New Day Healthcare has been making some big moves.
The Fairview, Texas-based company this week announced that Bill Dombi, former CEO of the National Association for Home Care & Hospice (NAHC), has joined its Board of Advisors. And New Day also recently announced an acquisition that expands its portfolio in Texas.
With this as the backdrop, Home Health Care News recently spoke with G. Scott Herman, founder and CEO of New Day, about the company’s growth, the political climate and public policy outlook, workforce initiatives and more.
Herman spoke to the moves that the Department of Government Efficiency (DOGE) has been making, as well as the uncertain outlook for Medicaid. While Herman is glad to have Dombi in New Day’s corner during this period of change in Washington, D.C., and is preparing to be adaptable, he also remains firmly focused on some issues that have remained constant for years. Foremost among these is the growing caregiver shortage, as well as the huge effect that the growth of Medicare Advantage has had on the sector.
The conversation below has been edited for length and clarity.
HHCN: You employ approximately 8,000 caregivers and serve a patient population of about 150,000. What challenges does that present?
Herman: One challenge associated with our workforce size is the ongoing need for labor. Our industry relies heavily on labor to provide care. Successful recruiting and fostering a positive culture are essential for establishing a dedicated workforce, keeping employees engaged and ensuring retention. We accomplish this through several strategies.
Our organization’s primary focus is our culture program, which is implemented across all business lines, regardless of the brand. This culture is unified by CPR: Connect, Promise and Reach. Each employee has “CPR” printed on the back of their name tags, which helps them to stay connected and use our various cultural tools. Our programs for 2024 and 2025 are called Rise, enabling employees to leverage those resources to engage with people in their individual locales.
Due to our remote workforce, we take a unique approach to gathering feedback. Each month, we hold mandatory town hall meetings in various geographic locations, which we refer to as “pop-up events.” These meetings occur in community settings such as coffee shops, restaurants, parking lots and donut shops. We encourage our staff to stop by, enjoy a coffee and share their thoughts. We want to know what’s going well, what needs improvement and what just needs to be done.
We share the feedback we gather with senior management, including myself, so that we can take appropriate action. For instance, if someone mentions needing a different approach during colder months or suggests a shift in hours, we consider those insights seriously. We evaluate whether we need to create new work lines or adjust our existing practices.
However, our biggest challenge remains our labor force. As a result, recruiting, fostering a positive culture and retaining employees are among our top priorities.
What skills will be in demand over the next five years for caregivers?
The demand for direct caregiver skills will always be significant; however, these skills must be aligned with the ability to use technology and emerging artificial intelligence (AI) tools. We are undergoing a dynamic shift in this area.
Our CIO, Dave Marchand, who previously served as CIO of Delta Health Systems, explained it this way: Throughout the history of our business and many other industries, we have used data to influence behavior. Last year, we requested data to help us produce outcomes. However, with the rapid advances in AI and machine learning today, our approach has shifted. We now must ask, “What do I need to accomplish?” and “What data will support that?” This represents a significant change in perspective. Instead of simply saying, “Give me the data, and I’ll drive the outcome,” we are now focusing on the outcome itself and determining how the data can help achieve it, particularly in the context of care delivery.
My approach has evolved from a tactical and hands-on method to one centered around the outcomes I aim to achieve. This involves understanding not just the basic tasks but also the psychosocial factors and behavior modifications necessary for success, as well as conducting comprehensive assessments—not only within the home environment but also in terms of the home’s geographic location.
For instance, in Beaumont, Texas, we conduct respiratory studies based on the geographical context where a significant population of patients resides. We’ve found that many of these patients have respiratory diagnoses, symptoms and related issues that are influenced by their environment, mainly due to a large refinery in the area. As a result, we need to implement respiratory programs that we hadn’t considered before. This shows that while diagnosis tracking is important, understanding geography plays a crucial role in our approach. Ultimately, our goal is to improve respiratory health outcomes for our patients.
As a former paramedic and first responder, how did your experiences lead you to found New Day?
As a paramedic and a flight nurse, I was comfortable going into homes, rapidly assessing patients, understanding what was happening in the environment, quickly stabilizing them and transporting them to the hospital.
Upon entering home health, I discovered I felt comfortable in these environments. I could assess patients, understand their situations, stay with them, and create tangible outcomes. I could also observe the improvements in the patients’ quality of life.
In the early stages of my home health career, I recognized the rapid aging of the senior population. In the U.S., someone turns 65 every eight seconds. There is a significant lack of connectivity in the community setting. Health system records were starting to be aggregated, but hospitals and physicians’ offices were not yet connected.
When we visited patients at home, we found no one was monitoring them, creating “massive data deserts.” We had little understanding of patients’ situations when we weren’t in contact with them. This led us to consider what information we needed about patients in advance—what might happen to them before it does—and how we could intervene effectively.
