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A Discussion with Bernie McGuinness of HMG Healthcare

Join Scott Tittle, host of Versed: A VIUM Capital Podcast, along with Bernie McGuinness, CEO of Majestic Care, as we hear about the incredibly innovative work Bernie and his team are doing to attract and retain high-quality staff during these very difficult times.

"We need to quantify the package to our care team members…and not just say that they're our mission and not just say, thank you, but show it."


Bernie McGuinness
CEO of Majestic Care

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Episode Transcription


Scott Tittle
Welcome to our podcast called Versed with Scott Tittle: A VIUM Capital Podcast, where we will be interviewing leaders in the long term care sector who are shaping the future of the profession. We've been discussing issues top of mind to them so our listeners can be even more well versed as they tackle their day. This podcast is powered by VIUM Capital, a new national financial services firm focused exclusively on providing capital solutions to the seniors housing and healthcare sectors. For more information, you can find us at ViumCapital.com. I'm your host, Scott Tittle. This is Versed.


Scott Tittle 
Well, I'd like to welcome Bernie McGuinness, the CEO of Majestic Care, to our first podcast. Bernie, welcome, you are our third guest.


Bernie McGuinness 
Oh, thank you for having me, Scott. It's a pleasure to be here.


Scott Tittle 
Well, it's our honor for sure. You know, we've known each other for a really long time and I was just thinking about all the various roles we've been in the sector back and forth for the last, you know, 15 years or so we've known each other. And we could go through all that history, but I guess for our listeners, maybe just give us a quick background on you and how you got into the sector, how you arrived at Majestic Care and then maybe a little bit about your company as well.


Bernie McGuinness
Well, I started in post acute care as a Certified Nursing Assistant in Yorktown, Indiana on the evening shift. I took my CNA class there. I had a nurse mentor when I was up at Ball State, for one of my summer jobs said, “Hey, you should look into this, try this out.” So I did, really loved it, and went back to that camp the next year. It was a camp for special needs run by the Easter Seal Society. And they said “You know what, you should keep pursuing this”. And I had no family in healthcare and just said, I love being a CNA. I loved what we were doing. I felt rewarded. 


I wanted to be a teacher and that reward was there, but I saw that healthcare would have a lot more avenues. And I pursued that, I became a nurse in Indiana. I switched over to Anderson and became a licensed nurse. Worked for a large national organization in a building that had some high turnover, and did my AIT there. Ran a building in Carmel, Indiana early on, and then joined a large growing provider in Indiana. Had about 18 buildings when I left.


When I left, I was Senior Vice President of Operations. They had 78 locations in one state. I'd helped them grow, brought on, you know, several buildings through acquisitions. And they had some changes at the top as an organization. It was time for me to find a new landing spot, and became the COO for a company that had seven buildings, bringing on five buildings into Indiana, they were in Illinois, and was COO for 12 facilities for a small regional provider for a couple years. And then, yeah, as many of us have, we sit around the water cooler, have a beer after work and we say, “You know, what? If I owned this company, here's what I’d do, here's what I do.” And I had had the pleasure to work with our current CFO and Co-Founder Don Comp in a previous life. And we had had maybe a few of those conversations. And that was really how we started to talk about what we do. We started a reimbursement consulting company and that led to some operational decisions on operational opportunities within the industry. And that's really how Majestic Care was formed. We found a board of directors, an investment group, an owner looking to get into the space, but really had no skilled nursing background on the day-to-day operations.  And to own a nursing home today and to get the financing for it, it is complicated. Ownership is complicated and it's expensive. And the line I use a lot with our care team members is “That's not quite how I roll”. So you know, so we needed that support to be able to live out the mission and vision and that water cooler talk that we had talked about for so many years. You have to have the financial resources to pour into a building, have the CapEx to pour into your care team members. So Majestic Care was formed in 2018 with four facilities in Indiana.


Today, we operate 27 skilled nursing facilities in three states, along with seven assisted livings. We operate another organization, consulting firm, Bluegrass Consulting Group. I am the CEO of that supports and consults on 10 individual centers throughout the commonwealth of Kentucky. So over the last, you know, almost four years, not quite four years, we've grown to an organization serving about 4,200 seniors throughout the Midwest. And employing right around the same number of care team members. Majestic Care's mission has always been to focus on our care team members, as those folks, those are the people who deliver the care. And if we can make sure they have the tools, the resources, the knowledge, and most importantly, the energy to do their job and answer the call that we're gonna provide the best care possible to those we are so honored to serve.


Scott Tittle
Well, Bernie, thanks for going through your background. You're perfectly well positioned to lead a company this size based on all the roles and responsibilities you've had and the various states you've worked in. And so really excited to have you on today. Now one of the things you talked about certainly was your care and respect and love for your teammates, your workforce. You know, that's what we want to talk about today really is your experience during COVID and some great work you're doing going forward to make sure you're retaining and attracting high quality staff. You know, throughout COVID, certainly our sector got hit incredibly hard. We're at lowest employment levels in 15 years. Lost about 15% of the total workforce. Tell us about Majestic’s experience for COVID and then maybe go ahead and blend into all the great work you're doing right now with your current team.


