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

Episode Date: February 4, 2024

Within a few years, John Bennett went from high school football coach to CEO of one of the country's fastest-growing home care companies. What can other owners learn from his journey? Let's find out. Enjoying the show? Send me a text and let me know!Learn more about Careswitch at: careswitch.comConnect with the host on LinkedIn: Miriam Allred This episode was produced by parkerkane.co

Hey, welcome to Home Care U, a podcast made by the team at Care Switch. Nobody went to school to learn how to run a home care agency, so we're bringing the education to you. Join our live audience by going to careswitch.com slash homecareu or listen on your own time wherever you get your podcasts. Home Care U is hosted by myself, Miriam Allred, and Connor Koons of Care Switch. Enjoy the session. Welcome, everyone, to Home Care U is hosted by myself, Miriam Allred, and Connor Koons of CareSwitch. Enjoy the session. 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 afterward, it's great to have you. Quick shameless plug, if you're listening on a music or podcast site, drop us a review. We love to hear 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 go to careswitch.com slash subscribe and join our email list to get the weekly podcast recording straight to your inbox, along with some other great resources. People are always asking us how to get these each and every week. So careswitch.com slash subscribe. I say it every week. I'm really excited to be here and stoked for today's guest. I've been trying to get him on for months. He's a busy guy. We were

just sharing updates on LinkedIn. A lot of people know John, have heard about him. He's a little bit quieter, maybe a little more under wraps in the industry, but nonetheless, as sharp as they come. Today's guest is John Bennett, the CEO of Sunny Days and 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. 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 what Sunny Days and 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. I got married young. And I have three children, nine, six, and four that are just fantastic. I really enjoy helping people out. So I used to be a high school math teacher. I taught geometry and statistics, and a lot of people cringe at that. They probably maybe didn't

have the greatest experiences, particularly with geometry. That's usually people's least favorite subject in high school, but I did teach those and I enjoyed it a lot. And then I also was a head football coach, high school football coach, which I still do that part-time now. And I was an athletic director. And then I started my own asphalt business when I was 17 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 make my own schedule and needed to be flexible. And so I started an asphalt business doing seal coating, line striping, that type of thing. I did that for five years in Pennsylvania. And then I moved to near Ocean City, Maryland for five years. And that's where I was a

teacher down there. And I restarted my business with asphalt in the summer down there and really enjoyed doing that. I learned a lot from the business perspective of what to do and what not to do, how to interact with people, how to deal with unsatisfied individuals, 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 basis when you walk into a classroom, just like all of us when we come, our office or in a home, we don't know where we're going to get into. So being able to, you know, put yourself in someone's other, you know, someone else's shoes and just really kind of meet them where they are and see what's going on and deal with the challenges that they're dealing with and then get them to accomplish whatever goals or tasks you need 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, you know, where I used to be and really enjoyed that.

I really enjoyed working with people and particularly with teaching 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. You know, in what world did we all think we'd be in home care, but yet here we are. So talk to me about how you came to be running this company, where it all started. So yeah, that's a great question. That's an interesting, I saw the title of the podcast, and that's an interesting hook. It usually piques people's interest.

So my in-laws started Sunny Days in Home Care in 2011. And my father-in-law did marketing for a national home health agency. And they were really just 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. And he was very frustrated with that and ended up deciding he wanted to go start 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. He was working overnight shifts, not really sleeping at all in his mid-50s. And he was going out and doing marketing and

recruiting and interviewing during the day. And he, you know, he really grew a business from ground zero. So he's, you know, really, really, and I see someone here comment there from Pittsburgh originally. So Patricia, that's awesome. So go Steelers. And so he really did that. And then my mother-in-law, 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 as they grew and continue to expand. Once they got to 500, 750 hours, then he started to talk about having her come on board. And so they started it and really, really did an amazing job and got involved. Initially, it was a 100% private pay business.

And then he had an opportunity to get into Medicaid. The Medicaid reimbursement rate at the time had actually been lowered by a little bit, which is crazy with the rising cost of everything. But he viewed it as a good opportunity to grow the business. And even more importantly, and this is something that's still really important to our values, is my father-in-law and mother-in-law, David and Evelyn, from the get-go, and I've carried on this mantra is, we believe everybody deserves care regardless of what their income level is. And that's something that we've been really passionate about.

