700% EBITDA Growth: 7 Turnaround Lessons for Home Care Leaders

700% EBITDA Growth: 7 Turnaround Lessons for Home Care Leaders

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Hello and welcome to CareSmartz360 On Air. I’m Dennis Gill, Senior Sales Consultant at Caresmartz. What does it take to turn struggling healthcare organizations into high- growth success stories? Matt Murphy has spent his career answering that question. A four-time private equity-backed CEO, Matt has raised $40 million, completed seven acquisitions, and built a national homebased therapy platform, and delivered more than significant growth through strategic turnarounds. In this episode, he shares powerful

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lessons on leadership, operational discipline, and growth that every homecare leader can apply to build stronger and more resilient organizations. So, welcome to the podcast, Matt. >> Dennis, thanks for having me. Good to be here. We’re really thankful that you were able to take out the time today for our listeners and uh I hope this is a pretty fruitful session for all our listeners wherever they are listening from all over the world. Okay. So without wasting any time Matt I’ll straight away jump in with my first

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question for you. So Matt you achieved exponential expansion in beta growth during a turnaround. What was the very first change that delivered the biggest impact for you? >> Yeah, I appreciate that. So, um I think that the first thing that I did as I look back on it would be to sort out what is the thing that we do really well >> and uh and and to really prioritize around that. I got advice once to do uh to do six things a thousand times rather than try to do a thousand things six times.

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>> Six times. Got it. So I I think look u every company’s got its strengths and weaknesses and I think there’s always an ambition to try to fix everything at once but I think uh the the the better approach in the time that I’ve done a few different turnarounds in my career is to let’s let’s cut back to what we do really well and let’s really focus on that and then build from there. So rather than try to uh try to chase too many uh goals and priorities at once, let’s let’s just do it in a step-wise

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fashion. >> Stepwise fashion. Okay. And many home care agencies mainly focus on growth. So what are the three operational mistakes that prevent profitable growth? You know, I think it’s very similar to what you do in a turnaround, but the phrase that I use is stabilize, standardize, and then optimize. So, I think if you do it in that order, >> you’re going to set yourself up for better success ultimately when you’re trying to scale. Look, we all want to

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grow. We all want to take over the world and we want to, you know, we want to take grab all the market share that we can. >> Definitely. But I think the challenge is if you try to do that too quickly. So if you try to uh if you if you stomp on a gas before you’ve got it stabilized and before you’ve got a team built and before you’ve got your processes laid out, >> you know, I think that there’s a um there’s an expression I’ve used a few different places, but but fill in the

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name of the company. The company I run today is called Caregivers of America. So CGA, >> we call it a one CGA way. >> Well, anybody can adopt that, you know, a one ABC company way. Let’s let’s get down to what is a standardized way that we’re going to do all these processes. >> If you get that done right and you get that done first. So again, stabilize, get the right people, standardize, get the one company way, then you can optimize, then you can really then you

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can stomp on the gas and go. I think the the other thing that I think that that folks that are uh that are that are really aggressive about growing and want to grow and look that’s that’s that’s what we’re all that’s what we all got into this >> for that you can’t negotiate with your standards. So, it it gets tempting like I just had this, you know, you get close to the end of the month and you’re trying to hit a monthly goal >> and you’ve got uh a standard for what a

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quality start means, for instance. >> Um it’s tempting to say, “What if we relax our standard because we’re trying to hit that goal?” >> Well, you’re you’re you’re kind of writing a check that, you know, that the next month is gonna have to pay. And so it’s probably better to do uh you know if you came up with a good standard, let’s stick with that then you know and and and over time I think that will prove. So I think it’s I

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I think it’s those two things that I’ve seen uh where you can get tripped up on when you’re trying to grow a little too quickly. It is trying to go before you’ve standardized and stabilized. And and if you if you negotiate with your own standards when when you know better uh when you know better you got to you got to do better. >> Yep. So that was you said standardize stabilize and then optimize. >> That’s right. Yeah. >> Correct. Correct. And next thing you

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completed seven acquisitions while building a national platform. That’s great. So what lessons can homecare leaders apply when scaling through acquisition or expansion? >> Yeah. Again, I think there’s probably >> probably probably three uh three bits of wisdom that I can pass on this. And those uh those seven acquisitions were were with one company, but I think most of the companies I’ve been with, we’ve had multiple acquisitions and and so I’ve I’ve I’ve learned I’ve got scar

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tissue to uh that has informed these lessons. I think the first one is to to think about the decision about what needs to be uh what can be centralized and what should be localized. >> You know the old adage that healthcare is local. You know I think you’ve got to think about you got to be thoughtful about what resources you want to have in market and then what resources can be better done from you know one centralized location or back office. So I think >> that’s that’s step one is to get that

