Merchants of Hope

Merchants of Hope

HEALTH CARE by The Review staff

Providing death with dignity on the Gulf Coast is big business. It requires big-thinking executives.

A hospice house, where terminally ill people live the last few days of their life in whatever comfort possible, doesn't necessarily conjure up images of tough businesswomen navigating the minefields of corporate challenges, from meeting payroll to recruiting and retaining employees.

After all, the concept of hospice care was created by an Anglican nurse in a London hospital in the late 1960s to provide special care for the ward's sickly and dying patients.

But hospice care on the Gulf Coast is a business, a big business. The three largest hospices in the region, all of which are registered nonprofit institutions, combined to produce revenues of more than $275 million in 2007, when the trio treated a whopping 21,380 patients.

The hospices - Hope of Southwest Florida in Fort Myers, Tidewell Hospice and Palliative Care in Sarasota and Bradenton and Hospice of the Florida Suncoast in Clearwater - have nearly 3,000 employees, from nurses to doctors to administrative staff. Each operation also has hundreds volunteers.

And finally, the chief executives of the respective hospices control budgets of at least $80 million a year and each earn an annual salary of at least $225,000 before bonuses, according to IRS filings.

Big business, indeed.

So big, that running a hospice isn't only about following through with a mission statement of death with dignity. The three CEOs of the Gulf Coast's largest hospices have discovered over the last five years, which have been a boom of sorts for the field nationwide, that it's also about running a widespread, multi-location business with a client base that, at first, likely wants nothing to do with the service. And then there's the dizzying amount of government regulations and hurdles.

Other business challenges abound in the hospice industry, many of which are familiar to executives and entrepreneurs in the for-profit world. Still, many hospice employees look at their field as a true calling because of the connection they get to make with patients and their families.

"This is probably the most rewarding experience in all my years of health care," says Marge Maisto, the president and CEO of Tidewell, who previously worked in executive positions with a community hospital in New Jersey. "This is health care as it should be."

HOPE HOSPICE

Hoping to grow

When Samira Beckwith arrived in Fort Myers from North Dakota in 1991, Hope of Southwest Florida wasn't exactly practicing health care as it should be. In fact, the facility was in such dire financial straits that it couldn't even make payroll.

"Do you think we ever could have 100 patients a day?" the board asked Beckwith when they hired her to be president and CEO of the nonprofit hospice organization in Fort Myers. "They also didn't tell me they had no money," she says, chuckling.

Beckwith now presides over an organization that helps 1,100 patients on any given day and has an $85 million budget. She has built one of the nation's leading hospice organizations by building three residential hospice facilities in Lee County and expanding into other businesses and geographic areas.

Although Beckwith runs a nonprofit, business leaders in Fort Myers argue she's one of the region's most gifted entrepreneurs. She manages 800 employees and 900 volunteers and raises millions of dollars from donors every year. She's been politically well connected in Tallahassee and Washington D.C. ever since she became involved in helping to craft legislation that permitted Medicare to pay for hospice services in 1982.

Beneath the pleasant and soft-spoken manner, those who know Beckwith say she is a tough-as-nails negotiator with vendors and runs the nonprofit as if it was her personal business. "There's no middle ground when it comes to providing for her patients," says Charles Idelson, Hope's board chairman and president and CEO of Investors' Security Trust, a Fort Myers-based trust and investment management.

Beckwith concedes as much. "My sisters will tell you I was bossy when I was five [years old]," she laughs.

Beckwith says her passion comes from her personal battle with cancer, which she successfully beat in her 20s. But she also hails from a Palestinian refugee family that faced adversity to reach the United States, arriving in Columbus, Ohio, with one suitcase when Beckwith was just four years old. "Mom and Dad believed in the American Dream, responsibility and accountability," she says.

A change process

Those two experiences formed her passion for the care of patients at the end of life and her entrepreneurial drive, a combination that has propelled Hope. "I'm a social entrepreneur," she says.

When Beckwith arrived in Fort Myers to lead Hope in 1991, she immediately tackled the problems that were plaguing the organization. She met with vendors and persuaded them to slash their bills. She started providing services such as pain-management instead of contracting those out because they were less expensive. She created Hope's own pharmacy to lower drug costs.

"We're always looking at doing something better," she says. "Change is a process and not an event," she always reminds employees.

She also visited with doctors to allay their concerns that Hope wouldn't be skimming their terminally ill patients. Hope doctors "will make a home visit when you can't," she told concerned doctors. This boosted the number of patients and generated much-needed revenues to get the nonprofit back on its feet.

Beckwith also boosted fundraising efforts and spoke to every civic group she could. Her first effort was a $2-million residential hospice facility in Fort Myers, which was completed in 1995, just four years after she arrived. "Smart people understand issues when they're explained well," she says. Fundraising success comes down to this: "You need a mission that people can believe in."

