| Staff as Customers of SNFs in a Value-Based Care Market | <p><img src="/Articles/PublishingImages/740%20x%20740/staff_3.jpg" class="ms-rtePosition-1" alt="" style="margin:5px;width:200px;height:200px;" />Change is a constant that skilled nursing facility (SNF) leaders must navigate, but in the transition to value-based care, SNFs must accelerate their evolution to meet customer quality expectations. SNFs pursuing the AHCA/NCAL National Quality Award learn the importance of delighting customers, because those who aren’t engaged with the SNF will not continue the relationship. While residents have always been the customer that inspires the pursuit of excellence, the Centers for Medicare & Medicaid Services (CMS), also a customer, sets expectations for excellence. To meet the expectations of both residents and CMS and succeed in the value-based care market, SNFs must also treat staff as customers and delight them.</p><h3>CMS Sets Quality Expectations </h3><p>“Quality” is a nebulous term; the customers’ expectations define the degree of excellence sought. As the largest payor of healthcare services, CMS is the biggest customer in terms of financial support. CMS therefore defines quality for all SNFs. <br><br>CMS emphasizes staffing’s importance by including workforce stability in the quality equation. Staffing measures already affect facilities’ Five-Star ratings. Moreover, the Fiscal Year (FY) 2024 Skilled Nursing Facility Prospective Payment System (PPS) proposed rule adds the same Nursing Staff Turnover measure from the Five-Star Quality Rating System to the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) program, thus financially incentivizing or penalizing facilities’ staff retention performance.<br><br> In the future, CMS plans rulemaking regarding a minimum staffing mandate. While SNFs oppose this mandate, citing evidence it could cause serious problems including lack of access to care, the message is clear that CMS equates staffing levels and workforce stability with quality of care. SNFs cannot meet CMS’s expectations without prioritizing staffing.</p><h3>Creating Value Depends on an Engaged Workforce </h3><p>The traditional fee-for-service structure separated quality care outcomes from reimbursement, but CMS’s shift to value-based care has made quality synonymous with financial stability. Value for customers, including CMS and residents, requires sustained quality outcomes that are generated in an effective and efficient manner. An engaged workforce is essential to create that value. SNF success in a value-based market therefore depends upon staff. </p><h3>Impact of Government Funding and Policies</h3><p>With a staggering staffing crisis, attracting a workforce is a daunting challenge, yet one that is vital for SNFs. Not only does the future require a pipeline of developing leaders, but current operations are in dire need of staff now to provide care. With that in mind, SNFs must remain united in urging federal and state governments to fund quality care that allows SNFs to pay competitive wages and attract top talent. Continuing to lobby for policies that incentivize work in SNFs and increase the pool of who can enter healthcare is vital for the profession. </p><h3>Engage Staff for Excellence</h3><p>Leaders who value the workforce can more successfully attract and retain staff. The Baldridge Excellence Framework states “an organization’s success depends on an engaged workforce that benefits from meaningful work, clear organizational direction, the opportunity to learn, and accountability for performance.” Although it may require changes to operations or their own behaviors, leaders can act immediately to enhance these factors in their facilities. <br><br>Meaningful work is deeply personal; individuals must believe their actions make a difference or serve something they view as important. SNFs present a unique opportunity to bond with residents while providing care to those who need it. Leaders should acknowledge these relationships and celebrate staff contributions to quality-of-care outcomes. By reinforcing the impact staff have, leaders can cultivate meaning in the work environment. </p><h3>Make Time to Inspire the SNF’s Vision and Mission in Staff</h3><p>Leaders may find themselves focusing on problems and addressing staff only when tasks are incomplete. While resolving issues with staff performance is an essential management responsibility, this is not the only time staff should interact with leadership. Staff want to know what direction the SNF aspires to go—the vision—and the SNF’s mission—the purpose of the SNF. Leaders should diligently and intentionally communicate with staff in a way that reinforces