We take care of some people in really some dilapidated conditions, but they want to remain at home. And obviously, if it gets to a safety issue, 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 and got to in 2015, I came on board. And at the time, we were around 5000 hours. And I actually came on board to franchise. I left teaching and I said, you know what, I've done asphalt. I have some business background. We'll give us a shot. My wife and I just had a daughter. We wanted to move back to Pennsylvania. And we said, all right, well, I'll give this a shot. So I got into franchising. We had a location in Chicago, had another one in Wisconsin. We were looking at opening up kind of like the Great Lakes region is kind of where we were looking here. It's going around Western PA heading that direction. And it just wasn't working. We had some nice people. They weren't necessarily following all of our processes and systems. 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. At the time, there were 74 other home care agencies that were franchising. And it was very hard to sell somebody to, well, I go with you. You've only got one other location when this company has 86 or they have 920 or whatever some of the big franchise players have. So that was difficult. So we decided to potentially get into the acquisition game. And I had gradually started to take over more of the business from when I started. So when I started at Sunny Days, 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 whiteout out.

Everything was whited out and we wrote on the new information. And that kind of drove me nuts. 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. 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 most 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 and then started 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. And I'm a big proponent of efficiencies and figuring out 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 only 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 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. So our hours had been going down. It's just because we had been growing just

by busting our tails and just gritting our teeth and working as hard as possible. And we didn't necessarily have the processes and systems in place to scale. So I started to bring those in and with a great team in place to carry them out. And we started to grow again and kind of continued over that for the next few years and got to the point where March 1st of 2020, I had taken over most of daily operations at that point. Still some stuff with financials. My father-in-law was doing, my mother-in-law was retired at this point. 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 listen to this, March 1st of 2020, everybody was in a pretty good mood. And then two weeks later, COVID happened. And I really got baptized by fire through how to make some difficult decisions during COVID. But there's that saying that 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 this situation before? Because we were all dealing with just crazy stuff that no one had experienced before. Really, 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, 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 and what resources did you learn from? You were coming out of no home care experience to all of a sudden getting asked to be brought in to 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 picked my father-in-law's brain a lot. And I like being 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 I'd start asking questions. Well, what do you think about doing it this way? And I really learned a lot, kind of 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 i picked his brain a lot um and so that that was

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 of 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. And then I also Googled, 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 people had posted online, whether they had meant to post them online and showed them to everybody or not. And I would sit there and I would read these handbooks. Sometimes it was a caregiver handbook. Sometimes it was a client handbook. Some of it was company-wide handbooks.

And I just start reading these handbooks. And you learn a lot of information 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, um, 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 always done. Um, is it the best, you know, when 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 the best? You know, when 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? 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. A lot in our company and a lot of reading. I didn't necessarily talk to too many outside home care agencies when we first started. Since then, I'm involved with a mastermind group, which has been amazing.

We can talk about that too at some point. But really, a lot of all, I was asking a lot of questions and reading a lot. There's some good books too. Shelly Sun, who is one of the major players in the home care space with her franchise. She's done some great stuff and she has a book that I read. So that was really helpful too. So just that, a lot of reading, a lot of information gathering.

Awesome. Maybe that's why I gravitate towards you so much is 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 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. 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. So thanks for sharing that. It's just interesting to hear what you're learning. Methodology and sources were early on. You mentioned briefly that when you came on

2015, the business was doing about 5,000 hours weekly, just so everyone's clear. How many people were in the office? Give us just a little bit more understanding of the scope of when you got brought on. Who else was there, how many employees, et cetera. Yeah. So at the time when we started with 5,000 Hours, my father-in-law was the president. And then we had an office manager who also oversaw compliance. We had an operations manager, and then we had a head of finance. So there was four of us in the office. And then we also had four field managers, 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. So that's kind of what we did at 5,000 hours. And we had somebody handling on-call at the time. We had one on-call manager that we're big proponents of a live person who lives in the area answering phones after hours and weekends to make sure that we're covering as many shifts as possible. So that was our management team, if you will. Awesome. Yeah.