Hope recently embarked on a $5 million campaign to build a hospice facility in Lehigh Acres in northeastern Lee County, one of the areas hardest hit by the residential real estate downturn. "We are concerned about the economy," Beckwith says, but she notes that a dignified death affects everyone and she's confident that donors will continue to give for that reason.

Beckwith says she's not distracted by the need to fundraise. In fact, she seems to relish the mission and keeps up a furious pace of charity dinners and community events.

In addition to providing services for patients at the end of life, Hope is expanding into other areas. For example, it recently launched Hope Select Care, a program that provides home-health care for the frail elderly, covered by Medicare. It's only the second such program in the state and the 35th in the country.

But not all of Beckwith's diversification efforts have succeeded. For example, Hope attempted to offer funeral services in 2006 but faced a backlash from funeral-home directors who were worried about competition. Beckwith says Hope could have offered funeral services such as caskets for 20% less than funeral homes. "We didn't have to make the same margins [as funeral homes]," she says.

What's more, the possibility of moving into the funeral business wasn't well received by some of Beckwith's peers north of Fort Myers, mostly because of its perceived distastefulness. "It's not anything we are considering or would ever consider," says Tidewell spokesman David Glaser.

And although Hope has expanded into other areas, such as Polk and Highlands counties, the organization lost a bid to provide services in Collier County to a for-profit rival.

All this growth hasn't diluted the organization's sense of mission, Beckwith says. Her formula is simple: "The more great people you have, the more you attract others."

TIDEWELL HOSPICE

Business basics

The attraction for Marge Maisto to leave her position as a top administrator at a community hospital in New Jersey in 2000 for Tidewell was a total health care call. A registered nurse by trade, Maisto wanted to be involved in health care at a sensitive time in people's lives - when quality care is of the utmost importance.

Growing the Sarasota-based hospice, then called Hospice of Southwest Florida, wasn't initially part of her plan. And it wasn't necessarily a mission of the board of directors who hired her. "Our target is to see all the people who need us," says Maisto. "And that's a hard number to quantify."

Maisto began to quantify it by using some basic business philosophies. In 2000, when the facility saw about 4,000 patients a year, Maisto implemented service area units, creating mini-businesses under the entire organization.

For example, she started with a long-term care unit and hired or moved managers there, to deal specifically with issues that arise in long-term care facilities where hospice services are needed. She soon created other service units, such as ones for assisted living facilities, home heath care operations and hospitals.

As Maisto grew into the job, one statistic stood out: Less than half of the patients treated by Tidwell were cancer sufferers, the types of patients the staff was best equipped to work with. Instead, the majority of patients had a variety of non-cancer ailments, such as cognitive heart failure and other cardiac-related issues.

So Maisto began focusing on that side of hospice care, recruiting doctors and training and retraining the employees and volunteers to grow that unit.

Nursing specialty

Those programs coincided with the growth boom at the hospice, which changed its name to Tidewell in 2005. Of course, one key reason that Tidewell and the other hospices on the Gulf Coast have grown so much is sheer demographics.

The population of Pinellas County, for example, has traditionally had one of the highest average ages in Florida and as such, Clearwater-based Hospice of the Florida Suncoast in is one of the largest hospices in Florida, not just the Gulf Coast.

But Maisto seized on the demographics as a way to expand Tidewell's services to more people, a natural follow up to the programs she helped build. Tidwell, which operates in Sarasota, Manatee, DeSoto and Charlotte counties, has opened a pair of new hospice houses the past two years, one in northern Charlotte County and another in central DeSoto County.

One challenge that Maisto and her hospice peers have faced through the growth is hiring, both recruiting and retention. "There's a specialty to being a hospice nurse," says Glaser, the Tidewell spokesman. "We do a lot of training."

But nurses are highly sought after nationwide to begin with, making recruiting even more challenging. Tidewell's human resources department has been charged with the task of constantly updating its efforts in the nursing department. One perk it now provides is a sizeable bonus to every nurse on his or her even-year anniversary.

The final piece to the growth puzzle at Tidwell has been a marketing campaign, for both fundraising efforts and getting its mission out to the communities it serves. Marketing the business of dying, even dying with dignity, is a significant challenge.

"We can do as much marketing as we want," says Glaser, "but word of mouth is what defeats the mindset that this is a service that nobody wants."

SUNCOAST

'Surviving grief'

Meanwhile, Hospice of the Florida Suncoast, the largest of the trio of large Gulf Coast non-profit hospices by nearly every statistical measurement, is still growing, too. It's growing through new admissions, new products and new services.

"We want to be patients and families' one-stop shop," says Mary Labyak, Suncoast's president and chief executive officer. "Many people are struggling with issues. There is loss and decision making for parents. A lot of our growth has been in new services."

