March 9, 2011

Welcome to Private Duty Today, the bi-weekly electronic newsletter for Private Duty Home Care Leaders from Leading Home Care... a Tweed Jeffries company. I'm Jason Tweed, Director of Business Development for Leading Home Care and Editor of Private Duty Today.
Private Duty Today is published every other Wednesday, and currently goes to over 8000 subscribers.
Private Duty Today is a permission-based newsletter.

In This Issue

  • Close More Sales
  • Private Duty Today - Upcoming Academies
  • Introducing... The Advanced Academy
  • Growing Trend In Home Health Care... Private Pay
  • The Waterford Group
  • We Have What You Are Looking For!
Close More Sales With Effective Communication

Men and women communicate differently. According to some, women want you to understand they are from Venus; while men want to teach you to build rocket ships, preferably from duct tape.

Let's face it, people don't always tell us what they want and need directly.

A good private duty salesperson learns to listen between the words. Often the questions people ask don't get to the root of why they are buying your services, or more importantly, why they aren't going to buy your services.

Critical listening is one of the most important components of the sales process. Too often sales people rehearse their presentation, but miss the sale because they presented an offering that wasn't appropriate.

When families ask, "What are your hourly rates?", often they want to know, "Can I afford care?". This makes the salesperson's job more difficult because frequently the families don't even know the questions to ask to get the information they need and want.

Good fact-finding questions and critical listening are keys to success.

Find the family's true motivation, and you will be able to answer their questions appropriately and close the sale.

Family caregivers frequently need respite care, but sometimes they see it as one more service they need to manage. Reluctance to using respite often stems from being overwhelmed already. Focus on rest and relaxation that respite can provide.

Privacy is a critical issue for many families. They need help, but are concerned about having an outside individual come into their home on a regular basis.

Some families want caregivers who become part of their family. Other families want caregivers to blend into the surroundings and become a resource.

Questions about personal care can stem from guilt. The son or daughter knows they can't provide appropriate care with dignity, and may know they don't have the training needed. Focus on the improved quality of life, independence, and dignity that quality care provides.

Questions about background checks and drug screenings often mask the real concern. They want to know if you are going to provide security or added risk. Refocus these conversations to discuss integrity and honesty.

It's impossible to present a valid solution until you know the problems a family wants to address, the real problems.

When meeting with a potential client or referral source, introduce yourself in an interesting way, indentify similarities to build rapport. Then, stop talking. Just listen. Listen not to the words, but to the message and motivation behind those words.

Only after identifying true need will you be able to offer the right solution, and close more sales.

We just returned from New Orleans, LA and the first Academy for Private Duty Home Care for 2011!

We'll have at least 7 more Academies around the country this year, and we'd like to invite you to join us in a city near you. (Or a city that's more fun then your own!)

In New Orleans, we learned a couple of things from the feedback from the group.

First of all, they gave us an average score of 9.3 on a scale of 1 to 10 for the overall value of the workshop. Then, they told us that the most important "keepers" or high value take-aways were:

1. New marketing ideas & strategies
2. Finding high value prospects
3. How to grow the business
4. How to get the best caregivers (selection process)
5. Creating competitive advantage
6. Strategic planning
7. Benchmarked financial data analysis
8. Leadership skills

If you would like to get the latest strategies, insights and benchmark data to grow your private duty business join us at one of our upcoming Academies:

March 17, 2011: Tempe, AZ - Co-hosted by the Arizona Association for Home Care and the NPDA Arizona Chapter

May 3, 2011 Raleigh, NC - Hosted by the Association for Home Care & Hospice of North Carolina

May 17 2011: Indianapolis, IN - Hosted by the Indiana Association for Home & Hospice Care

May 25, 2011: Newton, MA - Hosted by The New England Home Care Conference (Registration opening soon!)

June 14, 2011 Philadelphia, PA - Hosted by the VNAs of America specifically for VNAs and other not-for-profit home health agencies with private duty home care.
The Advanced Academy

We have also learned that the participants in our past Academies are really looking forward to our Advanced Academy, which will kick on on April 6 & 7, 2011 in Orlando, Florida (co-hosted by the Home Care Association of Florida). This one and a half day interactive program is designed for previous graduates of the Academy and for the more experienced owners of larger private pay businesses. The group will be limited to 30 participants and registrations are coming in fast.

If you would like to really go deep into the best practices to grow your business, then you'll want to be in Orlando for The Advanced Academy for Private Duty Home Care.

Growing Trend in Home Health Care... Private Pay

We're at the middle of another seven year cycle in home health care. For the past 30 years, home health care reimbursement has changed every seven years or so. We saw changes in 1982, 1989, 1997, 2000, 2008, and now we're looking for more changes over the next three years leading up to the full implementation of the Patient Protection and Affordable Care Act in 2014.

What does that mean for home health agency leaders? One of the things it means is a trend toward looking for other streams of revenue besides Medicare and Medicaid. That has led to the explosive growth of private pay, non-medical home care in Medicare Certified Home Health Agencies. While we've been seeing this trend for a number of years, 2011 is starting off to be a big year for home health agencies refocusing on private pay.

We see three elements of this trend:

1. Agencies with successful private pay businesses are looking for ways to grow the business and make it more profitable.

2. Agencies with struggling private pay businesses are looking for ways to turn around their troubled business.

3. Agencies that do not now have private pay, are exploring the potential for the future.

Where is your agency in this trend?