Just good context for understanding. Let's talk more about 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 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. And in our model, our field managers, I'm going to reference them a lot. So it needs to

kind of explain what they do. So our field managers are responsible for marketing and bringing on business. They're responsible for doing client intakes, client assessments. 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, but we have a lower census or lower caseload for those field managers. Because we really believe that if they're the person who's done the client intake and they're the person who's interviewed the caregiver, 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 or clients? So one field manager typically has around 40 clients, 30 to 50 is kind of our range,

30 to 50 caregivers and managing anywhere from a thousand to kind of 1700 hours of care per week is what their range is. So we have some exceptions that are up to 2000 hours, someone who's down to 600 in a territory we're trying to build. But that's kind of our average range. It's an average, I'd say 14 to 1500 hours per field manager, and probably 40 caregivers and clients, you know, give or take a few. So that's, that's kind of their sentence. 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. It's important to us. I got you all. So yeah, keep going. Yeah.

So as far as what 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, standardized intake process. So we started to standardize everything and then retrain 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 do everything kind of out of one office still with Sunny Days. And 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? Because they're working kind of remote. We don't expect our management to be in our field management to be in our office every day. 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 an app with this platform called Snappy, S-N-A-P-P-I-I. There's a bunch out there, but Snappy's been really

great for us. And all it is, is like a form wizard, a data collection app, but it works 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, whatever 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 a lot of different things like that, that I saw that we needed to be more efficient with. I'm a big proponent of automate 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? We talked about this a couple of challenge my team now with this. Is there something in our company? You know, we talked about this a couple 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 I ask people, ask people on your team about that. And don't be afraid to get their feedback either because Because it'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 to ask you people, what do you think we can do better? And not being afraid. 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 some black 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. Former stats teacher, right? And there's that commercial with Matthew McConaughey, data is the new gold, right?

But 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? 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 will tell you the story. You got to dig into it. So 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. So those are kind of the three big things I would say. Yeah. A couple of 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 that challenge from the beginning, what you did 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 still got a long ways 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 a lot of documentation. I don't mean no, you know, paperwork, you know, equates to less documentation. 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 this and that's okay. Know that, you know, there's still room for a lot of improvement for most businesses in this industry. So just neat to hear you download on that. It's not hard, honestly. If you're like, how do I... Sorry to interrupt you. But if you're like, how do I get myself to use less paper? You're welcome to connect with me.

It's really not that hard to do. It can seem intimidating. But setting up... There's a lot of different platforms out there that can be like form wizards for you to collect information. It's really not that hard to get set up. And it's actually, it's a big time saver. I would say for us, it saves a whole position, to be honest, with the way we do it. So it's crucial. So if you're not doing that, whether you have 800 hours or 8,000 or 20,000 hours, 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. The employees don't want to be left out of the loop. The family members want to 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. Everyone has maybe a different version of this role, but I want to 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 scheduling too. So they wear a lot of hats. Who makes a good field manager and who are your field managers? 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, we have a little more turnover there than I would like, but we typically see if somebody can handle on-call, you know, you're getting a call at nine o'clock on a Friday night, somebody called off the client's daughter is 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, kid and this person deal with stressful situations and prioritize, you know, meeting the client's needs. 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 they're at 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 at 2,000 hours because we've found once you get more than 2,000, the quality drops down.

And so we've done that and put that in place. So people real time, it's not like a quarterly bonus. Their paychecks literally fluctuate based off the amount of hours that they're completing. The nice thing about that is we've really emphasized shift coverage. Our shift coverage for the last six years, since we started tracking it, has been 98.5% plus. And that's really important to us for all the hours we're scheduling. We factor out canceled by client because a lot of times that's out of our control. But the rest of the hours, we're 98.5% plus shift coverage.

