How Losing 64.5% Revenue Reset My Home Care Growth Plan

How Losing 64.5% Revenue Reset My Home Care Growth Plan

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Dennis Gill: Alright guys. So, welcome to CareSmartz360 On Air, a Home Care Podcast. I’m Dennis Gill, Senior Sales Consultant at Caresmartz.

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Dennis Gill: So, buckle up today as we embark on Mike Doughty’s wild ride. He is the executive director at Zeabe’s home Care Healthcare Agency, and his story is anything but ordinary.

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Dennis Gill: Imagine taking over a company your father, founded just a year ago, tripling its size in 15 months, without any industry background to watch revenues, plunge by 64.5%.

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Dennis Gill: Nothing humbles you like a sales graph sliding backwards.

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Dennis Gill: So most home care owners feel stuck, dazed by change, running in circles, questioning old tactics. Mike was there, too, until he realized that, being an outsider was his greatest advantage.

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Dennis Gill: So with 14 years of digital marketing and franchising experience. He built a playbook based on 3 pillars, strategizing, delivering, and optimizing.

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Dennis Gill: So Mike shares how, losing 64.5% reset his approach, transforming crisis into clarity. Stay tuned today for insights on defining your prime axis, strengthening your core engine and scaling with leverage, not exhaustion.

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Dennis Gill: If you’re a home care owner obsessed with efficiency. This episode is your roadmap to sustainable growth. So welcome to the podcast mike.

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Mike Doughty: Thanks, Dennis. Great to be here.

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Dennis Gill: Great, great, great. So we are really thankful you took out the time from your busy schedule for our listeners today, and I hope this session would be a great beneficial thing for our listeners, and they learn from you the best things what you have done with your agency, and whatever your experience has been

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Dennis Gill: alright. So let’s jump on straight away to our 1st question. So, Mike, what was the 1st insight you gained when you saw a revenue drop of 65.5%. And how did it reshape your priorities? I’m also eager to know about that.

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Mike Doughty: Yeah, thanks, Dennis. Yeah. As you say, there’s nothing so quite so humbling as seeing sort of your sales. Graph sort of just slowly begin to reverse. After such

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Mike Doughty: growth.

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Mike Doughty: So when I, when we saw that happening, and I sort of was reflecting around sort of what we needed to do, I came up with, I guess what was my 3 C’s.

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Mike Doughty: And so and I sort of relate this just initially to my digital marketing experience, where

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Mike Doughty: we would have someone coming to us, and they would want to sort of improve the marketing funnel.

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Mike Doughty: And as we often so here today, there’s 3 parts to marketing. Funnel is the top of the funnel, you know, when a person visits your site, there’s the middle of the funnel, and then there’s the the bottom of the funnel.

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Mike Doughty: And the mistake that most people make in digital marketing is that they want to start improving the top of the funnel. And my experience was we needed to start at the bottom of the funnel.

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Mike Doughty: because that’s the that’s the closest place to a sale.

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Mike Doughty: So when we had that issue, I sort of took that approach and and looked at it, went, okay, I want to make sure that the plug for my bath is not sitting on the bench, and it’s in the bath while I’ve got the taps on. So my 3 C’s were. The bottom of the funnel approach was cash flow, so I need to make sure that whatever we’ve done to be able to submit a claim.

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Mike Doughty: I’m able to collect that money, one make sure I can collect it, and 2 make sure I can collect it quickly.

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Mike Doughty: So you know, we really looked at. You know how we were filing our claims.

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Mike Doughty: what we could do to ensure that those claims are filed cleanly, and that we were getting the cash flow from what we’d already sort of done all

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Mike Doughty: the work for.

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Mike Doughty: And so, you know. I want to say that again still wasn’t perfect. But we looked at outsourcing, you know, to people locally that would do it, based on performance. That sort of didn’t work.

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Mike Doughty: And I really ended up sort of going okay again. Having no experience, let me do the billing.

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Dennis Gill: Okay.

