Providence Group CEO: Nursing Homes Must Become a ‘Destination Location’ For Leaders

By addressing the unique needs of each of Providence Group’s 152 facilities, CEO Jason Murray has created what he calls a “destination location for leaders.” 

Murray has done so because the future of health care, and the nursing home industry more specifically, is local, he said. This decentralized, market model has been replicated by operators across the country, and is one that Murray sees as the best model for success in the skilled nursing industry.

Utah-based Providence Group operates in the states of California, Nevada, Texas, Kentucky, Ohio, Missouri and South Carolina.

“We as a company believe as we continue to grow as we continue to scale, in not only the markets that we’re currently in but in other markets across the country, we can still accomplish growth by not adding those layers. I think part of that battle of working through that balance is first understanding that we can’t get too top heavy as an organization,” he told Skilled Nursing News on an episode of the Rethink podcast.

Highlights of the podcast, edited for length and clarity, are below. Subscribe to Rethink via Apple Podcasts, Google Podcasts, or SoundCloud.

On why the premise that health care is local is paramount and how that has played out in the company’s portfolio:

So we believe that health care is local and that’s been a strong belief of ours and an idea that we’ve worked hard to try and keep as we’ve grown, and we do that through our local policies, procedures, business practices.

So in practical terms what that means is that we try and make as many decisions as close to our patients and employees as possible.

So we believe each of our facilities is unique, their needs are unique and we believe our administrators and our teams are best equipped to make the best and most appropriate decisions for their patients and employees. So as a management company supporting those different facilities, we work to support that model.

We own and operate 152 facilities across the country. We’re in seven states and we have roughly 15,000 skilled nursing beds and just over about 25,000 employees. So we’re in the states of California, Nevada, Texas, Kentucky, Ohio, Missouri and South Carolina.

On whether a decentralized, market model is the way of the future for the industry:

That’s a good question. We believe that health care is local and so each community across the country has unique needs … And so that requires us to be deeply integrated in our community so we know how to serve its needs. I believe this is the most effective management model for the industry. So personally I hope to see more providers evolve into that.

It’s been my experience that as organizations grow, they feel the need to add layers upon layers of additional support staff and by doing this you further distance yourself, the c-suite distances itself and the corporate office distances itself from the actual patient and the employee experience. So it becomes easy at that point to lose touch with the actual needs of our patients and employees. When this happens it becomes incredibly difficult, and I would even argue impossible, to appropriately meet the needs of our patients and employees.

When I got in the industry 22 years ago it has changed [since then] and some of these larger providers who have a centralized model of making decisions and disseminating that out to the facilities, we’ve seen through sad experience that that does not work — and because of that those larger companies now no longer exist.

We as a company believe as we continue to grow as we continue to scale, in not only the markets that we’re currently in but in other markets across the country, we can still accomplish growth by not adding those layers. I think part of that battle of working through that balance is first understanding that we can’t get too top heavy as an organization.

So I think just understanding and having an acknowledgement that it’s easy for that to happen, I think puts us in check as a company and has allowed us to avoid some of those pitfalls that other companies in the past have had to deal with.

On what factors Murray keeps in mind when looking to grow:

What I believe makes us unique as a provider is our ability to recruit and retain some of the best talent in health care and in business management. We’re a leadership company and so we believe our administrators are the best leaders in each of the communities we serve across the country.

So as we consider growth, one of the most important decision points for us is whether we have talent necessary to operate the facilities we may be targeting. If the answer is yes that we have that talent, the underwriting and diligent process becomes a little easier. So I would say that our main decision point is the ability to infuse talent into whatever targets we’re looking at.

We’ve worked hard at developing a deep bench of talent that can help us as we grow. So what that looks like is that we, at any given time, have close to today I believe it’s about 30 administrators in training across our portfolio where we are actively working on developing these future leaders into administrators who will then take over the enterprises of their facilities and do special things.

When we talk about the landscape of talent at the administrative level within our company, we have some highly skilled individuals. So we’re talking [about] people who are previous business owners, prior professional athletes, collegiate athletes, highly entrepreneurial type minded individuals who are driven to this concept and idea that they are the captains of their ships. When they are running their facilities they are the captains, they have the ability to make decisions and affect change in a way that they maybe can’t do in other industries.

Once our future leaders and our current leaders see that vision of being able to impact people’s lives in a positive way, it truly is infectious. Our model, I’ll also share this, is not for everyone. The idea of having the reins of an enterprise, to create a business plan and, in many cases, we’re taking distressed assets and to turn those distressed assets around to see the transformation with the patients and the care model and with our employees as well and their engagement … It takes a unique personality.