realizing those aspirations and purpose. Staff need to know their responsibilities are more profound than simply completing tasks; they need to be inspired by how their role contributes to achieving the vision and mission. </p><h3>Invest in Staff Education </h3><p>While regulatory compliance is important, if the goal of educating staff is avoiding citations, leaders are missing the opportunity to show they value staff and prioritize individuals’ development. To demonstrate this perspective, invest in the staff’s professional development. Provide education staff need to advance their knowledge and cultivate skills they can use to fulfill their roles’ responsibilities. Not only does this send the message that staff are valued, but it can also improve the quality of care and services for residents. </p><h3>Align Staff Education with Processes and Policies </h3><p>Ensure that staff competence equals compliance. When staff become competent performing a skill, but bad processes mean that even outstanding performance does not lead to compliance, they often feel defeated and perceive that leaders don’t care about the quality of their performance. Leaders are responsible for designing processes that allow staff to consistently apply the skills they are competent in, but leaders must ensure that staff doing so are compliant; following the SNF’s policies should lead to compliance with the regulations. Staff feel confident when they are empowered to do their best, providing quality care and services to residents. </p><h3>Involve Staff in Quality Improvement</h3><p>To keep staff engaged through accountability, encourage them to take ownership of results, including those that show achievement or progress. Keep staff informed of progress made and reinforce their contributions by sharing goals and correlating performance data. For example, discussing resident satisfaction scores for nursing care with nurses and certified nursing assistants encourages them to take credit for a job well done and allows leaders to give kudos for excellent care. When the data indicates a decline, seek insight from staff to understand what is not working well; they may be best positioned to identify barriers to quality. <br><br>Furthermore, employ their solutions to overcome the barriers. When leaders solicit and apply staff feedback, it reinforces that all staff are expected to produce solutions and that leadership values them for doing so. </p><h3>Summary</h3><p><img src="/Articles/PublishingImages/2023/Alexis-Roam-2023.jpg" alt="Alexis Roam" class="ms-rtePosition-2" style="margin:5px;" />SNFs that value staff as customers can not only attract and retain a workforce but also thrive in a value-based market. During an unprecedented staffing crisis, it is even more critical to embrace staff as customers; seize every opportunity to delight them and strengthen the relationship. <br><br><em>Alexis Roam, MSN, RN-BC, CPHQ, DNS-MT, QCP-MT, Curriculum Development Specialist for the American Association of Post-Acute Care Nursing (AAPACN).</em><br></p> | 2023-06-08T04:00:00Z | <img alt="" src="/Articles/PublishingImages/740%20x%20740/staff_3.jpg" style="BORDER:0px solid;" /> | Workforce;Caregiving | Alexis Roam | To meet the expectations of both residents and CMS and succeed in the value-based care market, SNFs must also treat staff as customers and delight them. |
| The Hidden Costs of a Ransomware Attack | <p><img src="/Articles/PublishingImages/740%20x%20740/computer_security.jpg" class="ms-rtePosition-2" alt="" style="margin:5px;width:200px;height:200px;" />As information about yet another health care-related ransomware attack <a href="https://www.silive.com/news/2023/05/richmond-university-medical-center-suffers-ransomware-attack-unclear-if-patient-info-compromised.html" target="_blank">hit the news recently</a>, the health care industry needs to be taking notice and fortifying defenses and infrastructure as the cost of a breach in the health care industry has gone up 42 percent since 2020. For the past dozen years, health care had the highest average data breach cost—at $10.1M per breach—of any industry, according to an <a href="https://www.ibm.com/reports/data-breach" target="_blank">IBM study</a>.</p><p>The unprecedented rise of cyberattacks is due to a number of factors, including the increasing sophistication of hackers along with the growing number of devices connected to the internet. With more devices online, there are more opportunities for hackers to exploit vulnerabilities and gain access to sensitive data.