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Mike Doughty: At least understand the process, so that I can ensure that whoever I get in to do it is doing it sort of correctly. So

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Mike Doughty: I’m a great believer. You lean on your talents or your strengths, and I’m definitely one that has the learning gene.

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Dennis Gill: Got it.

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Mike Doughty: I jumped in, learnt the billing.

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Mike Doughty: and then I actually outsourced that to someone overseas very cost effectively, and we also changed our

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Mike Doughty: our operational system. So we were using another software application at the time that was

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Mike Doughty: wasn’t very so it didn’t feel very user friendly, wouldn’t play with other apps in the sandpit. So we changed over our home care, our home care operational system. And yeah, and then started to make sure we were getting the cash flow coming in, you know. We were just doing lots of things manually. We were doing billing slowly, doing billing manually, you know, punching the individual claims that were generated into the

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Mike Doughty: portal manually just was just all inefficient. So we really

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Mike Doughty: operationalized and made that a lot more efficient.

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Mike Doughty: The second one going back up, if you like, from the bottom was then okay, capacity.

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Mike Doughty: We need to get caregivers on. But what have we got, you know, at the moment in terms of capacity with our caregivers.

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Mike Doughty: And you know I also remember things like, you know, when they used to

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Mike Doughty: sort of say how much? You know, oil and gas reserves. The Us. Had to understand how much you know fuel and capacity. And then, you know, then they came along with electronic injection carburetors. And all of a sudden, you know.

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Mike Doughty: the the stock didn’t change, but the technology allowed us to sort of, you know, double the reserve effectively, because we could do it more efficiently. So I looked at that, you know, and and drew on analogies like

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Mike Doughty: when I had a sales team, you know, we would structure

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Mike Doughty: our salespeople to start at a certain time to maximize the number of appointments they could do through the day.

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Mike Doughty: So we took that approach with scheduling and went, okay, what’s the best way to

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Mike Doughty: to make our capacity sort of the maximum that we can have based on. You know, ways that we can influence. So rather than and we mostly Medicaid and Va, we’re not a lot of private pay. Not that it makes much difference, but so we went back and went. Okay. The kick of

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Mike Doughty: needs to be able to work 2 shifts in a day.

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Mike Doughty: So rather than letting the client dictate when the caregiver starts at 10 Am. So they finish, you know, at 2 Pm. Doing a 4 h shift, and we only just have 4 h that we can provide.

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Mike Doughty: Let’s now set a standard where you know. Firstly, the the shift start at 9. Finish at one. You know, the caregiver caregiver can then do a shift from 2 till 6, or maybe 2 to 4,

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Mike Doughty: and so we then just went back to the clients and started to reorganize our scheduling, and that.

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Mike Doughty: and that increased our capacity by one well, by 50%.

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Mike Doughty: So no more caregivers, just by reorganizing.

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Mike Doughty: you know, when we started, we could optimize what we had available and then.

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Mike Doughty: And so we then set about also measuring that on a weekly basis. So what percentage of our clients

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Mike Doughty: are actually on that set, scheduled format all of our hours.

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Mike Doughty: And so we had that in the team meeting each week as one of the items on the dashboard, and lo and behold, you know, we started at most probably I want to say somewhere around sort of 25 to 30%. And you know, we got it up to about 70%.

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Mike Doughty: So that again helped with the capacity.

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Dennis Gill: Okay.

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Mike Doughty: Then stolen capacity. We then went, okay, how many hours are the caregivers sort of working per week?

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Mike Doughty: And it was it was all over the place.

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Mike Doughty: So we went. Okay, again, set a standard. Let’s make it 20 h minimum per week from the caregivers. That’s the standard that we’re going to now communicate with them.

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Mike Doughty: And we went about again sort of measuring what percentage of our caregivers each week

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Mike Doughty: are working 20 h or more and same thing you know. The the metric at the beginning was low, and we started focusing on it, and lo and behold! You know what your measure you can manage and what you can manage gets done. That metric started to increase, and again we started. Now to get sort of more hours from our existing caregivers.

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Dennis Gill: So.

