In today’s home health care market, it is not unusual to hear about a company going out of business. It is less notable to hear about a company that has come back from the brink of failure. But that is the story of Arcadian Healthcare Inc. In just 2 years, the Cranford, NJ-headquartered company has rebounded and turned from a path of failure onto the road to success. This turnaround is due primarily to the efforts of Arcadian’s president and CEO, Gayle Devin.

From the Brink of Failure
The result of the merger of several family-owned home health care companies in 1999, Arcadian was on rocky ground from the beginning. “There really was no plan how the various companies were going to roll together,” says Devin.

Before Devin joined Arcadian, the company had a poor reputation in the local market due to the lack of a consolidation plan, the failure to create an effective operational infrastructure, and the inability to exploit the various niche markets unique to each acquisition. The company provides oxygen, wheelchairs, ventilator care, enteral therapy, beds, and other DME from offices in Cranford, NJ; Brooklyn, Lakewood, and Voorhees, NY; and Milford, Del. The company was plagued by poor customer service that shrank its referral network, and led to low company morale.

Devin, a successful home health care entrepreneur from Chicago, joined Arcadian in its darkest days in November 2003—when rampant rumors had the company on the brink of closing. She did her own due diligence, which included a thorough examination of its financial health, and developed a business plan that would create a successful company. The company had numerous problems to overcome, and the goal would not be easy. “It’s easier to start up a company than turn one around,” says Devin. “But with the right business plan, [the entrepreneurs who started the company] saw great potential.”

Among the first things Devin did was look at all the service areas and eliminate those that were not profitable, among them apnea monitoring. “One of the main concerns [during my due diligence] was that the company tried to do everything for everyone,” says Devin.

Devin also developed a referral perception survey that she personally delivered to all current, past, and potential referral sources and insurance companies. The survey has 13 different categories including ease of referral, prompt delivery, after-hour response time, staff knowledge, and financial flexibility, which helped determine why referral sources sent or did not send patients to Arcadian. About 75% of the 500 who were asked to take the survey completed it.

The results showed that the three top problems with the company were that it was difficult to refer patients to Arcadian, service was too slow, and staff knowledge was subpar. According to Devin, the survey (administered in late 2003) helped to solidify her business plan and focus on the problem: customer service.

Addressing Concerns
Devin knows that the product Arcadian delivers is not really oxygen or wheelchairs or any of the other supplies in its catalog. “It’s the same equipment as that of our competitors,” she says. “The question was how are we really going to create benefits to the service package?”

To ease the referral process, Devin redesigned the fax referral form and speeded the turnaround time. Within 30 minutes, Arcadian customer service representatives return the form to the referral source.

To improve the response time of its technicians in the field, Devin pulled out a piece of technology from her days in Chicago—a real-time vehicle monitoring system that allows for more efficient routing and timing of calls. Using this tool, Devin and the other office managers can keep tabs on technicians and ensure that they are taking adequate time to deliver, assemble, and educate patients about their equipment. It also allows the efficient use of time to include preventive maintenance. This has allowed most service calls to have a 2-hour turnaround time for new oxygen patient setups and quick response time for equipment malfunctions.

Devin and company executives instituted an Internet-based quarterly newsletter (at www.respiratory.com) for current referrals, patients, and other members of the health care community.

But it is not just the technicians in the field who have become more efficient. Customer service representatives are now armed with a high-tech phone system that has made them nearly 98% efficient in handling service calls. “My pet peeve is to be on hold,” says Devin, so she invested in a phone system that monitors the time customers are on hold, and has a lost call feature that sends a message to the customer service supervisor and requires a call back to that number within 15 minutes.

Ellen Magenheim, manager of Arcadian’s patient service division, says that the phone queue is designed for patients to get through to a customer service representative. It monitors phones in a free state—sending calls to that phone immediately—those in a busy state, and those wrapping up a call.

Customer service representatives have 30 seconds after a call ends to make any additional notes to a patient record before they reenter the phone queue. “Our mantra is the patient first, and first do no harm,” says Magenheim. “We aim to make patients feel like we’ve been waiting for their call all day.”