</p><p>For threat actors, ransomware is a lucrative attack method, and critical infrastructure is a prime target. From <a href="https://www.dice.com/career-advice/colonial-pipeline-ransomware-attack-lessons-for-technologists" target="_blank">oil pipelines completely shutting down</a> for weeks at a time, to water companies finding out they are <a href="https://cyberscoop.com/water-industry-ransomware-insurance/" target="_blank">no longer insurable</a>, and the <a href="https://www.healthcaredive.com/news/cyberattacks-hospitals-disrupt-operations-patient-care-Ponemon/631439/" target="_blank">decline of patient care and outcomes</a> impacting the health care industry, the mounting costs of ransomware attacks are beyond alarming.</p><p>While most cybersecurity incidents are unsophisticated, opportunistic, and automated, taking advantage of easily fixed vulnerabilities for most organizations, providers need to understand that there are large and very sophisticated cybercrime syndicates that are structured like legitimate corporations, with executives, shareholders, salaried staff, and advanced operations.</p><p>In order to defend against these criminals, educate staff and establish frequent and ongoing internal discussions about your state of cyber readiness, actions that are being taken to address vulnerabilities, and hold attack simulations and exercises. This way, if an attack occurs, you are able to act quickly and according to a well-defined triage security process and plan.</p><h3>What Are the Hidden Costs of a Ransomware Attack?</h3><p>When considering ransomware attacks, many of us only consider the amount of the ransom payment, which is just a small fraction of the total cost of a successful attack. However, a ransomware attack can adversely impact a business in a variety of ways.</p><h3>1. Lost Revenue</h3><p>When ransomware strikes, the stark reality is, you're going to lose revenue. The loss may be a direct result of the attack because business continuity was upended with some of your systems rendered inaccessible by the malware. But it may also come from the ensuing fallout of becoming a victim of ransomware.</p><h3>2. Ransomware Payments</h3><p>Ransom payments, if paid, typically go into a cryptocurrency account, which can be very difficult to trace. While there have been some instances where businesses have been able to recover their data after paying the ransom, this is generally not a recommended approach. There is no guarantee that the attacker will actually provide the decryption key that enables data recovery, and if they do, the experience can be very costly and disruptive for the business.</p><p>In addition, by paying the ransom, businesses are effectively funding the attackers' future operations.</p><h3>3. Post-Mortem Investigation</h3><p>A ransomware attack can have significant business costs beyond the initial ransom payment. The victim company may need to hire forensic consultants to conduct a post-mortem investigation in order to determine how the attackers gained access to their systems and what data was encrypted. This can be a costly and time-consuming process, particularly if the attackers used sophisticated methods to cover their tracks. Most companies impacted by ransomware see downtime of anywhere from 2-4 weeks, and sometimes more.</p><h3>4. Cyber Insurance Premium Increases</h3><p>The most expensive cyber insurance is the coverage you are unable to obtain because the risk level within your business is too high to be insurable. If you do fall victim to a ransomware attack, your premiums are going to go up significantly.</p><p>And the cyber insurance market <a href="https://www.fitchratings.com/research/insurance/us-cyber-insurers-see-favorable-premium-growth-results-in-2023-13-04-2023#:~:text=Fitch%20estimates%20industry%20statutory%20direct%2cincreased%20by%2062%25%20in%202022." target="_blank">continues to see solid growth</a> since its peak in the fourth quarter of 2021.</p><h3><strong>5. Technology Hardening</strong></h3><p>In the wake of a ransomware attack, it is essential to take steps to harden your technology infrastructure. This includes both implementing immediate changes during and after an attack and making long-term changes to prevent future attacks. Among the most important immediate changes is ensuring that all systems are patched and up to date.</p><p>Keep in mind that this involves more than simply putting together a vulnerability management plan. While it's true that you can often stay one step ahead of attackers by applying patches to vulnerable systems in a reasonable timeframe, a big part of your technology hardening plan should also include implementing a defense-in-depth strategy.