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Mike Doughty: We can go out, and and obviously, you know, get more clients, because often

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Mike Doughty: certainly Medicaid and Va. Getting the clients isn’t so much the constraint. It’s the it’s the caregivers. It’s having the the service, as we know.

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Mike Doughty: So that was the second C around capacity. How do I increase the capacity.

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Mike Doughty: and then sort of thirdly, if you like again, that this one is more at the top of the funnel was.

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Mike Doughty: what’s the conversion process with the resource that we need, which was caregivers. And it’s the recruitment.

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Mike Doughty: So we then started to look at what are we doing? How can we one?

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Mike Doughty: Convert better what we currently have coming in.

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Mike Doughty: And so we set about, you know, just automating. You know, the message reminders

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Mike Doughty: just doing things that differently, making it easy for the applicants, shortening down our

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Mike Doughty: our employment application, making it electronic.

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Mike Doughty: trying to get them to do that before they come in. So they weren’t coming in and spending a lot of time

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Mike Doughty: making our sort of orientation process. You know, online through

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Mike Doughty: video and a digital quiz again, just trying to make

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Mike Doughty: that recruitment process quicker and easier for the

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Mike Doughty: for the caregiver, because they’re the ones that were sort of important

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Mike Doughty: and then working on some lead generation. So those were just really the the things that we focused on in terms of the conversion of the

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Mike Doughty: and process. Knowing our numbers, you know, we focused on how many meet and greets are we doing?

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Mike Doughty: We need to do 10 meet and greets, you know, in person with caregivers per week.

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Mike Doughty: That would be 40 over a month. We get 25% end up making it all the way through. And, you know, doing their 1st shifts. That’s

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Mike Doughty: 10 new caregivers per month, you know. On average, they work 25 h. That’s 250 h per week.

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Mike Doughty: 250 h per week. Yeah.

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Mike Doughty: we’re adding, you know. So it was just

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Mike Doughty: focusing on the yeah, on the metrics

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Mike Doughty: that we’re going to have the biggest impact

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Mike Doughty: on improving things. And so you know, and just putting again.

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Mike Doughty: that’s the strategy. And then just putting in place. You know the projects and the and the tasks around doing. You know things in those areas and seeing you know what what works, what doesn’t. Sometimes, knowing what doesn’t work is just as important as knowing what does right.

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Dennis Gill: One desk. Yeah.

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Dennis Gill: I get that. I get that. So these are the 3 matrix that became non-negotiable for you.

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Mike Doughty: Yeah, yeah, we say, we measured the

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Mike Doughty: you know the time from claim to payment. We.

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Mike Doughty: He’s right.

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Mike Doughty: That structured scheduling percentage.

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Mike Doughty: The number of hours the caregivers were working. And then what was our activity and our conversions in that recruitment process.

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Dennis Gill: Okay.

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Dennis Gill: So everything gained step by step. So these are the 3 metrics. Obviously, listeners can take a note of it. And how did you refocus your core operating engine to regain stability without sacrificing margin.

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Mike Doughty: Yeah, and that’s a really interesting question. So when I looked at

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Mike Doughty: you know, I I look at sort of our general sort of model of what we’re trying to do is, you know, we all want

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Mike Doughty: we will need to have, I guess, a plan.

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Mike Doughty: We need to have predictability in terms of what we’re doing. And we also need to have progress.

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Mike Doughty: And for me, of those 3 things the operational part falls under that predictability.

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Mike Doughty: I can’t agree.

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Mike Doughty: And so within, in that we had, you know, 3 things we need to focus on. Say, one is, how do we install that

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Mike Doughty: So operating engine system into the business.

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Mike Doughty: How do we ensure that we have affordable support?

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Mike Doughty: For the business? So we need support. We need the, you know we need the sort of office team and the back office support.

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Mike Doughty: But how do we do that? What’s really important in an affordable way.

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Mike Doughty: And you know, with the advent of outsourcing. You know, there’s some things there that I’ll come back and talk about. So that was key, the affordable support.

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Mike Doughty: And then, thirdly, it was around the quality assurance.