At our recent Academy for Private Duty Home Care in Louisiana, about 40% of the group was made up of certified agencies who want to grow their private pay business.

We saw agencies from all three categories above. They are looking for strategies and insights to help them grow and be more profitable.

Our private duty benchmarking research shows that there were 10,581 Medicare Certified Home Health Agencies at the end of FY 2009. We estimate that as many as half of them have, or, are exploring private pay.

Private Pay in Home Heath Benchmarks

Just released this past week was Leading Home Care's 2010 Private Pay in Home Health Benchmarking and State of the Industry report. This report is based on an industry survey of home health agency leaders who have private pay businesses. We learned some interesting facts that helped to clarify our understanding of the private pay sector and the various types of companies.

For example, we learned that the median sized private pay business had annual revenue of $2,118,048, as compared to private duty franchise businesses with median revenue of $637,796 and independent companies with median revenue of $802,434.

While the CHHA based companies are larger, their growth was slower in 2006 and 2007 when the franchises and independents were growing between 20% and 35%. Then when the franchises and independents slowed in 2008 and 2009, the CHHA based companies grew 34.4 and 28.2 % respectively.

We also learned that CHHA based agencies tend to be less profitable than franchises or independents. Franchises showed owners compensation and net profit of 11.93% of revenue while independents showed 16.6% of revenue. CHHA based agencies in our benchmark group earned a net profit of 2.72% and returned 5.39% to their parent organization in overhead allocation for a total of 8.11%.

2010 Private Pay in Home Health Benchmark Report now available.

The final version of the 2010 Private Pay in Home Health Benchmarking and State of the Industry Report has been sent to all of the agencies who participated in the survey, and to our co-sponsors at the Accreditation Commission for Home Care and VNAs of America.

Now you can get a copy of this report by logging onto www.privatedutytoday.com/benchmarks.

Here's what you'll find in the final report:

Chapter I: Home Care in America - An Industry Overview

Chapter II: Overview of the Study

Chapter III: Industry Data and Benchmarks

Summary of revenue data from 2004 - 2009

Growth data for three types of companies

Mean and Median Benchmarks for:

  • Agency overall revenue
  • Private pay revenue
  • Clients served
  • Hours of service
  • Revenue per client
  • Revenue per service hour
  • Caregivers employed
  • Revenue per caregiver
  • Cost of care provided
  • Gross margin
  • Office wages
  • Marketing expenditures
  • Recruiting expenditures
  • Other overhead and corporate allocation
  • Net profits
  • Net profit and corporate allocation

Data comparison between franchises, independents, and CHHA based companies

Chapter IV: Best Practices

  • 27 Elements of a Successful Private Pay Business
  • Four Big Barriers to Success
  • Top Techniques for Sales and Marketing
  • Top Techniques for Recruiting Caregivers

Chapter V: Industry Associations

Chapter VI: Accreditation

Appendix: Industry Resources


What To Do When You Want To Sell Your Business!

As you know, we talk frequently about creating an EXIT STRATEGY for your business and as we say "the best time to start planning your exit strategy is the day after you start your business. If you didn't do it then, NOW is the right time!"

While trying to help our readers follow that mantra we came across Kevin Taggart of The Waterford Group. Kevin and his team are focused and committed to helping companies just like yours, in preparing to sell their business when the time comes. Kevin has a deep understanding of what it takes to make this decision and he looks forward to helping you through the process of selling your business.

The Waterford Group is a mergers and acquisitions firm that specializes in selling Private Duty, Home Health and Hospice companies. The Waterford Group helps you define a practical business sale plan, with the ultimate goal of protecting, and increasing your exit value. Selling a business is generally a significant financial event in your life and its implications can impact retirement, future business endeavors and your personal net worth.

Most business owners do not have the time, experience or resources to professionally market their business. Selling at the wrong time, to the wrong buyer or without the right information can substantially lower the value of your business.

The principals in The Waterford Group are former agency owners that successfully sold their company, so they understand some of the uncertainty that you may be feeling, and are uniquely qualified to help guide their clients through the sales process. It's never too early to start thinking about your exit strategy, so when you're ready to put a plan in place, please think of The Waterford Group. We encourage you to learn more about The Waterford Group by visiting their website at www.thewaterfordgroupinc.com.
We Have What You Are Looking For!


Whether you are looking for help with marketing, selecting the best caregivers, improving your process for phone inquiries or new revenue sources, one of the e-books or e-tools listed below will be sure to help you achieve your goals in 2011.

To order one of these outstanding products or learn more about it, just click on the title.

Our most popular e-books:
Marketing to Die For...Without Killing Your Budget - by Patricia Mennoni and Angela Landmesser
Increase Your Income Selling To Bank Trust Officers and Other Trusted Advisors - by Michael Sullivan and Stephen Tweed
Capture the Caller: Turning Inquiries into Admission in Private Duty Home Care - by Barbara Akst and Stephen Tweed
Get the Best: Nine Steps to Hiring Quality Caregivers and Improving Your Bottom Line in Private Duty Home Care - by Leigh Davis and Stephen Tweed

Our most popular e-tools:
1. Private Duty Strategic Scorecard
2. Caregiver Recruiting & Retention Scorecard
3. Home Care Billing Rate Calculator
4. Lost Opportunity Cost Calculator