</p><p>It is also important to conduct a review of all systems and security settings and make any necessary changes. All these steps, while critical, are going to cost your company money, so be prepared to evaluate investments in modernizing solutions and infrastructure.</p><h3><strong>6. Software Updates</strong></h3><p>If you haven't kept your software up to date, part of your ransomware remediation plan should include making those necessary changes.</p><p>While maintaining up-to-date software is a hallmark of a strong security policy, it still represents a financial burden. But as the adage goes, an ounce of prevention is worth a pound of cure. Keeping your systems up to date will reduce your risk of becoming a victim of a ransomware attack.</p><h3><strong>7. Legal Costs</strong></h3><p>Legal fees associated with recovering from a ransomware attack can set the business back years simply due to the sheer magnitude of the costs, with one company recently reporting <a href="https://www.csoonline.com/article/3654293/sec-filings-show-hidden-ransomware-costs-and-losses.html#:~:text=Ransomware%20costs%20one%20company%20$50%2c$64%20million%20in%20lost%20revenue" target="_blank">$50 million in non-recurring legal expenses</a> associated with an attack.</p><h3><strong>8. Reputational Damage</strong></h3><p>In ransomware attacks on critical infrastructure, <a href="https://www.jdsupra.com/legalnews/the-cyber-incident-reporting-for-6058324/" target="_blank">reporting the attack</a> is a requirement. Additionally, if the ransomware prevents you from providing services to or accepting payments from your customers, it is going to significantly damage your organization's reputation. Reputational damage can stem from negative press, regulatory enforcement actions, or service outages that affect clients. All of these forms of reputational damage can affect the way in which your company is perceived by both new and existing customers, potentially hurting your customer renewal rates as well as new customer acquisitions.</p><p>Recovering from the reputational damage of a major cyber incident can be a <a href="https://www.forbes.com/sites/forbestechcouncil/2022/04/08/ransomware-damage-are-you-forgetting-about-your-reputation/?sh=6ef4c23f5c48" target="_blank">costly endeavor</a>, requiring swift and positive press coverage, new ad campaigns, monetary commitments to customers, and, potentially, even an entire company rebrand, depending on the severity of the incident. All these initiatives will require additional funds that were likely not accounted for in original budgets, as well as months or years to rebuild public trust.</p><h3>What Should I Be Doing Now?</h3><p>Defending against ransomware is no easy task. But there are a few things that every organization should be doing to reduce risk. One of the main focuses should be around employee awareness training, since most cyber incidents involve human error.</p><p><img src="/Articles/PublishingImages/2023/Kent-Shanklin.jpg" alt="Kent Shanklin" class="ms-rtePosition-2" style="margin:5px;" />From an information technology perspective, the following should be viewed as table-stakes security policy:</p><p></p><ul><li><strong>Mandating multi-factor authentication.</strong> It just takes a minute to set up, and this should be used throughout the organization and across assets.</li><li><strong>Aggressively managing access.</strong> Adopting a “least privilege" approach can help safeguard sensitive systems and information.</li><li><strong>Blocking known threats.</strong> Any access into or out of your infrastructure (firewalls, devices, systems, and applications) should be locked down.</li><li><strong>Actively monitoring for suspicious activities.</strong> Bad actors are scanning for open ports and looking for ways to get in, so active monitoring is essential.</li><li><strong>Implementing all required security software.</strong> If you don't know what's required, ask an expert.</li><li><strong>Immediately remediating known vulnerabilities.</strong> A robust vulnerability management program includes automated patch management and ongoing monitoring.<br></li></ul><p><em>Kent Shanklin has spent over 30 years as a technology professional and is chief revenue officer at Defensible Technology. Shanklin can be reached at </em><em><a href="mailto:kshanklin@defensible.tech" target="_blank">kshanklin@defensible.tech</a>.</em></p> | 2023-06-06T04:00:00Z | <img alt="" src="/Articles/PublishingImages/740%20x%20740/computer_security.jpg" style="BORDER:0px solid;" /> | Cyber Security;Data Security | Kent Shanklin | With more devices online, there are more opportunities for hackers to exploit vulnerabilities and gain access to sensitive data. |