Suncoast has a number of new services, including one for stillborn babies and their caregivers; AIDS prevention, treatment and living with AIDS; and a program for children living with long-term chronic illness.

There are also programs for the survivors of suicide, homicide and violent death, such as a war.

"We help them survive their grief, grow and evolve," Labyak says.

In the future, Labyak expects technology and demographic changes to continue to shape growth and services. For example, video conferencing can connect a terminally ill dad with his children around the country.

"We will be reinventing ourselves," she says. "We remain interested in how technology can be used to help people."

Some of the new programs ended up not working, and those were among the mistakes Labyak learned from.

"We started down some paths with services and programs we though were genius, but they were not," Labyak says. "I would love to have known 25 years ago what I know now. Before, there were no books, no conferences."

The variety of programs is what sets Suncoast apart from its competitors, Labyak says, and it will continue to review and update those programs as the market and technology change.

"The scope of programs are much broader than other hospices," she says. "I think we are probably most obsessed with the caring sanctuary. Ultimately, our job is to change the context of dying in this community."

Mission focus

Labyak, describes her main challenge this way: balancing a caring sanctuary and a sound business. She employs about 1,500 people, has 3,000 volunteers and projects revenues of $137 million this year.

"We're always balancing being an organization that is meeting people's needs and running this as an impeccably managed business," Labyak says. "With care, you're working on how to individualize it for every person, figuring out what people want from us as demographics change."

What do hospice customers want? Very comprehensive, very individual care, she says.

"We're about transforming lives, transforming families' lives," Labyak says. "Sometimes there can be very scarce resources. It wouldn't be surprising to see a federal funding cut. The economy also affects fundraising."

While most hospices, are nonprofit, some for-profit chains have emerged and some of those have followed the demographic trends to Florida, in places such as Dade and Broward counties and Orlando. Those companies include Manorcare, Odyssey HealthCare and Vitas.

Labyak knows those companies could try to move into the Gulf Coast one day, especially if state regulations are relaxed (see related story).

Either way, her priorities won't change. She still plans to run the hospice like a well-managed business and focus on the mission.

"I've been here for 27 years, and we've always run as a business and take that very seriously," Labyak says. "We're supported by the public's money. We owe that to the public."

State system keeps check on hospice expansion

Florida is in the minority when it comes to regulations on hospice facilities by limiting numbers and geographic areas. Most states do not place limits on entities opening new hospices. The city of Nashville, for example, has 18.

Instead, Florida utilizes a certificate of need process. Essentially, a hospice needs to apply with the state to expand or open a new hospice.

Bills in the state Legislature to change the process, what some consider to be a state-sponsored monopoly, have failed.

While many see this as a regulated monopoly, similar to utilities, defenders say it helps insure quality and comprehensive care for patients and families because hospices are spending money on care, not on marketing or branding to beat the competition.

While competition in other areas seems to improve services, whether it is education or hospitals, those in non-profit hospice care see competition as the wrong avenue.

Competition in Florida would complicate the marketplace at a time when people need simplicity, says Marge Maisto, president and chief executive officer of Tidewell Hospice and Palliative Care in Sarasota.

"We believe we serve a population that doesn't have a lot of time to make a decision," Maisto says. "I think it's a good system. It's a way to safeguard the public."

Samira Beckwith, president and chief executive officer of Hope of Southwest Florida in Fort Myers, says the process assures there won't be a hospice "on every corner." That, in turn, maintains patient quality, she argues.

GULF COAST HOSPICES

Hope of Southwest Florida

Year Revenues % Growth

2005 $61.7 million

2006 $62.1 million 1%

2007 $77.9 million 25%

Patients and families served

2005 6,795

2006 6,863

2007 7,326

Employees

2005 488

2006 576

2007 705

Source: Hope of Southwest Florida

Tidewell Hospice

and Palliative Care, Sarasota

Year Revenues % Growth

2005 $51.5 million

2006 $58.3 million 13%

2007 $72.5 million 24%

Patients and families served

2005 5,858

2006 6,234

2007 6,853

Employees

2005 421

2006 544

2007 665

Source: Tidewell Hospice

Hospice of the Suncoast, Clearwater

Year Revenues % Growth

2005 $93 million

2006 $115 million 24%

2007 $130 million 13%

Patients and families served

2005 5,100

2006 6,200

2007 7,200

Employees

2005 1250

2006 1350

2007 1500

Source: Hospice of the Suncoast

REVIEW SUMMARY

Businesses. Hope of Southwest Florida, Fort Myers; Tidewell Hospice and Palliative Care, Sarasota; Hospice of the Florida Suncoast, Clearwater.

Industry. Hospice, health care

Key. Executives of the Gulf Coast biggest hospices face many of the same business challenges as their for-profit brethren.