The record system is such that it does not matter whom the patient or referral source is speaking with. All notes are time- and date-stamped, with notes reflecting the last person that caller spoke with. The customer services representatives also have copies of the field technicians’ daily routes to facilitate immediate service calls.

When a call is abandoned, often it is hung up due to an emergency—the typical scenario is the doctor who receives a page—and Magenheim or another supervisor will call up and the startled physician or patient will happily continue the call that had been interrupted. In 2003, the abandoned call rate was between 16% and 20%. Today it is less than 2% and includes hang-ups from both customers and branch offices. The six customer service representatives field about 4,000 calls a month.

Back to the Base
Finally, Devin instituted a variety of ways for staff members to build their knowledge base and, as a consequence, be better able to help referral sources and patients. Whole company staff meetings are held every other month. For those who cannot attend, a transcript is placed on the company intranet. Each of the company’s five branches also has a meeting once a month as well—down from twice a week during the dark days of 2003.

Devin, by her own admission, likes reports and has developed a Performance Improvement Program, which measures 15 key indicators of the business and its performance. “We need to hear about the bad and the ugly, as well as the good,” she says. The results are shared with customers.

In addition to the Referral Perception Survey, which it has conducted yearly since 2003, the company has a survey for new patients, a survey upon discontinuation of service, and a quarterly survey of its ventilator patients (one of the few successful programs prior to Devin joining the company).

Devin, along with company executives, also instituted an Internet-based quarterly newsletter available at www.respiratory.com (an address the company has had since the earliest days of the Internet) for the health care community and current referrals; it provides company news, educates customers on different products and services, and includes information on reimbursement, manufacturer information, and other resources. Each issue also spotlights different Arcadian employees. “The response to the newsletter has been phenomenal,” says Devin.

Magenheim also conducts regular in-services with her staff, and says that this improvement of staff knowledge has transformed the staff from “order takers” to true customer service professionals able to “troubleshoot from the front end,” she says.

This has led to improvements with the referral sources, says Magenheim. “We [educate] them so it is a cleaner process, while building up the level of trust,” she says. Arcadian also works with its referrers during the discharge planning process, and acts as a resource to help referral sources and patients find providers for the services Arcadian does not provide.

Outsourcing: A Financial Disaster
When Devin came on board, Arcadian’s billing was handled by an outside company, which, according to her, was “very negative.” Among the problems with using an outside source was that the processing company had no experience with managed care contracts. Also, much of Arcadian’s business is Medicare-related and had no delineation as to the company’s role in processing the claims. As it was, the company simply processed the claims and did nothing further if the claim was rejected. “It really created further problems, and damaged the relationship with the referral source,” says Devin. Since reimbursement has been returned to Arcadian, cash flow has improved and interdepartmental cooperation has allowed these claims to have a higher qualification rate.

The company’s managed care contracts are with businesses that reflect the high customer service approach of Arcadian, having an emphasis on clinical care programs. Devin looks for ease of referral and quick turnaround in the insurance contracts that she pursues.

Communication
When Devin came on board, most of the employees “did not understand what they were doing and why,” she says. That changed with the numerous in-services and staff meetings she began to hold. Staff training focused on basic customer service and built from there. And, like the surveys and newsletters, Devin likes to tell it like it is. “Every employee needs to know [what’s going on in the company],” she says. “They may not like it, but they need to know why [you’re doing what you’re doing].”

Ultimately, getting back to basics and communicating with staff are the key ingredients in Devin’s recipe for success. “The key is to get a good staff of people who really love what they do…and continually look at what customers are saying,” she says. “Good service and people are the most important thing.”

Magenheim echoes Devin in her own thoughts about communication. “You need to focus on what needs to happen and what you can provide,” she says. “We’re trying to serve the whole patient.”

And what will ensure failure? Complacency. “That is a situation where no one wants to change,” she says. “You should never be complacent, and always be willing to improve.”

The measure of Devin’s success can be seen in the list of Arcadian’s major referral sources, which include Sloan-Kettering, New York University Hospital, and several large pulmonary groups in Staten Island. DP

C.A. Wolski is a contributing writer for Dealer/Provider.