So we have found as we’ve interviewed individuals, sometimes they just don’t gravitate towards that and so we try to be very, very selective on who we include in our leadership teams.

On what staffing wins and ongoing challenges:

Staffing has been and still is a major challenge for our industry. Like many providers, we’ve been working hard to combat that challenge. We have had headwinds along the way, but I will say one thing that we’ve worked hard to do is track and trend the KPIs related to our workforce, and I’m very proud of the fact that we perform very well in relation to the different states and national averages for key metrics like staff turnover, staff satisfaction.

I would say if I can share maybe one strategy that I think has helped us in this area is the idea of creating a career path for our clinical staff. What that looks like in our company is — and I know we’re not unique in this, other providers have done similar things — but we have found that it has created some stickiness for us with our staff and it’s also helped boost morale, especially during extremely challenging times.

So what that looks like is we have CNA schools across the country in the different markets that we’re in so we can take someone who’s interested in becoming a CNA and, after a period of time, get them certified and they work for hopefully quite some time in the facilities in those markets where we have the schools. We have a career path for CNAs to become LPNs or LDNs. So that includes going to school and for us paying for that schooling. We have a clear path for LDNs and LPNs to become RNs if they have an interest, and again that includes us paying for their schooling in order for them to achieve that. We have a career path for our RNs to become directors of nursing (DONs) or to become case managers or other leaders within our facilities or within our regional leadership as well in different markets that we’re in.

So all of that combined I think has helped. There’s other strategies we’ve deployed as well, but I would say that has been one of our most effective at creating stickiness with our staff and improving morale.

It’s been a pretty uniform challenge across our portfolio. So as I mentioned earlier, we operate from California to South Carolina, and although the specific challenges are unique to the markets that we’re in and the communities that we’re in, there are a lot of similarities between what’s happening in South Carolina versus what’s happening in California versus what’s happening in Kentucky.

One of the specific challenges that we’ve been facing in every one of the states that we’ve been in is the pressures from the staffing agencies and their practice of essentially poaching our staff and then renting them back to us for a much higher wage than what we paid them otherwise.

So one thing we’ve done to combat that is we’ve opened our own staffing agencies and those staffing agencies staff our facilities and it’s created healthy tension and competition in the markets where we’ve struggled with the staffing agencies. As we’ve looked at those KPIs, we have seen a marked improvement in our staffing utilization and just the overall cost of staffing.

On Murray’s vision of the skilled nursing facility of the future:

I would say that the changes that we’ve seen over the last call it 10 years or so of the acuity being pushed down from the hospital into the skilled nursing facilities, that is not going away. We believe that the acuity from the hospital will continue to flow into the skilled nursing facilities and that we as providers need to be prepared for that level of acuity.

So what that looks like is being able to obviously attract staff but also train staff and have the resources that they need in order to take care of that increased acuity. There will always be a need for skilled nursing facilities in the health care continuum … There’s 15,000 across the country today and as we know with the aging population that is not going to be enough to meet the needs of the aging population in the United States.

One of two things needs to happen: either we need to build more or there will be an evolution of existing skilled nursing facilities taking more acuity and some of that being pushed down to even assisted living or home health and that care being done in the home.

I believe that not only will we see acuity continue to get pushed down to the facilities but the health care expenditures will continue to be put in the lowest cost setting. So if you can take care of a diagnosis in a home cheaper than you can in a skilled nursing facility, then I believe that’s what you’re going to see — and we’re already seeing some of that today.

As a company we’re trying to position ourselves so that we can have as much touch on that patient post acute so that we are in a good position to succeed, even with all the pressures and changes that will happen in years to come.

On what one thing providers should rethink about the industry:

I believe that providers need to embrace the idea that we’re going to continue to have to do more with less. We’re going to have to continue to be experts at becoming efficient at what we do. We are going to have to evolve as an industry to make skilled nursing a destination location for leaders.

If providers can rethink their efforts to make their companies, make their facilities a destination for employment, for talent, that is going to transform our industry and it’s going to elevate everyone. It’s going to make all of the facilities across the country better if we can work towards that end.

It’s not easy to do, it’s not cheap to do either, but it will absolutely pay dividends from a quality of care standpoint, from an economic standpoint as well if we’re willing to create special destination locations for our staff to want to come.

Editor’s Note: Subsequent to recording the podcast and publication of this article, a spokesperson for Providence Group clarified to SNN that the facilities referenced in this interview are owned and operated by subsidiaries and affiliates separately from Providence Group.

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