March 2008 issue

Dealing With Credit Stress In Today’s Market--
Challenges For Providers And Ways To Avoid Or Address Them
Michael D. Kelly, director at Ziegler Capital Markets, points out financial challenges for providers in a deteriorating market and suggests ways to avoid or address them.
...
Making Hospice Work... Really Work!--
The Hospice Of The Florida Suncoast Goes From Zero To ‘Top Dog’
The Hospice at Florida Suncoast has grown from a handful of patients and volunteers to thousands of patients, staff, volunteers, and a budget to match. President and CEO Mary J. Labyak tells how.
...
Q&A With Richard Larkin
Richard Larkin, senior vice president at Herbert J. Sims & Co., talks about the current bond insurance debacle and what it means for senior living providers.
...
Recent Financings
We detail some deals that closed in the last few weeks.
....
10 Common Mistakes That Senior Care Providers Make
Amy J. Hayman, managing director at Cain Brothers in Chicago, shares 10 common mistakes that can lead to credit stress and eventual default.
...

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Making Hospice Work... Really Work!--
The Hospice Of The Florida Suncoast Goes From Zero To ‘Top Dog’

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When The Hospice of the Florida Suncoast in Clearwater was founded 30 years ago, it had three patients, three staff members, six volunteers, and an annual budget of about $70,000. Today, The Hospice serves 2,500 patients a day with 1,400 staff members, 3,000 volunteers, and an annual budget of $150 million. It has blossomed into one of the nation’s leading not-for-profit community-based hospice and palliative care organizations through a relatively obsessive dedication to mission, a commitment to reach out to every dying person in the community, a focus on creating a “wow” factor for each and every person served, the use of marketing and technology to create consumer “buzz,” and a fair amount of fearless risk-taking, according to Mary J. Labyak, president and CEO.
It wasn’t easy in the early days. “We spent the first six or eight years just trying to keep the vision alive and to make this thing called ‘hospice’ financially supportable,” says Labyak. “It has probably been a 15-year period where we’ve seen sustained growth.”
The Hospice cares for about 63% of the people in the community who die of natural causes (15% of the population die from sudden, violent, or accidental deaths). That’s a significant market share by anyone’s standards.
About 70% of the care is provided to people in their own homes. The Hospice has one facility of its own and will have a second soon. It also contracts with 89 nursing homes, local CCRCs, and about 15 general hospitals in the community to provide hospice care.
One key to success for The Hospice has been embedding itself into the fabric of the community. “We participate in employee health days at corporations, work with faith-based organizations, and do a tremendous amount of work in the school system,” says Labyak. “We want people to know about us far before they need us.”
The involvement in the school system has been particularly rewarding. Besides emergency response efforts when a student has died or is killed, The Hospice has hundreds of teenage volunteers — most of whom do patient care and many of whom have gone on to medical or nursing school. “Even if they go into a totally different field,” says Labyak, “we feel that we’ve really changed their lives and their perception of these issues forever.”

Taking risks
Perhaps the greatest risk-taking that The Hospice has endured was persevering through those early years. “The idea of hospice was anything but widely accepted 30 years ago,” says Labyak. “It was viewed as a kind of fringe operation outside of the medical system.”
The Hospice has dealt with some rather dramatic events and situations, as well. One early morning years ago, the organization’s only facility burned to the ground. Left with hundreds of patients and not a single piece of paper or any medical supplies, closing down would have been the easier choice.
More recently, The Hospice was the care provider for Terry Schiavo. “Many people would have found a way not to be involved — and we even asked ourselves whether it should be us,” admits Labyak. “But we decided that providing care for her and for all her family is what we do, and our job was to stay focused on that. Her case just happened to get played out in a very public and potentially very dangerous and frightening way.”

Using technology
About 10 years ago, The Hospice team began to think about how to enhance care using technology and actually developed its own software. “Talk about risk-taking,” says Labyak. “We underestimated how challenging that would be but ended up developing clinical software for electronic medical records but also for pushing out best practices to staff and consumer pieces for people to use. We’re now really involved in using technology to create human touches — bringing families together when they can’t be together, virtual team meetings at the bedside, getting the physician involved, and so forth.”
Due to requests from other hospices to buy the software, The Hospice spun off Suncoast Solutions to sell and support the software. “As a result, probably one out of every four or five hospice patients in America is cared for with that technology,” says Labyak, “and we think we’re just beginning to understand everything about using technology to create human touches.”

Advice to providers
“Hospice programs like ours aren’t springing up anymore,” Labyak observes. “Instead, we see communities with 70 and 80 hospice programs, each with a half-dozen patients, that can’t offer anything beyond very basic hospice care.” The big question, then, is whether you need to do it yourself or can you partner.”
The margins for not-or-profit hospices are extremely slim — excluding philanthropy, total margins average 2% compared to 18% for for-profits, according to data from the National Hospice and Palliative Care Organization. Partnering, of course, provides economies of scale.

Looking ahead
In terms of the future, Labyak continues to focus on service excellence and innovative service delivery — and how to “hardwire” not just the quality of care but the quality of life issues.
“We’re always looking at access,” she adds. “Some people in the community still don’t find their way to us, and many find their way very late. And like everyone else, we’re also concerned about where we’ll find the workforce of the future.”
The Hospice at Florida Suncoast has had many opportunities for geographic growth and always chose to go deep instead of wide. That may be changing. The organization currently has an application pending to go into an adjoining county.
“Our having grown like this is nothing short of a miracle,” says Labyak. “We’ve grown beyond all expectations and couldn’t have dreamed this early on. We spent a good number of years just hoping we were going to be open the next day.”

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Making Hospice Work... Really Work!-- The Hospice Of The Florida Suncoast Goes From Zero To ‘Top Dog’

Making Hospice Work... Really Work!--
The Hospice Of The Florida Suncoast Goes From Zero To ‘Top Dog’