruling today on CMS's 80/20 rule with Medicaid, so we're definitely paying close attention to that. We are about 73 to 75 percent of our costs, our caregiver costs, and they want us to go to 80. So, that's uh, that could be very interesting. Um, so if anybody else is dealing with Medicaid, I know that's and it's a hot button issue, so we're paying close attention to that uh, the Medicaid space.

[ 00:37:43 ] So, we switched to a managed care model in 2018. So, prior to that, it was state-run now, we have managed care, we have three managed care organizations (MCOs) that we work with uh, on a regular basis and there's a lot of challenges during that transition time, there's a lot of unknowns, particularly with anybody here that does any kind of government Billing, whether it's Medicaid or VA, or even if maybe some LTC (long-term care) insurance stuff when you bill and something goes wrong, you're not going to be able to pay for it. You're not going to be able to pay for it. You're not going to be able to pay for it. You're not going to be able to pay for it. You've got to figure out why it got rejected and fix that, make the change or maybe you missed something, and that person wasn't eligible or authorized for that care and then you've got to make an operational change so that doesn't happen again and then you know restart that and try to reprocess that so you can collect your payments.

[ 00:38:31 ] had a lot of issues with that because we didn't know how to fix that when the MCOS first came into place, so that's that we had about nine months before we um you know we knew what was going on and then during COVID I'd spent a whole day with a very generous soul um on the phone who I asked probably 90 questions and recorded a Zoom meeting over four hours about how to fix this, and then I typed up a manual from it um and that's really helped us our team, my team's tweaked the manual probably a dozen times since then but that was really helpful for us so finding a good person is crucial, but we so we do have the three MCOS and Our referral sources from 20 the end of 2017 to the end of 2018 and 12 months ago, we had a lot of issues with that, so we had to figure out how to

[ 00:39:17 ] make sure that we were connecting with these new referral sources because if you don't have referral sources, you're not going to bring on business, um, and that changed. We still we grew by about 3,000 hours of care from 2018, we went from 7,000 hours to 10,000, and even though our referral source turnover was insane, and that was really because our field manager model and our field manager was really important to us, and we're still building those relationships with the MCOS so, so Pennsylvania. Pennsylvania home care um there's some really good things really bad things about it um just from you know being involved with some other states uh but the one thing that's tricky about it is our reimbursement rate

[ 00:39:57 ] in Pennsylvania if you're on the call from Pennsylvania you feel the pain with me uh in one region where half our business is it's 19 32 an hour and the other region where the other half of our business is it's 21 48 an hour so you got 19 and change and 21 and change so average is average and average is average and average is about 20 and 50 cents an hour and our average caregiver pay rate between the two regions we have like 11 50 and 13 50 so we're averaging about 12 50 um for our caregiver pay it's actually probably closer to 12 and 13 and 12 50 is our average um caregiver pay rate so our margin is eight bucks an hour or less in a lot of situations um after we've paid this is just caregiver pay this isn't their taxes or anything so and I say that transparently because

[ 00:40:42 ] it's really tricky to recruit caregivers um whenever we have you know Dunkin Donuts or Starbucks or Walmart or whoever offering people's starting pay rate at 14 15 16 bucks an hour and we can't touch that um so we're hopeful that eventually the state Of Pennsylvania will increase their Medicaid reimbursement rate, uh, but that's kind of, kind of what we're dealing with right now; that um, we're dealing with margin compression and you know they're familiar with the term. Like if our margin last year was eight dollars and now, we're dealing with margin compression and you know everybody in our care, let's say all of your caregivers stay and they all get a 25-cent raise and you can't bill anymore; now your eight-dollar margin goes down to $7.75. Right?

[ 00:41:21 ] So, you have to figure out: well, now I'm making 25 cents less an hour, what do I do there? Um, so we're really trying to figure Out the challenges and it's actually to and I talk about efficiency, um, in our model we've been forced to be as efficient and lean as possible to make sure that we can pay our caregivers as much as possible, uh, so that we can still be profitable. You know we're not trying to make a killing in Medicaid; our actual take-home profit per hour is really low, um, for Medicaid, but we're trying to play the volume game and take care of as many people as we can from a financial standpoint, more importantly from a care standpoint.