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right. >> I think the other thing in an acquisition particularly in home care is to look at these people ‘s businesses. These are businesses that generally are um you know the the the one of the strengths they have is the relationships they have in the community. >> Yep. And you can’t uh with a stroke of a pen replace those relationships. >> That’s correct. Correct. >> Dennis, as a guy who’s running a sales team, you know how >> Yeah, that is >> it’s you’ve got to be um you’ve got to

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have a patient, thorough, thoughtful process for this owner that we’re buying the business from who knows everybody in town because they’ve been here for decades. um that’s gonna that that’s not going to be an overnight process for us to build the same trust from those referral sources. So, you’ve got to have a really patient strategy for that. I think that the last thing is details with being thoughtful about the the relationship with that founder is um is

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to not be too quick to want to rebrand. >> Okay? >> So, I’ll give you a quick story. You know, in the last company that I ran, we made an acquisition and it was in a different town. We were excited about the business. We went through all those steps maybe a little too quickly where we um had a new role for the founder and we wanted to put our fancy new brand on top of the old brand. >> Yeah. >> And um and and we we you know, we ran through our checklist and you know, we

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did a very efficient job. But then I was down in that market and I remember talking to um one of the people that had stopped referring to us and he’s like, “Yeah, but I don’t know where this person is and I don’t know what this company is.” So, you know, it’s really in the eye of the beholder, but it really pays to be patient with those two things, you know, about how we >> um you know, how you think thoughtfully about those relationships.

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And look, um, such an important aspect to everything you’re going to do in home care, home health is, um, is how you build up the trust with the people that are going to send those referrals to you and the families that are going to choose you. So, you can’t you can’t go too fast on those things. >> Okay. Yeah. Because the thing is definitely the as I’m just understanding a little bit on that that the people over there, they must have had a personal relationship with that person

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from where you acquired that. So that they might have faced some hurdles or they might have taken some time to get used to the new people. So that can be the reason. >> Yep. Slow slow and steady I think is the approach. >> Slow and steady. >> Gotcha. Gotcha. >> Yeah. Nothing is more beneficial than a handoff um from that person that they’ve trusted for decades. I mean get that person’s endorsement, but just show up without it and introduce yourself as a new person with a new company name. um

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you know you’re you you you’ve given up uh any of the benefit of the decades of of depth in the market there. >> Definitely correct. Correct. And uh Matt, during periods of regulatory change, what separates agencies that thrive from those that struggle? >> That’s a good question. You know, I think look, we’re in an industry that is highly regulated and uh and and rightfully so. You know, I think that when you think about vulnerable populations and you think about, you

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I know, the folks that we take care of, um, it’s good that there’s all the regulatory protection around them and that it’s going to be a constantly evolving place. I think it is what separates companies that can do it with the right amount of resources and can do things at scale from the folks that maybe are cutting corners. So, I think the the the two things you want to think about in regulatory change is you don’t want to be on either of the I’ll call it the the

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the polar opposites of this. You um you can’t overreact to the change because you still have a mission and you still have >> people and people’s lives that are counting on you. So, you can’t call a timeout. You can’t stop the wheels from turning. You have to make the changes while you continue to deliver great service. I mean, that’s got to be job number one. So, >> um I think there’s one you can overreact to the change. You can also underreact to the change.

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>> Yep. >> You can um you know, kind of put your head in the sand and and and think that nothing nothing really needs to change today. >> Yeah. >> Also, the wrong Also the wrong reaction. >> Yeah, no problem. No problem. >> So yeah, I think the attitude toward regulatory changes is expected. Uh again, it’s it’s it’s the right thing from those regulatory bodies to want to make sure that we’re all out there um doing the right thing. It’s if you’re a

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company that that has uh uh the the right and appropriate and and a healthy um attitude towards compliance, then you know we we should th those of us that that behave that way, we should invite more scrutiny because we want to make sure that our industry is clean and that if there are any bad actors that they can’t keep up with the regulatory changes that that you know that that process works. But I think when it happens is have lay out an incremental process and just try to get better every

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day with with um with that compliance while while not overreacting or underreacting. >> Overreacting and not underreacting. Okay. So now the thing that everybody’s talking about nowadays is AI. AI is becoming a major focus in homecare. Where do you see AI creating the greatest operational and financial impact over the next few years? >> Yeah, it’s a um it’s a fascinating time to be in business, isn’t it? I mean, it’s a you know, may you live in interesting times. AI

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has made this a very interesting time. >> Yeah. I think one of the things that that is, you know, we’ve talked about it a few times already, but but that is so um I think what makes people, myself included, and I’m sure yourself, Dennis, but what makes us love home care is the the human element, you know, the the people aspect is watching the relationship that gets formed between the family and that caregiver >> and the caregiver. Yeah. You know, I I always think about how, you know, um,