| Human Touch and Health Care Technology Work Best Together | <p><img src="/Articles/PublishingImages/740%20x%20740/telehealth.jpg" class="ms-rtePosition-1" alt="" style="margin:5px;width:200px;height:200px;" />Although popular at the beginning of the twentieth century, the practice of doctors making<a href="https://www.empr.com/home/features/physician-house-calls-an-old-model-with-a-modern-day-twist/" target="_blank"> house calls</a> largely ceased by the 1970s. But now, medical professionals are once again appearing in our living rooms for routine check-ups, outpatient care, and to answer pressing health concerns. This is the result of telehealth solutions: apps and secure video platforms built to connect patients to providers from the comfort of their own homes. </p><p>In 2020, the use of telehealth services increased by more than 2,000 percent from January to June, according to<a href="https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2773059?guestAccessKey=317d95c1-0e1d-4ba2-9cb9-5944d75d333e&utm_source=silverchair&utm_medium=email&utm_campaign=article_alert-jamainternalmedicine&utm_content=olf&utm_term=111620" target="_blank"> a study</a> in <em>JAMA Internal Medicine.</em> That jump has since leveled off, but most patients look forward to a future of telehealth visits. Surveys find that<a href="https://www.healthcarefinancenews.com/news/most-consumers-want-keep-telehealth-after-covid-19-pandemic#:~:text=Almost%252088%2525%2520of%2520Americans%2520want%2cafter%2520COVID%252D19%2520has%2520passed.&text=Before%2520the%2520COVID%252D19%2520pandemic%2ca%2520novelty%2520than%2520a%2520necessity.&text=By%2520March%2520of%2520this%2520year%2chad%2520undergone%2520a%2520telehealth%2520visit." target="_blank"> 88 percent</a> of Americans favor using telehealth after the COVID-19 outbreak abates and<a href="https://www.fiercehealthcare.com/payer/cvs-study-how-pandemic-boosting-healthcare-consumerism" target="_blank"> 75 percent</a> view digital solutions as essential to their care. </p><p>But while the pandemic prompted widespread adoption and trust of telehealth services, it has also highlighted the negative effects of<a href="https://news.stanford.edu/2021/02/23/four-causes-zoom-fatigue-solutions/" target="_blank"> virtual interactions</a> and<a href="https://www.cdc.gov/aging/publications/features/lonely-older-adults.html" target="_blank"> physical isolation</a>. At our core, humans are social creatures. When we feel ill, a hand to hold or a reassuring hug can be transformative. </p><p>As digital advances in health care progress, it's crucial to center human touch in the medical field. It's one way to guarantee innovation aimed at improving patients' experiences and outcomes doesn't inadvertently become a distraction from them. Below are three major benefits to sustaining or enhancing personal interactions with patients—especially when paired with new technology. </p><h3>1. Human Touch Has Its Own Healing Powers.</h3><p>From an early age, being held promotes healthy development. A 2011 study of<a href="https://journals.sagepub.com/doi/10.4276/030802211X12996065859247" target="_blank"> touch in the first year of a baby's life</a> demonstrated that skin-to-skin contact with newborns can help regulate their body temperature, heart rate, and breathing. </p><p>As we age, regular massage therapy can similarly decrease heart rate, blood pressure, and cortisol levels, according to<a href="https://www.sciencedirect.com/science/article/pii/S0273229711000025#s0115" target="_blank"> a study</a> by the<a href="https://med.miami.edu/en/centers-and-institutes/mailman-center/community/other-community-based-programs/touch-research-institute-archives" target="_blank"> Touch Research Institute</a> in <em>ScienceDirect.</em> With loved ones, touch is vital to building relationships and warm, fuzzy feelings—cuddling has been shown to increase a person's level of oxytocin a.k.a. “the joy hormone."</p><p>In hospital settings, touch can reassure patients undergoing procedures or experiencing stress. It also numbs feelings of pain. Researchers in 2006<a href="https://pubmed.ncbi.nlm.nih.gov/17201784/" target="_blank"> reviewed MRI scans</a> of women in pain when they were alone, holding hands with a stranger, and holding hands with their romantic partners. Pain reactions were highest when a participant was alone and lowest when holding the hand of someone they loved. </p><p>Technology in the medical field can streamline processes like prescription refills, sharing medical charts between providers, and scheduling appointments, but it's unlikely to replicate these innate powers of touch. </p><h3>2. Human Touch Builds Patient-Doctor Confidence.