[ 00:41:57 ] Um, you know we believe that we do a better job than anybody else in Medicaid and there's companies out there just as Good as us, but we don't think there's anybody that's better than us at providing care for Medicaid and so if we think we're the best or one of the best and we believe that people need quality care, then we should be the ones that do it and I kind of challenge I guess you and talk to your team about that. And me is you know we said to our team that we truly believe we're the best at this and people like yeah, we are well then we should want to do it for as many people as possible um and just because we're not making as much, you know, we do a private pay case, we make four times what we make at least on a Medicaid case.

[ 00:42:34 ] We don't make A lot with Medicaid, um, but we're in it because we want to help people. I mean, that's our goal, so it's challenging though and I know some states have low reimbursement rates like us, some states have you know $15 an hour higher reimbursement rates, but the cost of living is higher so it's Medicaid in Pennsylvania is it's really tricky there's a lot of good they're trying to do but there's a lot of trickiness and we have a lot of people right now I guess. I know it's a long answer, but I heard something all day there's 180,000 people in the state of Pennsylvania that don't have Medicaid services that lapsed.

[ 00:43:05 ] And they didn't renew it in the last four months because during COVID it was auto-renewing and now it's not, so we have to deal with a lot of people that are supposed to be getting care right now that aren't because they didn't renew their Medicaid, and now you have people that are crying because desperately need us in their home that aren't. Um, it's really frustrating to me that you know that that's what's going on, so that's a challenge nobody else is experiencing that challenge but it's really tough. So, Medicaid, there's some challenges with Medicaid; there's really a lot of good you can do from a community standpoint. But there's a lot of difficulties as well, hats off to you and your company; you've skilled yeah, a massive business on Medicaid with those reimbursement rates.

[ 00:43:45 ] I've been on a lot of calls and meetings where you know people throw themselves pity parties in your case, like these reimbursement rates are so low, and not that they're giving up but they know just how challenging it is, and I think to hear you just so candidly share this is the lay of the land, this is what you're up against; but look what you're doing with it: you came full circle on how efficient and how lean and how intentional you have to be about every single decision. that you make so it's a blessing in disguise I’m sure you know you're tired some days of just dealing with the complexities of Medicaid and it

[ 00:44:18 ] never ends but like you've identified multiple times you keep your eye on the ball which is these clients you know these people that need care you'll do anything and everything to make sure that they get the care they need and you can kind of put you know all of the paperwork the phone calls the complexities you know that just come with these MCOs on the side because you know what's most important and you know you're not going to be able to get what's most important so hats off Honestly, to just what you've done and what you've accomplished, I think it's remarkable. And I hope other Medicaid providers uh listen to this because there's so much to learn, and there's a lot of room for improvement uh for all providers dealing with these complexities, and we as an industry have to push back and push up together as much as we can.

[ 00:45:04 ] So, I... We were talking about challenges, and I'm sure you would agree that everything that Medicaid has brought to your business has been probably challenge after challenge, but you've dealt with it with grace, it sounds like. Um, any other thoughts to add on this topic? Yeah, I would just say that I think figuring out how you can be as lean as possible on the back end so you can be heavier on the front end on the client caregiver facing end, even in a private pay you know, the private pay model or the more traditional, you know, home care model, um, is really helpful. You know what I mean? You can make more efficient or

[ 00:45:43 ] that you could repurpose the money, or that position, even and have it focus on the clients and the caregivers because that's truly what matters, I mean, we're in this to make sure that that our clients get the care that they need and our caregivers have a quality job to work at, um, so and We and I may sound like I'm saying, 'You know I'm saying you know something very cliche or pie in the sky or whatever,' but like, it's that truly what we do here. I mean, we really try to make self-efficient, yeah. We maybe we are forced because we don't have that much of a margin to play with in Medicaid, but you know, we really do focus on making sure that the people are our number one priority and that's how we make decisions.