And we pride. That's one of our top three KPIs is shift coverage because we view it. And it's coming from another owner I've 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., that's a promise that you're making with that individual or their family member, and you don't want to break a promise. So we 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 clients, with your caregivers,

and you have to be really focused on delivering care. You got to be compassionate. It's somebody who's got a great work ethic, 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. Because it's that important to us that we're in there making sure that we take care of people. So they got 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 in the surroundings and 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. 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 accountability. 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. They feel accountable to their people and then they know that their

paycheck is based off of 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 in the industry, but we just need more roles and more compensation tied to people's roles and outcomes and KPIs that they directly own and oversee. Yeah. And you may think like, oh, there's an incentive for them. We have so many metrics in place to prevent fraud and that type of thing from happening with them. You may think, oh, they're trying to get hours because if they're at 1,397, they need three more hours and they make an extra 50 bucks 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, you know if you staff that shift, you're gonna make an extra 50 bucks, right? We want people to worry about the care and the clients

and the care is in the people first, but, and that should be our top priority. That's our top priority as a business, but everybody also is in this because they need a job and an income and they're providing for their family. So you staff that shift. Now you made an extra $50 that week, you know, cause you got to the next tier. I mean, it definitely is a motivating incentive. That performance-based pay is 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, it's a priority for our entire company because it affects people's pay. I wanted to ask who did the field managers report

to? Like thinking up the org chart, you said there's 14 of them. Who do they report up to? Yeah. So we have a director of operations for Sunday days and they all report to the director of operations. And we have an on-call manager. She oversees all of our on-call supervisors. So we have six teams of on-call supervisors. We have someone who does the week and someone who does the weekend. And excuse me, five teams. And she oversees all of them. She reports to the director of operations too.

And that's the other thing with our model focusing on people is we want our field managers to be front-facing, focused on the clients and caregivers. So dealing with a lot of the compliance, I have compliance members on my team. I have finance members on my team. 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 the field managers, any drawbacks that you've identified from this approach?

I know you 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. And one of those is, you know, capping people at kind of that 2000 hour mark. So there's kind of a ceiling on what your earning potential is from that. So what do we do with the people

that are at 2000 hours and managing it well? You know, do we allow them to manage 2300 hours? 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 at caregivers, one's really good with clients, which is more of a traditional, I guess, home care model, if you will. We're playing around with that a little bit. 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 need covered in this field manager doesn't have any caregivers available, but the field manager over here 20 minutes away does or half an hour away does getting that person to be willing to share a caregiver with that other field manager. Sometimes it can be a little tricky, even though they're, they're the company's caregivers, because that person may be afraid that what if they have a call off tomorrow and that caregiver, you know,

goes and does that. So there's a little bit of that kind of clinginess, you know, to making sure because it does affect their tier pay. Right. So I loan you this 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 kind of the, yeah, I don't want to share my people. So not everybody's like that. We're kind of working through those, but 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 solution to that. I appreciate you being candid and I'm putting you on the spot with some of these questions. It's just, I think, you know, there's a lot of people that listen to this and 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 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 days is today. I'm sure over the last 10 years, going on 11 years, there's been 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 metric is hours per week, right? So I kind of talked about that. So we're about 15,500 hours per week right now. That's kind of where we're hitting. And so as far as mid-mile sounds, we hit 10. We really kind of re-evaluated our territories with our field managers and our whole process for our on-call supervisors. Our field managers at the time, we had them capped at like 1,200 hours. And we got to 10,000 hours as a company.

And we also had them covering 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 said, you know what? We think they can handle more than $1,200 per week. We had a lot of people who said, I want to make more money with more tier pay. So we raised the ceiling at that point to 2,000 hours. And we took away their responsibilities of on- like to take off 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 satisfaction calls to our clients and caregivers, document collection with our applicants that are coming on board.