</h3><p>Beyond physiological responses to human contact, interactions with doctors can simply make patients more at ease when sharing health concerns and personal details. A pat on the back might make someone feel their needs are really being acknowledged. Of course, consent is always necessary in such situations. Making assumptions about a patient's comfort level can backfire, leaving them with a negative experience and delaying medical care. </p><p>But respecting patients' boundaries doesn't mean sending test results or difficult diagnoses through an impersonal email (or in one infamous case, delivered by<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6546565/" target="_blank"> a rolling video-link “robot"</a>). More than ever, good bedside manners can provide calm during uncertain times. Demonstrating empathy, compassion, and support<a href="https://stanfordmedicine25.stanford.edu/blog/archive/2018/patientperspective.html" target="_blank"> improves patient satisfaction</a>, and in some cases, leads to better health outcomes. </p><p>In a recent <em>Harvard Business Review</em><a href="https://hbr.org/2020/11/put-doctors-at-the-center-of-health-care-tech" target="_blank"> op-ed</a>, Daniel Marchalik, medical director of Physician Well-Being at MedStar Health in Washington, D.C., urges technology creators to center both the patient experience and doctors' needs. He argues that reliance on telehealth services can cause greater burnout in providers, eroding their ability to care for patients. The best technology strengthens the patient-doctor relationship, rather than impedes it. </p><h3>3. Human Touch Improves and Supplements Technology Advances. </h3><p>A majority of digital health care solutions are less than a decade old. Disease-identifying algorithms and artificially intelligent MRI scan readers have immensely improved accuracy in the field, but there is always room for improvement. There are still<a href="https://qz.com/989137/when-a-robot-ai-doctor-misdiagnoses-you-whos-to-blame/" target="_blank"> cases</a> of medical technology misdiagnosing illnesses and failing to identify certain symptoms. </p><p>No matter how accurately these programs identify miniscule cancer cells, diagnose rare diseases, and never falter due to lack of sleep,<a href="https://hbr.org/2019/10/ai-can-outperform-doctors-so-why-dont-patients-trust-it" target="_blank"> patients still trust human providers more</a>. Keeping this in mind will help incorporate new technology into annual appointments, treatments, and outpatient care while maintaining patient safety and confidence.  </p><p>As far as telehealth visits go, medical professionals say the distance can mean missing certain health concerns like heart problems or the underlying cause of chronic pain. Listening to someone's explanation of chest pain is not the same as listening to their heart with a stethoscope. Other doctors cite the absence of the exam's “ritual."</p><p>“There's something about going through a history and being examined—and that ritual provides real comfort and meaning to both a physician and to the patient," Dr. Paul Hyman, of the Maine-based Mid Coast Medical Group,<a href="https://www.npr.org/sections/health-shots/2020/08/31/907187908/as-telemedicine-replaces-the-physical-exam-what-are-doctors-missing" target="_blank"> told</a> <em>NPR.</em> </p><h3>Looking Forward</h3><p>A growing body of evidence suggests that health care technology is best used in tandem with traditional care. Artificial intelligence and video chat services cannot mimic the benefits of human touch in the medical field, but they can allow overwhelmed providers the space to focus on the patients in front of them. </p><p>Telehealth use has stabilized since peaking in 2020, but it's here to stay—the market is<a href="https://www.globenewswire.com/news-release/2021/11/19/2338331/0/en/Telehealth-Market-Size-to-Worth-Around-USD-224-8-Bn-by-2030.html#:~:text=According%2520to%2520Precedence%2520Research%252C%2520the%2c18.8%2525%2520from%25202021%2520to%25202030.&text=19%252C%25202021%2520%28GLOBE%2520NEWSWIRE%29%2cUSD%252040.3%2520billion%2520in%25202020." target="_blank"> estimated to surpass $200 billion by 2030</a>. As innovation continues to grow at dizzying rates,<a href="https://hbr.org/2020/11/balancing-virtual-and-in-person-health-care" target="_blank"> experts recommend</a> providers follow a few guidelines to maintain the quality of care provided: <br></p><ul style="list-style-type:disc;"><li><p>Develop criteria for determining which patients need in-person or telehealth care. These can be based on a patient's medical history, current symptoms, or on which services can be carried out remotely.</p></li><li><p>Follow recommendations from trusted sources, like the CDC and the Department of Health and Human Services.