New Day was established to revolutionize home care by embracing change in a landscape with increasing emphasis on Medicare Advantage (MA). As payers and treatment modalities shifted, we recognized that even with more than 22 to 25 years in the industry, we still faced a disconnect. There was a significant gap in data collection and analysis.
To address this, we developed a system called Carelytics. This system integrates data from electronic medical records (EMRs), patient records and payer systems nationwide. We aggregate this data to reassess patients, allowing us to gain insights not only during our interactions but also while they are at home. We recognize the challenge of the “data desert” and are actively working to bridge this gap.
Currently, we monitor approximately 200,000 patients daily, including a new patient census of about 12,500. Notably, around 180,000 patients are not using our services; they remain at home, where significant events may occur without any oversight. Our goal is to identify and address these issues through our program, truly making a difference in their lives.
What key public policy changes do you foresee impacting the home-based care industry in the coming year?
It’s crucial to address a topic that’s been making headlines: the Department of Government Efficiency (DOGE). It will be interesting to see what they choose to tackle in the health care sector, particularly regarding issues like block grants for Medicaid. We’re observing this closely, as it could be detrimental to the industry. Nevertheless, we have great confidence in the value that home care provides.
Home care consistently delivers the best quality outcomes and patient satisfaction because people prefer to remain in their own homes. Additionally, it is the most cost-effective option. On average, it costs about $50 a day to care for a patient at home, compared to approximately $480 a day for care in a nursing home.
I remember working for a gentleman years ago who owned both a nursing home and a home health agency. He made a compelling case for home health, stating, “Nobody wakes up in the morning and says, ‘I can’t wait to go to the nursing home.’” While nursing homes provide excellent care for individuals in that stage of life, the longer we can keep patients in their homes, the happier they tend to be. This represents a strong value proposition in the current political climate.
Washington generally agrees with this perspective. Bill Dombi, the former president of the National Association for Home Care and Hospice, has been one of the biggest advocates for home care over the last 40 years. He recently joined our board as an advisor. Bill expressed his desire to be part of something larger than himself and to contribute to an initiative that positively impacts the industry. Having him involved in monitoring developments in Washington is important to us as an organization.
How can public policy facilitate the integration of new technologies in home-based care while ensuring patient safety and quality of care?
To attract younger workers, we need to become more technologically savvy. As artificial intelligence (AI) continues to develop, it’s crucial that we harness its potential for improving efficiency—not just within our industry but also in public policy. Administrative functions should recognize this efficiency; we should focus on technology that enhances patient outcomes and fosters real connectivity. This means keeping patients out of the hospital, helping them remain at home, and reducing fall risks. These advancements will significantly contribute to longitudinal care, which involves looking after patients over the long term rather than just during isolated incidents when they face health issues.
Typically, we see patients when they are discharged from the hospital, during doctor visits when problems arise or when they experience the progression of chronic diseases. However, we need to focus on what happens with patients when they are not under our care. For instance, we should monitor whether patients are taking their medications or moving around as they should in their homes. Enabling and financially supporting these measures is essential. During COVID, the push for telemedicine proved a sensible solution, underscoring the importance of managing patient care even when they are not directly with us.
What are the most prominent challenges organizations face in today’s regulatory environment? How might these challenges impact a home care organization’s financial outlook?
The administrative burden and regulatory oversight in home care are substantial. This burden is costly, and we often face unfunded mandates, new audits, and additional rules that the federal government does not compensate us for despite the increasing requirements.
We need to review the existing administrative rules and oversight. DOGE is questioning the necessity of multiple layers of oversight. While we firmly advocate for patient care and welcome all clinical oversight, the excessive administrative functions and rules create redundancies at the local, state and federal levels. This redundancy has a significant financial impact on organizations.
How can organizations like yours foster a culture of continuous improvement and innovation in response to changing political landscapes?
The first thing to note about home care is the incredible commitment of the people involved. It’s the most dedicated group I’ve ever encountered. When a problem arises, a solution is quickly found by those within the business—those who work tirelessly to deliver care directly to patients.
We focus on various aspects, using data from multiple sources and integrating that information. We engage in predictive analytics and pattern analysis to identify patients, enabling us to keep them at home for an average of 806 days longer when our program is fully deployed.
These technological advancements empower the industry, and our organization plays a crucial role by supporting caregivers and staff at the bedside. I often tell investors—many of whom have successfully run companies ranging from $5 million to over a billion dollars—that one truly understands our work only by witnessing the emotional moments at a bedside when a patient takes their last breath.
By leveraging technology to enhance efficiency in processing administrative tasks and payments, we can identify patients more quickly. This allows us to increase our workforce on the ground, ensuring more caregivers are present at the bedside, which ultimately leads to a better understanding of our mission.
What role does innovation play in shaping initiatives within organizations like yours?
Innovation plays a crucial role in addressing [the caregiver shortage as the population ages]. It involves improving efficiency, streamlining back-office processes, identifying patient needs more quickly and enhancing scheduling and information flow to our caregivers. These improvements enable caregivers to work more effectively and ensure that the right level of expertise is applied to each case.
