Home Care 2.0: Scaling Growth through Acquisitions & Innovation

Home Care 2.0: Scaling Growth through Acquisitions & Innovation

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Welcome to CareSmartz360 On Air, a Home Care Podcast. I’m Dennis Gill, Senior Sales Consultant at Caresmartz. Today, uh, we are speaking with a true growth architect, Michael Ford, Chief Development Officer at Angels in Your Home. Michael leads the charge in scaling home care, assisted living services, bringing mergers, and acquisitions into harmony with organic growth. We’ll dive into how agencies can expand smartly, innovate fearlessly, and build the future of care. Let’s get started. Welcome to the

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podcast, Michael. >> Thank you for having me. >> Okay, so Michael, without wasting any time, let’s jump on to straight away our first question. So, uh, Michael, what are the top three red flags to look for before acquiring a homecare agency according to you? >> So, really there’s not a top three. You really have to align everything with what your agency’s strategic plan is. What is your one year, three year, 5year growth plan? What are you looking to accomplish when looking to acquire

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agencies? Are you looking to acquire census? Are you looking to acquire talent from that agency? Are you looking for synergies that may help not only your agency but the agency you’re acquiring operate more efficiently? So, there’s multiple things you’re looking for and not necessarily red flags. There are things that will stop a deal from going through um such as you get through due diligence and you find compliance issues that happen to hit with the state department of health that are just too

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deep for you to be able in your current role to fix. However, I’ve also run into that where that’s a good time to go in and fix it and take and acquire an agency. So, every deal a red flag is deal specific. What might be a red flag on deal one may not be a red flag on deal six. >> Okay, that’s it. That’s your point. So, there are no specific red flags we can mention on that thing. >> For for us, no, I look at it deal by deal to be honest with you. You know, mostly compliance, nursing issues. Um, a

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big thing I like to see is, hey, how are they operating? Where what does their P&L look like? Okay, where can I go in there and look and go, okay, we have an office administrator that can cover this office. Great. Okay, which one’s the better office administrator to use for that? What are some of the give backs that you can look at when looking at a P&L from a synergy standpoint? And another thing is how is it being operated? Is it a wellrun operation or do you have to go

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in and completely change how it’s operated? >> Okay. Okay. Yeah, depends upon deal to deal then. >> And how should a smaller independent agency balance M&A with organic growth? >> It comes back to your strategic thought process for us. The way we’re looking at it is so angels in your home. This is the first time that us as a company got into it. I’ve been doing mergers and acquisitions for the past 5 years. just came over to Angels in Your Home in May of this past year.

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>> Okay. >> And it’s very strategic on what we’re looking for. We have a thesis that we’ve created, and we’ve created a five-year strategic plan that we want to meet growth goals. Um the size of the agencies we buy today may not be the size of the agencies we buy tomorrow. It’s very specific on how we designed our plan. We sat down. We had multiple meetings. Our CEO, our owner, and our chief nursing officer/chief operating officer got in a room together, hashed out our ideas, and we all agreed upon.

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What that strategic plan should be over the next 5 years, what size agencies we should be going for, where are the target areas we want to go, what states do we want to go look at? So, from a smaller agency that’s never gotten into it, finding someone like me that can come in and create that plan, put that plan together and be on the same page as everyone on the senior management team that meets that growth. Hey, because when you acquire, you may acquire five clients, you may acquire a thousand

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clients, you still got to grow whatever size that agency is. So there also has to be a business development plan at the back end of those mergers and acquisitions because for most acquisitions it takes anywhere from 3 to 5 years to get your purchase price back when looking at an acquisition. So, you have to build in how you are going to organically grow it and put targets on that agency to stay on track. >> Okay. Uh to continue with this and what makes an agency an attractive acquisition target right now mostly you.

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have answered that. Anything else you want to add to that? >> For me, it’s it’s state byst state. Um, where do you want to go? What are their payer sources? Are you looking for Medicaid? Are you looking for private pay? Are you looking for an agency that’s working with the new guide program that’s out there where home care companies can get respbit services and get Medicare dollars in reimbursement through the guide program? Um, do they have a partnership maybe

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with like the Alzheimer’s Association or ALS or Beat Parkinson’s? Um, what are their niches that you don’t do that you can bring to your new company? For example, like are they really good at private pay? Uh, well, maybe we’re really good at Medicaid, but we don’t know how to do private pay. We can learn from this agency and then bring it over to our market. Do they have one of those partnerships we just talked about that we can learn from and then bring it over to the markets we are

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already in and looking for things like that like uh are they a veteranson company because the VA is a great source to provide excellent service for those that have allowed us in the United States of America to live the way we live with the freedoms that we have. So can we go service the veterans? what is that niche that each agency has and seeing where that fits in with what your agency looks to do. >> Got it. Got it. Got it. >> For us, we we want to become parody diverse. Um we with how government’s

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going right now, it’s hard to say what is our Medicaid reimbursement dollars going to be in 1, three, five years? What is Medicare going to look like in 1, three, five years? So, pay diversity >> is a huge thing that we are looking for as a company. Yeah, diversity is the main thing. >> And uh uh which technology or service model is giving agencies the biggest competitive edge cost to you? >> Repeat that question really quickly. I’m trying to fit there. I got to think

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about how to answer that one. >> Which technology or service model, anything out of those is giving agencies the biggest competitive edge post deal? Once deal is done after that, what’s you think is the biggest advantage? competitive advantage. >> So, obviously EMRs are great if there’s EMR like synergies, you’re using the same EMRs, that’s easy. You’re not having to do an EMR transition post acquisition. So, that’s that’s a good competitive advantage for you to have.