</p></li><li><p>Preserve patients' confidentiality by evaluating the secureness of virtual platforms and conducting visits from a private space. </p></li><li><p>Create a system to evaluate the effectiveness of virtual care—assess metrics like visit length, patient satisfaction, and video quality.</p></li><li><p><img src="/Issues/2020/August/PublishingImages/JoelLandau.jpg" alt="Joel Landau" class="ms-rtePosition-2" style="margin:5px;width:175px;height:211px;" />Find ways to connect with<a href="https://www.healthcareitnews.com/news/telehealth-used-less-disadvantaged-areas-health-affairs-study-finds" target="_blank"> patients in vulnerable populations</a>, such as those who do not have easy access to a phone or computer in order to utilize virtual care. <br></p></li></ul><p>The bottom line? No matter how far technology advances in the health care industry, there will always be a place for human touch. It is invaluable and will forever linger.</p><p><em>Joel Landau is founder and chairman of The Allure Group.</em></p> | 2023-05-30T04:00:00Z | <img alt="" src="/Articles/PublishingImages/740%20x%20740/telehealth.jpg" style="BORDER:0px solid;" /> | Telemedicine | Joel Landau | As digital advances in health care progress, it’s crucial to center human touch in the medical field. |
| Improve Engagement and Retention with Employee Stock Ownership Plans | <p><br></p><p><img src="/Articles/PublishingImages/740%20x%20740/stock.jpg" class="ms-rtePosition-2" alt="" style="margin:5px;width:200px;height:200px;" />With many health care companies facing hiring and retention challenges, the idea of creating an employee stock ownership plan (ESOP) has proven to be an effective management and ownership method that prioritizes employees and provides quality care to residents.</p><p>One such company is Bridges Health, headquartered in Oklahoma City, Okla., where Brett Coble, CEO, said his operational ESOP exists today because the family-owned business grew over time to build a legacy where people and generosity were always at the forefront of the family's mind.</p><p>Those key values are why Bridges Health's ESOP is unique in Oklahoma as the only 100 percent employee-owned company in the skilled nursing and long term care sector.</p><p>There are approximately 6,500 ESOPs in the United States with approximately 13.9 million participants collectively, according to 2020 data from the National Center for Employee Ownership. ESOPs represent a variety of industries including finance, retail, construction, and technology services. About 2 percent of those are in the health care sector.</p><p>“Our mission of serving others with compassion and dignity strongly aligns with the idea of employee ownership," Coble said. “Being an employee-owned company certainly benefits employees, but it's much more than just a financial benefit. Locations that are part of the Bridges Health ESOP have implemented programs to further develop a workplace culture of ownership."</p><p>Michael Moore, CEO of North American Health Services (NAHS), transitioned to an ESOP in 2018. Its owner at that time saw an opportunity to turn the company over to the employees in what could be viewed as a type of ownership succession plan, Moore said.</p><p>“He felt this was a way to give back to the employees and provide them with an opportunity to contribute to their future," Moore said. “I think he made the right choice."</p><h3>ESOPs Create Pride and Ownership</h3><p>Moore said there's a direct connection between employee engagement and those who have a sense of belonging and value. “Every business wants an employee base that performs with a sense of pride and ownership and an ESOP allows just that," said Moore.</p><p>“By practicing what we preach, we prioritize our employee-owners through inclusion and involvement," Moore continued. “We rely on their input and lean on their expertise to help us shape policy and procedure with an emphasis on continuous improvement. Our employee-owners are the greatest process improvement resource we have. The more we rely on them, the more they contribute to making us better."</p><p>The Bridges Health ESOP has an Employee Communications Committee comprised of employees who work at various locations in diverse roles. The Committee creates monthly activities to promote and educate their peers and local community service providers about the ESOP.</p><h3>Making Your Company the Best Place to Work</h3><p>ESOPs can help companies recruit and retain staff, Moore said, “but only if your employees feel like owners. The most important emphasis for an ESOP is company culture. If we're not sincerely prioritizing making our company the best place to work, it won't matter what our share value is or how much our employees are paid."