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, right? That's really what we want them to focus on. And so that was a big deal. I'd say at the 10 and then at the 13 mark, when we started to do that and really look at how do we maximize our caregivers' full potential in a way that it's able to make sure that our clients' needs are met. So those are really the two big things that I would say that we hit, that allowed us to make those changes. And we were at a place financially where 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 want to jump in and let everyone know that you, 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 of your business and your structure and like your finances. 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% Medicaid and we are very Medicaid heavy. I don't know if anybody saw the ruling today on the CMS is 80-20 rule with Medicaid. We are very Medicaid heavy. I don't know if anybody saw the ruling today on the 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 are caregiver costs and they want us to go to 80. So that can be very interesting. So if anybody else is dealing with Medicaid, I know that's a hot

button issue. So we're paying close attention to that. The Pennsylvania Medicaid space. So we switched to a managed care model in 2018. 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 gets rejected, you got to figure out why it got rejected and and fix that. Make the change or maybe maybe you missed something and that person wasn't eligible or authorized for that care. And then you got to make an operational change so that doesn't happen again. And, you know, restart that and try to reprocess that so you can collect your payments. We 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, we had about nine months before we, you know, we knew what was

going on. And then during COVID, I'd spent a whole day with a very generous soul 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. And that's, that's really helped us, our team, my team's tweaked the manual probably a dozen times since that, but that was really helpful for us. So finding a good person is crucial. So we do have the three MCOs and our referral sources from the end of 2017 to the end of 2018 in a 12-month span, our referral source turnover was about 85% turnover.

And it was crucial for us. We started doing it in 2017, making 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. And that changed. And 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 managers building those relationships with the MCOs.

So Pennsylvania home care, there's some really good things, really bad things about it, just from being involved with some other states. But the one thing that's tricky about it is our reimbursement rate in Pennsylvania. If you're on the call from Pennsylvania, you feel the pain with me. 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 out to about $20.50 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 for our caregiver pay rate between the two regions. We have like 1150 and 1350. So we're averaging about 1250 for our caregiver pay. It's actually probably closer to 12 and 13 and 1250 is our average caregiver pay rate. So our margin is eight bucks an hour or less in a lot of situations after we've paid. This is just caregiver pay. This isn't their taxes or anything. So, and I say that transparently because 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. But that's kind of what we're dealing with right now that we're dealing with margin compression. And if we're married with the term, like if our margin last year was $8, now everybody in our care, let's say all of your caregivers stay and they all go to 25 cent raise and you can't bill anymore. Now your $8 margin goes down to 775, right? So you have to 775, right? So you have to figure out, all right, well, now I'm making 25 cents less an hour. What do I do there? So we're really trying to figure out the challenges. And it's actually, and I talk about efficiency 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 so that we can still be profitable. We're not trying to make a killing in Medicaid. Our actual take-home profit per hour is really low 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, 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 are like, yeah, we are. Well, then we should want to do it for as many people as possible. And just because we're not making as much, we do a private pay case. We make four times what we make,

at least on a Medicaid case. We don't make a lot with Medicaid, 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 $15 an hour higher reimbursement rates, but the cost of living is higher. So Medicaid in Pennsylvania, 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 the other day. There's 180,000 people in the state of Pennsylvania that don't have Medicaid services that it lapsed 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're dealing 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 and that desperately need us in their home that aren't. It's really frustrating to me 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 have scaled, yeah, a massive business on Medicaid with those reimbursement rates. I've been on a lot of calls and meetings where, you know, people throw themselves pity parties in your case of 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 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, 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. 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 listen to this because there's so much to learn and there's a lot of room for improvement 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. So 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. 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 is really helpful. You know, what are you doing on the back end that you can make more efficient or that you can 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 our clients get the care that they need and our caregivers have a quality job to work at. So, and we, and I may sound like, you know, I'm saying, you know, something very cliche or pie in the sky or whatever, but like, it's, and I may sound like I'm, you know, I'm saying, you know, something very cliche or pie in the sky or whatever, but like, it's, it, that's truly what we do here. I mean, we really try to make stuff efficient. Yeah. We, maybe we are forced because we don't have that much of a margin to play with a 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. And when we're looking to add something new, what's this, what's this going to going to do for the care? You know, is the question we ask. Absolutely. Well, I want to put in like a quick teaser here before I ask you just a couple more questions before we wrap. 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 acquisitions next week. John's been through it a few times. He's learned a few things, 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 we're looking forward to that next week. We hope you'll join us again.