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Mike Doughty: because in most businesses we have.

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Mike Doughty: When I look at the 3 so layers of systems, we have the. This is how we do it here.

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Dennis Gill: We have the.

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Mike Doughty: This is how we train. This is how we do it here.

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Mike Doughty: and then we have the 3rd level, which is, this is how we manage. This is how we train. This is how we do it here. And this is how we manage. This is how we do it here.

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Mike Doughty: So that quality assurance process is really important where, say, being Medicaid, you know, when a pretty highly regulated state, Delaware, in comparison to others. So the quality assurance was really important.

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Mike Doughty: So we we started to look at, I guess, predominantly, using sort of the outsource as a way to cure the affordable support. So we?

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Mike Doughty: We did a did a couple of things. One was

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Mike Doughty: in one of the pain points with the team in June was the on call. Like most companies we were having, the you know, the office team do the do the on call sort of during the week

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Mike Doughty: after hours, and I’d take, you know turns, and then and then during the weekend as well.

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Mike Doughty: And so we went, how can we one alleviate that sort of issue?

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Mike Doughty: And when I 1st started like the

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Mike Doughty: the office team. Some of them are not only doing on call, but if there was a call out they were going out as well, which, from an outside perspective coming in, I just that’s crazy. Why is my office person going out? Even so, hha, and and providing service?

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Mike Doughty: So we set up and created a an on call team that operated remotely based out of the Philippines.

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Dennis Gill: Okay.

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Mike Doughty: And looked at other ways, you know, with the billing and payroll, you know we outsourced that. So we ended up with a team

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Mike Doughty: of about so between 6 and 8 people offshore that were supporting the business.

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Dennis Gill: Oh, okay.

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Mike Doughty: And because of that I could

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Mike Doughty: I we ended up. Must be stripping out about 300,000 in sort of annual

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Mike Doughty: you know expense from the building.

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Dennis Gill: This is fine.

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Mike Doughty: Bring up.

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Dennis Gill: For outsourcing.

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Mike Doughty: Yeah, outsourcing and.

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Dennis Gill: Okay.

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Mike Doughty: You know. One of the things that I want to. Why, also, why did you set up your own sort of on call team well, because one was a quality perspective, we could control the quality. But but secondly.

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Mike Doughty: when they’re on on call, they aren’t busy all the time, not taking calls, you know, for the full shift, so I could access

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Mike Doughty: their downtime to then get them to do things in that quality assurance.

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Mike Doughty: sort of part, if you like, or category that I know, and I sort of knew that I needed to make sure that we had good service, so

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Mike Doughty: wanted to make sure they were checking the

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Mike Doughty: checking the shifts, you know, for you know, the previous day, to make sure that compliance things were dealt with.

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Mike Doughty: We got them to look at the shift schedule 2 weeks out, just as a as a second pair of eyes, in addition to the Staffing Coordinator, to see if anything was missing where the frequencies wrong. Just again.

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Mike Doughty: looking for those small little 1% gains. People say, you know, it’s not about about being a thousand percent better, but being sort of 1% better a thousand times. So we were just looking for those small little

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Mike Doughty: one percenters where we weren’t losing

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Mike Doughty: hours, we weren’t not spotting an increase in hours. We weren’t.

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Mike Doughty: and they could maybe contact a caregiver outside of ours

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Mike Doughty: at a reasonable time where we could get get hold of them and get them to pick up shifts.

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Mike Doughty: So those were some of the things that we so looked at from that

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Mike Doughty: operating engine as well as recruitment. So we then really looked at the recruitment side, looked at, what can we do to improve that?

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Mike Doughty: You know?

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Mike Doughty: Yeah, to me, there’s 2 really sort of key roles that influence sort of revenue. One is obviously staffing, and 2 is recruitment.

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Dennis Gill: Okay.

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Mike Doughty: Private pay and other businesses. Obviously, sales is in there as well.

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Mike Doughty: Yeah. So you know, we really looked at those 2 we have tried, you know, offshore recruitment.