[ 00:46:17 ] And we're looking to add something new, what's this going to do for, for the care? You know, is the question we ask. So absolutely, well I want to put in like a quick teaser here before I ask you just a couple more questions. A couple more questions before we wrap up, you referenced some acquisitions in today's call. We haven't touched on it deeply, but for everyone that's listening, we're going to dive deep on uh next week, John's been through it a few times, he's learned a few things, you know got some bumps and bruises along the way, but we're going to dive deep on acquisitions with him next week and he's going to talk about his experience. So, know that uh we're looking forward to that next week.

[ 00:46:55 ] Um, we hope you'll join us again. A couple of questions to wrap here: what do you wish you'd known when you started? Looking back, you know 10-11 years... what do you wish you would have known, so I talk a lot about data KPIs, metrics, and everything. And, um, I'm a former stats guy, right? Um, I think if I had realized from the get-go that culture was just as important as data, um, they're equally as important for your company to be successful; that would have saved me a lot of headaches and heartaches, too. I think I my father-in-law was very hardcore culture-wise and didn't really pay much attention to data other than our hours per week, I think.

[ 00:47:37 ] I swung the pendulum too far in the data direction initially and didn't put enough of a focus on culture, um, and then eventually realized, you know, through my stubbornness. And getting feedback from a lot of people that we weren't paying enough attention to the culture, so we really kind of swung back and now I think we're really in a happy medium in the middle where um, culture is hugely important to us, but we're also tracking a lot of data that plays into you know all of our key decisions, so that's a big thing for me. Uh, and then the second thing is how to how to know when to delegate you know tasks and responsibilities in order to grow,

[ 00:48:16 ] and being okay if somebody in your company if you if you think you're amazing and you can do a task 10 out of 10 and somebody in your company can do that task a 9 out Of 10, it's okay to delegate it to them, um, and maybe you think you were a 10 out of 10 and you're really an 8, and when you delegate it that person's actually a 9 or 10, and they're better than you, uh, so being I guess aware certain things um is really important. And then I guess I would say also when you're when you're looking to expand and dealing with a lot of difficult and tricky situations, really looking at the decision you're making and saying like, 'Is this the best decision for today or is this the best decision long term?' Because there's some decisions that I've made over the years that really fixed the problem that Was in my face and in front of me, but weren't long-term solutions

[ 00:49:11 ] and replicable things that you know that we could scale, uh, so that that's something that I would say is, you know, just because it makes you feel better today, and it's a short-term solution sometimes you have to do those, but um, is this what's best long term for the company, um, is a question, you know, will I be happy with the decision in a year from now, three years from now? And some of the decisions I made I was really happy with at the time, but a year later I wasn't happy with and if I asked myself that question, I would have known that I wasn't going to be happy with those. So, that was great, that was off the cuff and that's probably one of the better responses I've ever heard to that question, so that was awesome.

[ 00:49:48 ] I'm just like imagining you know, sharing just that, that bite for a second. Um, this question may sound similar to that but maybe think kind of think of it from a different lens which is what's the hardest lesson you've learned? What have you been through in the last 10 years and what lesson came out of that? You know, really tough day or week or month of some sort of struggle or challenge that you overcame. So, so three weeks into COVID we had a client that um she got COVID, and we didn't have any kind of PPE we didn't have anything and so we, our caregivers, weren't comfortable going into the home. Um, the lady had round-the-clock care; she was a 24-7 client, and we um, we didn't know what to do, and the recommendation at the time was, you know, to send people to a nursing home.

[ 00:50:36 ] Um, and you know, we know there's been some issues with that, you know, since then but at the time we didn't have that was the recommendation, and we had to deal with this, this lady crying on the phone because we told her we couldn't send anybody. We contacted a nursing home, and you know, she was going to go there. We worked with her support's coordinator, and they were Going to get her in there and everything, and I remember her saying that when you go to a nursing home, that's the last stop before you go to the funeral home. And uh, that really, that really kind of shook my whole team, and it was sad. I mean we were really sad in that situation.

[ 00:51:11 ] Ultimately, we had to say to ourselves: 'um, our top priority is making sure clients get the care they need,' and she was getting the care that she needed even though it wasn't coming from us. She was still getting the care that she needed, and that was a very difficult decision to make. Um, I wanted to be able to you know go in there or send people in there and figure out... we have Masks, nobody at the time there wasn't really anything um and I would say just remembering that situation and we had another situation where we took care of a lady seven days a week, we had her for 15 months and we never missed a shift.