Couple of questions to wrap here. What do you wish you'd known when you started? Looking back 10, 11 years, what do you wish you would have known? So I talk a lot about data, KPIs, metrics, and everything, former stats guy, right? I think if I realized from the get-go that culture was just as important as data, they're equally as important for your company to be successful. That would have saved me a lot of headaches and heartaches as well. My father-in-law was a very hardcore culture and didn't really pay much attention to data other than our hours per week. I think I swung the pendulum too far in the data direction initially and didn't put enough of

a focus on culture. And then eventually realized 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 culture is usually important to us, but we're also tracking a lot of data that plays into all of our key decisions. So that's a big thing for me. And then the second thing is how to know when to delegate tasks and responsibilities in order to grow and being okay. If somebody in your company, 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. 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.

So being, I guess, aware of when you need to delegate certain things is really important. And I guess I would say also 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 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 a problem that was in my face and in front of me, but weren't long-term solutions and replicable things that we could scale. So that's something that I would say is, just because it makes you feel better today and it's a short-term solution, sometimes you have to do those. But is this what's best long-term for the company? There's a question, you know, will I be happy with this 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. I'm just like imagining, you know, sharing just that, that bite for a second. 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 three weeks into COVID, we had a client that she got COVID and we didn't have any kind of PPE. We didn't have anything. And so our caregivers weren't comfortable going into the home. The lady had round the clock care. She was a 24-7 client. And we didn't know what to do. And the recommendation at the time was to send people to a nursing home.

And we know there's been some issues with that since then. But at the time, 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 or her supports 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 that really kind of shook my whole team. And it was sad. I mean, we were really sad in that situation.

But ultimately, we had to say to ourself, our top priority is to make 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. I wanted to be able to go in there, send people in there and figure out. We didn't have masks at the time. There wasn't really anything. 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. 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 stop his mom. She was eight hours a day. She was a significant

amount of hours per day, but we hadn't missed a day in 15 months. And the catch to this is the guy lived four blocks away. He could go to his mother's house and help take care of her. And he ended up going and doing that. We got him convinced to go do that. And 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 get the care that they need. And I would say that knowing that we did the right thing and made the right decision, because I second-guessed myself a ton on those decisions, but knowing that we did the right thing and made the right decision because I second guess myself a ton on those decisions. But knowing that we made the right decision because we put the client's care first is something that, you know, it was probably both those. The second decision was a big learning experience, but the first one was probably the most difficult decision I had to make telling that lady. Someone on my team told her, but making a call to send her to the nursing home was, that was very difficult. Yeah, great, great story. I love when you get kind of personal and like share those specific examples.

You know, I think she made it home. 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. Last question here in our last couple of minutes.

I just want to ask, like, what's next for you and for Sunny Days? 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. 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 Lake 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 a lot of employees who work for us that live in Ohio. And we just think that, you know, we start to expand our geographic footprint a little bit with Sunny Days. That's going to'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, we don't have really many providers here. You know, we, we have, we have 258 providers as of two years ago in our footprint, but that doesn't mean in every pocket of our area, we have a lot of providers. So we're, we're trying to figure out how to get into these of our area, we have a lot of providers. So we're trying to figure out how to get into these areas that have a very low population and still help people that need the care. Awesome. Grow, grow, grow. There's no stopping you, which is amazing. I just am like admiring your age, how much you're willing to go through. Next week, we're going to talk about 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. I would just invite everyone, connect with John on LinkedIn,

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 with Medicaid. So I would encourage John, if it's okay for people to connect with you, reach out to you and, you know, pick his brain on the things 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 and pick mine, I'm probably going to pick yours in return a little bit too, because I'm happy to share if you have questions, but just from what I talked about earlier, I'm probably gonna pick your brain. If you reach out to me and pick mine, I'm probably gonna pick yours in return a little bit too, because I'm sure there's something that you're doing

that's way better than we're doing a certain process. So I'm gonna try to find that out as well. Absolutely, that's why we're here. We're all learning and growing together. Well, we'll go ahead and wrap 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 gonna dive into acquisition mode and how that's gone and what you've learned. 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. And we'll see you again next week. Great. Thank you. That's a wrap. This podcast was made by the team at CareSwitch, the first AI poweredpowered management software for home care agencies. If you want to automate away the menial of your day-to-day with AI so that you and your team can focus on giving great care, check us out at CareSwitch.com.