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Mike Doughty: We got 2 recruiters on board, you know. Must be for the price of one locally. We tried that.

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Mike Doughty: you know. Didn’t really work that. Well.

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Mike Doughty: you know, we have brought people on locally and then provided them with support. We’ve found that to be, you know, really effective.

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Mike Doughty: So you know again, just back to the numbers, back to what do we do to to grow the

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Mike Doughty: the sort of caregivers that we need to provide the service.

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Dennis Gill: Okay, yeah, it is good to learn. And this continuing with this thing, that what partnerships did you lean on to rebuild cash flow efficiently. One. You said that outsourcing was one thing, what support system you did with outsourcing any other partnerships that you lean on.

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Mike Doughty: Yeah, I guess. Say, being Medicaid, you know, we

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Mike Doughty: we mostly we. We were at the time mostly Medicaid, and we had been credentialed for the Va. As well.

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Mike Doughty: but it might have been. The Va. Might have been less than 5% of our hours per per week. It was small.

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Dennis Gill: Okay.

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Mike Doughty: So we you know, through the process of like, say, looking at cash flow and looking at how do we maximize

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Mike Doughty: our gross profit. We we saw and begun to recognize that the Va. Had increased their reimbursement rates, and now they were actually on par with you know what you might get as a private pay client, and certainly, you know $5 more than what we’re getting reimbursement wise from our

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Mike Doughty: other payer sources in terms of the Mcos.

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Mike Doughty: So we went. Oh, let’s start focusing on, you know, the relationship that we have with the Va.

00:20:07.940 –> 00:20:08.259
Dennis Gill: See you.

00:20:08.260 –> 00:20:10.920
Mike Doughty: We can grow the number of clients.

00:20:11.477 –> 00:20:22.320
Mike Doughty: That we’re getting from them, because that $5 an extra gross profit if you’re making $10. Normally, that’s 15. That’s a 50% increase.

00:20:22.320 –> 00:20:24.410
Dennis Gill: 50% yeah, 50%.

00:20:24.410 –> 00:20:27.980
Mike Doughty: And over a number of hours that begins to make, you know, quite a lot of difference.

00:20:28.346 –> 00:20:30.180
Dennis Gill: It does. It does. Yeah.

00:20:30.180 –> 00:20:34.309
Mike Doughty: So we we really focused. And I know at the beginning it was hard, like

00:20:34.580 –> 00:20:55.490
Mike Doughty: we were calling them and contacting the case managers. And we were getting, you know, nowhere. Then we got like, you know, one client, and then, you know, we then after a while got 2, and then we sort of started to develop that relationship. So we really so leaned into, you know, developing the relationships more with the Va

00:20:55.730 –> 00:21:07.009
Mike Doughty: case managers, because we knew that growing that those hours would make a big difference. And we we grew that from like 5 less than 5% sort of what’s over 30%.

00:21:07.690 –> 00:21:08.060
Dennis Gill: Okay.

00:21:08.060 –> 00:21:09.600
Mike Doughty: Now, and the

00:21:09.800 –> 00:21:21.559
Mike Doughty: and the Dp. The gross profit on those hours now, I mean then it was like about one and a half times a normal hour from another sort of parcels. Well, now, it’s 2,

00:21:21.820 –> 00:21:22.460
Mike Doughty: you know, so.

00:21:22.460 –> 00:21:22.840
Dennis Gill: Alright!

00:21:22.840 –> 00:21:29.819
Mike Doughty: Every every hour that we get from the Va. Effectively counts as 2 in comparison. If you’re comparing apples to apples.

00:21:30.020 –> 00:21:35.870
Mike Doughty: So you know, that’s been that’s been again significant in terms of increasing

00:21:35.980 –> 00:21:40.030
Mike Doughty: our margin while doing effectively less hours.

00:21:40.780 –> 00:21:48.440
Mike Doughty: Okay on. You’ve stripped out the cost, you know, from by utilizing affordable support. It all begins to.

00:21:48.610 –> 00:21:49.300
Dennis Gill: You know.