Innovation is essential to truly caring for our patient population. We must think creatively and be willing to discard outdated practices. After 30 years in this business, I had to reassess everything I knew and consider how we could positively impact the future. Our team has also embraced this need for change. Without innovation, we risk falling behind.
However, it is essential to remember that regardless of how much technology we adopt, the foundation of health care relies on the connection between a nurse, a therapist, a caregiver and a patient in the personal setting of their home. We provide personal care, such as bathing, which demonstrates the profound level of trust and intimacy involved in our work. If we cannot place qualified professionals in these roles, we will encounter significant challenges in delivering care.
While technology and telemonitoring have their place, they cannot replace the essential human connection required in health care. I have been present for many final moments in people’s lives, and those experiences underscore the importance of personal relationships and the human touch in care. We must leverage technology and innovation to ensure this critical human element remains intact.
How important is adaptability in shaping an organization’s strategic direction?
Before COVID, we discussed the shifts in the MA payer model and treatment approaches as that payer grew, albeit slowly. However, when COVID happened, and everyone stayed home, these programs saw a significant surge. We didn’t expect that 50% of the Medicare population in the U.S. would be using MA for several more years.
Currently, 56% of our patients are on MA. This shift has resulted in an entirely different operational and business model in the home health sector, which is why we established New Day—to tackle these challenges.
The focus is now on remote monitoring and innovative care models. As the landscape changes—both within the payer system and the capital markets, where interest rates have risen—we have also seen aggressive mergers and acquisitions that have driven up valuations. This has sometimes resulted in excessive spending on company acquisitions, which can lead to vulnerability when interest rates rise and debt service becomes more burdensome.
Many agencies that were too focused on consolidating companies without monitoring these market shifts have now found themselves in challenging situations. They have limited options for cost-cutting, often resorting to reducing innovation and education, with patient care being the last aspect to be impacted. Unfortunately, innovation has struggled during these tougher times, especially with reimbursement challenges in place.
To remain competitive, it is essential to pay attention to the shifting landscape, stay globally engaged in the market and adapt to these changes. If your strategies were successful in 2019 and you believed you could replicate past successes based on prior experience, you may have found yourself in a precarious position by 2020, when the market changed dramatically. I know of several businesses that faced this challenge because they failed to adapt. It’s crucial to recognize these shifts and respond effectively, which is exactly what we are doing.
What are the top three priorities that New Day is focusing on for 2025?
As a company, we remain dedicated to enhancing our data system, Carelytics. Our aim is to ensure that we can intake data from any source, irrespective of the transaction system or EMR in use. We will assimilate that data, re-slice it and allow individuals to stay within their local environments to continue their work.
We are also extending our footprint in areas where we do not currently have full continuum services and are beginning to acquire companies in those regions. We are in a strong capital position. Fortunately, we didn’t find ourselves in a financial bind because we have been carefully rethinking our strategies. This allows us to be in a very good financial position to buy companies and expand our reach.
The third area of focus, which is actually our top priority, is workforce development—specifically recruiting, retention and fostering a strong culture. Culture is everything for us. Every day, when we turn on our computers, we look at our purpose statement and concentrate on patient care.
If we prioritize patient care and support our staff, we can achieve our goals. All the other aspects can be managed with the help of MBAs, bankers and investment professionals. By keeping our attention on our patients and the people who care for them, we remain attuned to the evolving landscape in front of us. Therefore, workforce development is critical for our success.
What worries you the most about the home-based care industry?
I pray that I make decisions based on wisdom and discernment that will benefit our people. I understand that if I make a mistake, it could jeopardize the jobs of 8,000 individuals. That’s what I truly focus on in my prayers. I don’t worry about the outcome, as I trust that will be fine. My priority is to ensure that the people caring for our patients are happy, engaged and want to be here; that desire is crucial for our culture and, ultimately, for our patients.
Earlier this week, during a team call with senior leaders, I emphasized that our primary job is to enable our staff to come to work. For instance, in the Midwest, where we have locations, we often face challenging weather conditions, such as snow and ice. I said, “Tomorrow morning, when the snow and ice hit in Kansas, consider who will be getting up, getting in their cars, leaving earlier than usual and figuring out what to do with their kids because school is canceled.” It’s our staff who show up for the patients.
If we don’t empower our team to do this and instead spend our money on mahogany boardrooms and unnecessary infrastructure, we miss the mark. I may be known for hiring only a few exceptional people, but I do so intentionally and compensate them well. Every dollar that isn’t going toward extravagant offices is directed toward patient care. It’s vital for us to show up when the roads are covered with snow, when it’s icy, when it’s cold or even when hurricanes are approaching. We’re the lifeline for our patients, and often, we’re the only support these individuals see. It’s critical that we are there for them.
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