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uh, ultimately at the funeral, you know, the family’s in the front row and the caregiver is with them. I mean, that’s there’s just beautiful stories that happen in this that are that are very human. >> Um, again, no, nothing I can’t imagine a a business being more personal than than homecare. >> Yeah. But with that, you know, you tend to have folks that have these great relationships, but they’re also carrying a lot of the domain knowledge in their heads. And and so I

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think you know we want to we want to be able to keep the focus on on building those relationships but then all those things that about yeah I know that I’ve got a caregiver in this zip code that will you know that that you know all all the nuances about those details th those can that’s where we can leverage AI right >> so when it comes to things like staffing when it comes to things like billing when it comes to things that are um either processes that can be automated or where you’ve uh um sets of data that

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are otherwise uncorrelated where you’re trying to make that correlation. So I think all those things can help companies grow faster by leveraging AI in a smart way. I think that’s so that there’s there’s a lot on the kind of again staffing, billing, some of the back office things that that allow you to keep your resources um on on those relationship building aspects which is really what what allows you to to to scale the these businesses. you know, obviously in the um for for

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folks with jobs like mine and running the organization, it’s the you know, what we have in terms of data to really understand the trends within our business, >> really understand how it is that I can make those resource allocation decisions. So the the FPN function that’s where where AI will will will will has and will continue to to make a big impact. >> I think the other thing that that I think about now in in what I think is still the early innings of of how AI is

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going to impact every business is what I talk to my team a lot about is that we have a real long-term plan. I think there’s a lot of things that are kind of popping up as um as quick solutions on AI. But I I think what we’re trying to to be diligent about is uh what is that what is the vision for our use of AI that is consistent with our with the tech stack that we’re building >> so that we don’t find ourselves six months from now with with a hodgepodge of things that we’ve just

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kind of grabbed off the market as they’re emerging. You know, let’s be patient and let the process um, you know, build out so that we can really construct the right tech stack for where we think the business is going to be as an AI assisted company. >> Yeah, mainly it does help in the operational side of it because as I’ve seen uh this side grows the AI and the operational side as I mainly I am working on that part. So there are many aspects that are loved by the home care agencies basically as you were saying in

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staffing billing. It does help. It does reduce the man hours but yes the human touch the human touch it always remains that can never be changed in this industry. >> Yeah you got you got to have both. >> Yeah obviously it does it does it does. >> Okay so Matt finally the last thing looking ahead to 2026 we already passed the first quarter and ended the second quarter too. What should home care leaders prioritize now to build more profitable, resilient, and enterprise ready organizations?

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>> Yeah, you know, it’s uh it is an interesting time right at the midpoint of the year to be reflecting on that. Think about how much change we’ve seen just in the last six months and what we anticipate going forward. So, I think it’s >> it’s really it’s it’s points that we’ve talked about today, Dennis. I think it’s >> it’s how do you um how do you best leverage the technology that’s available? >> You know, how do you how do you have a a

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long-term vision for what that tech stack is that’s going to really help you um operate the most efficiently, take the best advantage of the data that you have and and to um do things in the most productive way so that you can scale. And at the same time, I think what is is constantly a reminder to me is that um I’ll I’ve never had an occasion where you where you regret the investment in people. >> So, you know, look, these are uh home care, as you know, is is is really can be really um as we talked about how

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rewarding it can be, it can also be really messy. It can be really challenging. There’s a lot of human elements at play. It takes people that are really good at solving problems. It takes people that are leaders. Um, so I think that while you’re making the investments in technology is to also keep continue to make the investments in and and in how you select great people, how you develop those people um and and and how you keep uh you know keep that healthy supply and and premium on leadership in your company so that you

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can leverage the technology in the right way. I think those are the two things, right? It’s people in technology and how you allocate your resources between those two, but I look in some ways we’re blessed that home care is a relatively simple business in that regard. So, uh I think keeping it focused on those two things will continue to be uh beneficial and and and be rewarding in the rest of this year and in the next.

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Thank you. Thank you Matt uh for all the knowledge that you have provided to all the listeners today. It was a wonderful session. Thank you. Thank you from the bottom of our heart and I hope you also had a good time with this conversation and uh you distributing your knowledge to all our listeners. >> Absolutely Dennis pleasure to talk to you. Enjoy the conversation and uh uh look look forward to uh to whatever’s next for us. >> Yeah, surely thank you. Thank you again, Matt, and thank you to all my listeners

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today. So, I am Dennis Gill signing off for today and I’ll shortly be back with you. Thank you.