[ 00:51:42 ] And we had a really bad snowstorm come and the caregiver was not able to make it there and we couldn't get anybody else to go, and the son of the client was furious with us said he was going to file complaints and lost his mind on my team because we weren't able to staff his mom. She was she was eight hours a day like she was a significant number of hours per day, but we hadn't missed a day in 15 months, and they The catch to this is, the guy lived four blocks and helped take care of her. He ended up going and doing that; we got him convinced to go do that, and um, you know.

[ 00:52:18 ] Once again, even though it was a very unenjoyable experience with him, our top priority is to make sure that our clients get the care that they need in both those situations. It wasn't fun; it was sad; it was infuriating with this guy, but we wanted to make sure that our clients got the care that they need. And I would say that knowing that we did the right thing and made the right decision because I seconded him, and I said, 'I'm not going to do it again; I'm not myself a ton on those decisions.' But knowing that we made the right decision because we put the client's care first, uh, is something that you know it was probably both those decisions. The second decision was a big learning experience, but the first one was probably the most difficult decision I had to make saying that lady...

[ 00:52:56 ] I think someone on my team told her, making a call to send her to the nursing home was that was very difficult. Yeah, great, great stories, I love when you get kind of personal and share those specific examples. Um, you know, I think she made it. She made it home; she was back like four weeks later, she was back in her house, so that story did It had a happy ending, thankfully. Yeah, I love that! I love that I love that last question here in our last couple of minutes, um, I just want to ask like what's next for you and for Sunny Days? What is... what are you looking forward to in 2024? So, our goal is to grow to over 18,000 hours of care per week by the end of the year, and we're looking to expand our geographic footprint.

[ 00:53:36 ] So, in the state of Pennsylvania, we kind of cover from the top of the state up by Lake Erie to the bottom of the state next to like Maryland and West Virginia; we're looking to start to expand east heading out to central Pennsylvania and then also getting into Ohio across. The border with Sunny Days, we have. We have a lot of employees who work for us that live in Ohio, and we just think, you know, we start to expand our geographic footprint a little bit with Sunny Days. That's going to be it's going to give us a lot of opportunities to help people out, especially we're in some very rural areas and there's a lot of rural areas that have approached us and said like 'Hey, we don't have really many providers here.' You know, we have 258 providers as of two years ago, um, in our footprint but that doesn't mean in every pocket of our area we have a lot of providers.

[ 00:54:22 ] So we're trying to figure out how to get into these areas that are that have a very low population, um, and still help people that need, need to care, awesome, grow, grow, grow. There's no there's no stopping you, which is amazing, I, I just am like admiring you know your age how much you're willing to go through next week we're going to talk about you know the challenges, the bumps, the ups and downs that you've gone through with these acquisitions but there's no stopping you, you want to keep going, you want to keep growing and it's all with the intention of helping as many people as possible which I think is admirable and fantastic, so again thanks for all that you're doing and Hats off to you and the company; um, I would just invite everyone.

[ 00:55:02 ] Connect with John on LinkedIn; um, you know, befriend him; reach out to him. I think there's opportunity for him to elaborate on field managers; on, you know, lessons learned; and, you know, I think it's a really great opportunity for him to be able to, with Medicaid. So, I would encourage John if it's okay for people to connect with you, reach out to you know, pick his brain on the things that he that he's learned. Yeah, I'm happy; I'm happy to share if you have questions, but just from what I talked about earlier, I'm probably going to pick your brain if you reach out to me. I'm probably going to pick yours in return a little bit too because I'm sure there's something that you're doing that's way better than you know, we're doing a certain process so I'll, I'm going to try to find that out as well absolutely, that's why we're here, we're all learning and growing together.

[ 00:55:39 ] Well, we'll go ahead and wrap up here, thanks again everyone for joining us live, for listening to this, we'll look forward to having you back next week, John, and we're going to dive into to acquisition mode and how that's gone, and what you've learned um, so we'll look forward to having you again next week with that being said. I hope everyone has a great rest of their day, and a great rest of their week. We'll see you again next week! Great, thank you, awesome, take care. We'll see you.