Pinnacle Home Care CEO: Home Health Margins Will Increase ‘Significantly’ With AI

If you don’t like change, you’re going to hate extinction. That’s a phrase that should be hung up on home health providers’ walls across the country, according to Pinnacle Home Care CEO Shane Donaldson.

There’s traditional Medicare rate cuts, Medicare Advantage (MA) penetration, staffing shortages and regulatory challenges in the home health market. But Donaldson sees solutions to most of those problems on the horizon.

Emerging technologies – and in particular, artificial intelligence – will alleviate some of the contemporary pressures in the space, he believes. And when those pressures are alleviated, margins will skyrocket.

“At the moment, we need to go from surviving to thriving,” Donaldson recently told Home Health Care News. “With new technologies, we can thrive.”

Based in Oldsmar, Florida, Pinnacle Home Care is one of the largest home health providers operating in the state. The New York-based HCS-Girling recently acquired Pinnacle Home Care, which plans to significantly expand in the coming years.

Donaldson has been at the helm of Pinnacle for over two decades.

He recently sat down with HHCN to discuss the current state of the home health industry, the company’s decision to join HCS-Girling and how technology will usher providers into the next era of home health care.

The conversation is below, edited for length and clarity.

HHCN: So, you believe that the emerging technologies in home health care can really ease some of the pain providers are currently feeling?

Donaldson: I completely do. If you don’t like change, you’re going to hate extinction.

We are on the precipice of a technological revolution. I know that for some people it is exciting, and for other people it is alarming and concerning. But you’re either on the train, or you better jump on soon, because it’s leaving the station. That’s the reality of it.

When you look at the technologies that are entering the market, there’s opportunities to automate the processes we previously needed people for. I’m not a big believer in eliminating people, I am a big believer in eliminating things that people don’t like doing – those repetitive processes that people often don’t like to do, and the ones they make mistakes while doing.

We’ve got the technology.

I was a clinician up until seven years ago. My average day was this: I start by seeing my first patient at 8:30 in the morning. I’m really done by about 2:30 p.m., but I haven’t done my documentation. I then get engrossed in looking after my family, waiting for the 6 p.m. time to turn over, because the office has been working on all the referrals that are coming in. And because I’m an evaluating clinician, I can’t call them to organize my schedule until they’ve processed them. I then spend the next hour organizing them geographically, right, calling them all, leaving voicemail messages – that interrupts me between 6:00 p.m. and 7:00 p.m. at night. Then I go back to my family, and when I’ve tucked them into bed at night, I start my third shift and do my documentation, all while being interrupted by patients that call me and say, “I can’t make the time that you want.”

At this stage, we can fix – or are close to fixing – two of those major elements. There is software now for scheduling so the clinicians don’t have to be interrupted at 6 p.m. It’ll automate. There is also software that does documentation. We know it can reduce documentation time significantly, by even two-thirds.

When you look at back-office activities, you’ve got to do this across everything in your organization, right? You have to look at all of the opportunities. I actually think that in the interim, our margins will increase significantly, for those that are bold enough to be on the forefront of that.

And you previously mentioned that you believe the margins will actually improve so much that CMS will look to cut rates again.

Absolutely. That’s what the cost reports will show. But that’s a great problem to have.

At the moment, we need to go from surviving to thriving. With new technologies, we can thrive.

How do you feel about being with HCS-Girling during this time period, when you are exploring innovation more?

We have always been highly innovative as a home care organization. I think that’s part of our secret sauce. We’re doing things that a lot of other organizations aren’t doing.

We are very, very early adopters of technology, even if we have to be a partner in the development of it. So for example, with KanTime, we’re working with them on an ongoing basis to automate the whole scheduling process.

I’m convinced to a very significant degree that, if you fix scheduling and documentation, you will own the market when it comes to clinicians.

Without those issues, why would anyone leave?

And it’s all about getting there first, because if everybody has it, then it becomes a commodity. But if you have it now, and it takes others a long time to adapt to it, then you have the distinct advantage.

HCS-Girling is generally a home care company, and you’re a home health company. Why do you think there was interest there?

In terms of size and volume, probably a quarter to a third of all of their business is skilled home health care. In that business, they’re about growth and expansion. They found us as, I believe, to be a highly innovative organization. We can now partner up and learn from each other.

We’ve been able to do some things in Florida that very few organizations have done, which is grow incredibly rapidly to the point where we’re now the largest home health agency. That’s appealing to another organization that is also aggressively growing.

HCS-Girling is in New York, you’re in Florida. Is the goal to fill out the coast between the two organizations?

I really wish I had a crystal ball to answer that clearly. But for now, we’re going to do some de novos in the Florida Panhandle. And then I would imagine that, within six months, we’ll be looking at acquisition opportunities in the Certificate of Need states that are adjacent to us.

As a strictly home health provider, do you find it easier to operate that way, without other service lines?

We didn’t always just do skilled home health. For about three years, we dabbled, we acquired some small locations that either did just purely private duty or did a combination. And after about three years, we realized that we really couldn’t be great at both, and we weren’t willing to deploy the resources to separate those entirely, because it’s a completely different mindset.

I would say that, along my evolution, I’ve been taught a couple of things. One is to stay in your lane, right? I’ve really taken that to heart. And whenever we’ve tried to deviate and look at the next shiny object, we’ve realized that we’ve paid a price for it.

Also, in Florida, we’ve got hospices that are Certificate of Need. Incredibly difficult. You’d have to have large sums of money to be able to do that. And in private duty, there’s really no federal payer. They do have Medicaid coverage, but there’s just no margins in it at all, as opposed to other states where Medicaid pays almost like Medicare. So I think it’s really dependent upon your market and your payer structure.

Finally, Florida was a demonstration state in the Home Health Value-Based Purchasing (HHVBP) Model. How is that going for you now that it has been rolled out nationwide?

One of the things that I think we do reasonably well – that we can improve upon – is we don’t leave it strictly in the hands of our clinicians. So we all know all of the things that constitute HHVBP. There’s a large outcomes component, and then you’ve got a satisfaction component. Let’s park the satisfaction component for a moment.

We introduced a system where our clinicians, when they come out of seeing a patient, they call what we call a home health agent, and they have about a 12-minute conversation with that agent, and the agent that transfers that and completes the OASIS, and then it goes to QA behind the scenes.

We’re not going to leave it in the hands of the clinician to interpret an OASIS manual when they don’t have the level of sophistication or understanding. And then, when you have subsequent OASIS elements, we do exactly the same. They come out, they either leave a voicemail message or they have an interview with one of our agents. The agent is the transcriber, populates it into the OASIS, and that goes to QA, and they review, compare and contrast.

So I just think that you have to have a level of sophistication, certainly when you’re starting to grow. You can’t expect your clinicians to be able to do that and know that, and have the knowledge base for it.