00:21:49.400 –> 00:21:53.619
Mike Doughty: Filtered down to the bottom line all of a sudden. You’re you’re making

00:21:53.780 –> 00:21:56.440
Mike Doughty: more net profit than you were sort of doing.

00:21:56.570 –> 00:21:58.580
Mike Doughty: Sort of 50% more hours.

00:21:59.150 –> 00:22:00.966
Dennis Gill: Definitely it does, it does.

00:22:01.520 –> 00:22:09.439
Dennis Gill: And finally, Mike, looking back, what one question would you ask? Every home care owner, facing a similar revenue, plunge.

00:22:11.370 –> 00:22:16.430
Mike Doughty: Do they know? I guess their numbers, and like that continuum

00:22:16.958 –> 00:22:26.909
Mike Doughty: and and home care. So you know, we have 2 channels, if you like, that come in from sales for clients, from prospects to clients. We have

00:22:27.040 –> 00:22:45.514
Mike Doughty: the other channel that comes in for applicants to to caregivers. And there’s there’s a lot of sort of numbers along, you know that segment of each of those channels, and then it sort of goes into your operational system. In terms of, you know, things like, you know.

00:22:47.036 –> 00:22:54.860
Mike Doughty: percentage of the hours that you are filling. So there’s there’s numbers in the operational part, and then there’s sort of numbers related to

00:22:55.650 –> 00:23:13.179
Mike Doughty: billing and collecting and getting that cash into your bank. And do you know all of the little numbers that sort of go through that those 2 channels into the one that end up, popping out into the the next being cash flow. And if you do.

00:23:13.380 –> 00:23:17.700
Mike Doughty: then you know, where are the bottlenecks? Where is the

00:23:18.336 –> 00:23:29.319
Mike Doughty: whereas the indicator that if you so pull that lever, tweak that number, it’s going to give you like an outsized result for the energy that you put into it.

00:23:29.480 –> 00:23:35.750
Mike Doughty: So yeah, my question would be, so, do you know your numbers? Do you know how those sort of flow through

00:23:35.860 –> 00:23:40.059
Mike Doughty: the continuum of your business, and you know where your blockages are, and we’ll have

00:23:40.490 –> 00:23:43.249
Mike Doughty: blockages because we never where we want to be.

00:23:43.520 –> 00:23:49.950
Mike Doughty: You’re always, you know, sort of wanting to be sort of more in some way. So there’s always one thing that’s not working.

00:23:50.060 –> 00:23:52.539
Mike Doughty: Maybe, like, you know a whole lot, but so.

00:23:53.170 –> 00:23:56.499
Dennis Gill: Starting, starting in the area where you go. Okay.

00:23:56.650 –> 00:23:59.620
Mike Doughty: Some energy into this one area is going to give me

00:24:00.122 –> 00:24:07.740
Mike Doughty: you know, a greater you know, Roi, on my time, or energy or resource than something else.

00:24:07.850 –> 00:24:13.300
Mike Doughty: And so you can constantly be looking and focusing on those and working on them and

00:24:13.600 –> 00:24:15.310
Mike Doughty: and trying to get them done.

00:24:16.190 –> 00:24:38.329
Dennis Gill: So home care owners. You have your question, and you need to get an answer to this. So Mike did put a very right question for you. Please make a note of that and thank you. Thank you. Really, Mike, thank you for your expertise today. It was a really valuable session for all the home care owners who are tuning in.

00:24:38.330 –> 00:24:48.230
Dennis Gill: and I hope they learn from this if their business is not up to the mark at the time they learn from the experience that you have shared with them. Thank you. It was lovely talking to you

00:24:49.460 –> 00:24:56.830
Dennis Gill: and to our oh, no problem and to our audience. Thank you for tuning in, and until next time I’m Dennis Gill, signing off.

00:24:57.010 –> 00:24:58.240
Dennis Gill: cheers. Guys.

00:24:58.790 –> 00:24:59.460
Mike Doughty: Thanks.

00:24:59.940 –> 00:25:01.299
Dennis Gill: Thank you.