</p><p>“Committing to continuous improvement as an operator and an employer is the surest way to creating and nurturing an exceptional work environment in which employees feel seen, heard, and valued," said Moore. “Our culture is our reputation, and we have to be honest about how that impacts retention and recruitment, and we have to be willing to do the work that makes us better."</p><p>At Bridges Health, the ESOP is introduced early to applicants through social media channels to help candidates better understand what it means to be part of a 100 percent employee-owned company.</p><p>“As an applicant, when you have the potential opportunity to work with individuals who are learning about how to be employee-owners, that's attractive and unique," Coble said. “It has the potential to transform the work environments."</p><p>Like other ESOPs, the Bridges Health ESOP has a vesting schedule that encourages employee retention. “When employees see their first statement, there's a certain level of interest and curiosity particularly in the early stages of vesting," Coble said. “There's excitement about receiving a statement each year."</p><p>At NAHS, the structure depends on how long an employee has been with the company. Employees aged 21 or older who work at least 1,000 hours per year are eligible to participate in the ESOP. Employees begin vesting after one year, which increases each year thereafter until they are fully vested after 6 years.</p><p>Coble said that many ESOPs utilize formulas to determine the calculation of shares employees receive after they enter the ESOP and meet certain eligibility requirements such as hours of service and years of service. The value of those shares is determined annually by an independent valuation firm.</p><h3>Sharing Company Profitability</h3><p>Coble said employee ownership requires a consistent communication strategy to ensure employees understand the value of what it means to be a 100 percent employee-owned company.</p><p>The Bridges Health ESOP prioritized creating communication tools for employees to think about what it means to be part of a 100 percent employee-owned company that provides a service to people.</p><p>Moore said that buy-in and consistent commitment to behaving like an ESOP is a primary challenge.</p><p>“The idea of sharing company profitability can be uncomfortable for some and the process of setting up an ESOP structure is labor intensive," he added. “However, like any other meaningful endeavor, the investment of time and effort required is ultimately worth it."<br></p><p>There are several professional service groups exclusively operating in the ESOP development space, and Coble said they can assist in evaluating whether a particular business could be a good candidate to become an ESOP.</p><p>The ESOP formations at Bridges Health and NAHS were set up through investment banker Laca Wong-Hammond, a managing director for Lument. There are also several advocacy organizations that provide education surrounding a variety of ESOP topics from employee ownership culture to technical questions.</p><h3>Employee-Centric Benefits of an ESOP</h3><p>Operating as an ESOP requires due diligence and an examination of how much you want to invest in the ESOP, according to Moore. Considerations need to be made about whether the company wants to be 100 percent employee-owned or 70 percent, for example.</p><p>“Regardless of which approach anyone chooses, the conceptual benefits of an ESOP are hard to argue with," Moore said. “Investing in a business model that is employee-centric while sharing the benefits of company growth with the very employees that created that growth seems suitable for any business.</p><p><img src="/PublishingImages/Headshots/PaulBergeron.jpg" class="ms-rtePosition-1" alt="Paul Bergeron" style="margin:5px;width:175px;height:175px;" />“Most of the time, when publicly traded companies share their growth with shareholders, it is more transactional," said Moore. “Whereas for ESOP shareholders, it's very personal. They are employee-owners who invest physically, mentally, and emotionally in the growth and progress of the company. I would rather be accountable to our employee shareholders who contribute to our success than to those who don't."</p><p><em>Paul Bergeron is a freelance writer based in Herndon, Va. </em></p> | 2023-05-25T04:00:00Z | <img alt="" src="/Articles/PublishingImages/740%20x%20740/stock.jpg" style="BORDER:0px solid;" /> | Workforce | Paul Bergeron | The idea of creating an employee stock ownership plan has proven to be an effective management and ownership method. |