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when doing it because then you’re not training those employees you you keep onto a new EMR. From a service model perspective, for us, it’s what are you doing organically growth? where can we step in and help you? You know, are are you struggling with recruitment? Great. Let’s us step in and help you with recruiting more caregivers. That’s something that is always huge. We know it’s a national caregiver shortage um going on right now. And caregivers are the lifeblood of home care in our

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industry. You know, if you don’t have caregivers, you can’t have clients. So, how are you working to how are you working to get those caregivers and then incentivize those caregivers to do well? Like, do you have like a back-end AI such as Caribou or something along those lines where caregivers if they’re doing EVV compliance, they’re providing proper care, they’re earning rewards. Or are you do do you have that internal system at your agency to do that where you’re

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providing a reward such as hey you do this we’re going to get you a $50 gift card for wherever you would like to go for doing that extra service going above and beyond you know and then how do you get those caregivers because let’s be honest caregivers know caregivers to bring their friends over to be caregivers in your at your place. >> Definitely. Yeah, little push does help. >> Mhm. And uh what are the most common mistakes agencies make during integration and how can they avoid them?

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>> Jumping in and making changes way too soon. >> Jumping. Yeah. >> You think you think you know what you know during due diligence and then you get in and like we’re going to make that change immediately and it’s maybe that was a bad mistake. You know, it’s it’s going in there and really taking that first 30, 60 days when you’re truthfully operating the business >> and learning how that business truthfully operates. You can know what you know during due diligence, but

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something always comes up during integration that is different than you thought you were going to see during due diligence. And it’s how are you agile enough to >> learn from it and make the right decision? Because your way as the acquirer isn’t always the best way, you know, you can always learn from the agencies that you acquire, you know, and change different ways of doing things. >> And you do both skilled, non-skilled, Medicare, Medicaid, all kinds of. >> So, we currently only do non-skilled.

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home care. In the past, I’ve done both non-skilled and skilled. So, I do have experience in that. Um, recently I’ve kind of changed my thesis, my personal thesis on I always believe that owning home care and a home health made sense and eventually owning all three. Home care, home health, hospice. The more I’m looking at it, I think it’s really what what is your focus for us being home care, I would lean towards getting into hospice before I would lean towards getting into home health first. So like

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if I had to rank it for us as a company of what’s the next post-accute service we would expand into, I would look at hospice before I would look at home health strictly because those two those two entities refer to each other more >> than home health does. >> Okay? you know, >> because you’re really doing more hospice agencies need home care companies to provide personal care services at times and there’s more clients on home care that need hospice services than home

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health. What I’m what I’m learning. So, from a referral source standpoint and you want to pass business back and forth between the agencies and the entities that you own, hospice and home health seem to really be the right spot to go. However, I am also a believer in having all three. >> All three. Got it. Got it. And finally, uh the last thing that our listeners want to know, how do you see the home care market evolving in next three to five years and how should agencies position themselves on that, too?

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>> So, it’s it’s really a 50/50 proposition. The way I’m looking at this, a lot’s going to come down to what happens revolving around government funding >> coming up in the next three to five years. what does the current administration decide to do and revolving around Medicaid and Medicare? Um, so I think it’s going to be a cautious acquisition environment. However, I think you’re going to see a lot of smaller agencies looking to consolidate and partner and become a

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larger entity. I think that’s really where you’re going to see you’re going to see your smaller agencies that are looking to become a mid or a large size. go after the smaller mom and pop agencies, family-owned or somebody that was a caregiver, decided to open a com home care company, got it to the clientele that they can get it to, and they’re stretched thin at that point. That’s the max they can take it to, but yet they’ve done it well. They’ve done it really, really well, but they need.

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somebody to come in and help them take it to the next level. Those are for us at Angels in Your Home, those are a great target because you’re doing something well, but operationally you’re stretched thin. You don’t want to expand anymore, but you know there’s growth potential in the markets that you’re there. That’s where somebody like Angels can come in, keep that staff on board, learn from that staff, and then help them grow it in that area. >> Oh, okay. Okay. So, the smaller agencies

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You see, they would be moving into the midsize or the larger Correct. Got it. Yeah. Got it. Right. So, thank you for your input today, Mike. And it was great talking to you and obviously our listeners must have had some great benefits from this. And uh I will be in touch with you. Our marketing team will keep up with you. And thank you for your time today. No problem. Thank you for having me. I really enjoyed the conversation and hopefully this helped uh those that are.

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listening. Surely. Thank you, Mike.