Bernie McGuinness
Yeah. I don't think Majestic's that much different from the impact that COVID had had, right? The industry was already struggling with recruiting and retaining talent. We already had deficiencies, especially in certain markets, and enough nurses to even fill the openings in which we had. COVID and the early resignation had really impacted us. Early on during the pandemic we thought, okay, maybe some people are really scared. I was scared, right? My family's scared. And, and so many of our staff members coming to work, they're dealing with those same things. Everything you heard on TV, am I gonna bring this home to my own family? What type of guilt do I have? Am I gonna die from getting it, right? Am I gonna give it to my kids or to the residents that I love and, you know, am I gonna cause harm? And we saw a lot of people leave. You know, they were scared. They hadn't been with us long as an organization. We were about 18 months old, you know, defining culture through multiple acquisitions. And, you know, I hear a lot about, well, the culture can help retain and help us recover from this. And I agree, culture's gonna matter very much to those care team members. But also, a lot of organizations in the size where you're at in that culture, that doesn't just happen by accident. Or it happened because we have a pretty logo, right? It happens because it's the day-to-day reinforcement of that culture. And one thing I noticed during COVID about culture was you couldn't get together anymore. We couldn't get people in the same room, break some bread together, talk. We had all these new leaders, new directors and nursing executive directors, consultant staff. And if you wanna talk about culture and living out our mission and vision, that's hard to do via zoom and via teams and those types of things. But at the building level, we were losing frontline staff. People were scared and it was a pretty typical experience for long term care. When you needed the most staff you had the least because normally our staff contracted COVID, they were asymptomatic carriers, you had an outbreak in your building. And when you had your first initial COVID outbreak in your building, you could have 10, 14 staff members who also tested positive and had to be off work. Well, you had to create a red unit, you had to create another nursing station. People couldn't cross-contaminate. You needed more staff than ever, and you were down 10 to 14 of your own staff members that you were worried about. We weren't the MBA. I say it all the time. We couldn't create a bubble. I couldn't rent out Disneyworld and put all our staff there. They had families to raise. They lived in the zinc communities. And it was just inevitable. The spread of COVID was going. If your county was red, there was a really high probability your nursing facility was gonna get hit with an outbreak. So we saw that. But as the pandemic drove on, I think a lot of the thought was, well, people will come back. People will come back. It just didn't happen. We were noticing it was only getting worse. More people were leaving. And as some other industries and sectors of employment started to see the climb back, skilled nursing has not seen that climb back. Whether it's because the great resignation and hospital RNs retired, they’re you know, they resigned, they're working part-time. I know our local hospital systems have hired more licensed practical nurses in hospitals that weren't hiring nurses at all prior to the pandemic. Well, that's really put a demand on those nurses and a real stressor on us from a staffing standpoint. So, we got together an executive team a little over a year ago and said, okay, instead of waiting for it to return, or beating our heads against the wall, what are we gonna do differently? We're not gonna just sit here and continue to struggle and fail and lose directors of nursing, cuz they're working 28 straight days on a cart. Or have residents with care concerns because we're really struggling to get staff in here and trying to manage these agencies. And I'm sure we can talk about that for hours, their price gouging, the lack of accountability from this staff, which really matters more to me than the price gouging. It's the fact that if I tell an agency I don't need a nurse tomorrow because she didn't pass these meds, didn't do this, didn't do that, I'm the one held accountable from the department of health and she works another shift in a competitor tomorrow. And we were just seeing those regulatory results start to happen in surveys pick back up. So we challenged ourselves.
 

One thing we said is that we're gonna go more data driven in our approach to recruiting. We had to make sure we had a good ATS software. We're looking at our data, who are we hiring? How long are they here? What is our turnaround time? Really trended out the way the skilled nursing sector has really been trending referral volume and admissions. For a long time, we had to expand our talent acquisition team. We had to get really defined whether it would be with sources who can really help us drive our interview conversion. You'd be surprised how many people you just call, you think they're gonna be at two o'clock today and they just don't show. That's a frustration and I hear it from other providers. I don't think that was Just a Majestic frustration. So how do we get more interviews in, how do we close those new hires? And then how do we retain them? Too much of our turnover happens in the first 90 days. So, we had to expand our efforts and get more analytical, but we really focused a lot on retention. And this is where I think there's a lot of different providers that are trying unique items. And this is one area I'm just so proud of the Majestic team. Because these ideas came from our leaders. They came from our executive team from our building leaders from our DLN’s. We have an awesome Vice President of Talent Acquisition who leads this effort. Our VP of HR is so passionate about our care team members and that retention. And they brought these ideas and we had to partner with some outside vendors to help us achieve all of this. But we launched what we call the Majestic Difference. And we say, you know what? We need to quantify the package to our care team members and let them know all the benefits we do. And not just say that they're our mission and not just say, thank you, but show it. How do we do this? So one thing that we've done I think is something most providers have done during the pandemic. You know, cuz I do believe most providers care so much about this topic and are trying to figure out a way in which we can staff. Contrary to Washington's belief, most operators are here to bring more staff in so we can deliver quality care. So we have seen our wages increased by over 22% in direct care.
 

We gave intentional raises out to our care team members. We moved to a weekly pay, which was really important to our frontline care team. And we focused a lot on those benefits right away. Let's bring our current staff up. Let's introduce a new wage model into the market and let's go to a weekly pay. From a healthcare standpoint, we went out, we said “Hey, during the renewal period, it's our job to eat this cost”. We offer a large national provider, healthcare plan, large network, high deductible, but not a meca plan, not a catastrophic plan, but a true health plan. For $15 a week you can insure yourself. And the rest of the burden is on Majestic. We give free telehealth, including free mental health, to all care team members and their immediate family. And that costs them $0. They just must enroll.


We have other benefits that we wanted to provide through a panda perks program as part of Majestic Difference. Panda is an outside vendor. Yoni works so hard for our account, finding different things. Melanie, our VP of HR, when we went into Michigan, she found out they don't like Starbucks, they like Bigbee coffee. How do we get them 15% off Bigbee? Well, all Majestic Care team members get 15% off this coffee. So we have discounts on scrubs, discounts on movie tickets, amusement parks, different things like that. And we said all that's great, but what are real benefits that we can do that I think stand out and are unique in the industry and make a difference in the lives of our care team members? Not just here's a perk, but here's a difference in life. And so we went with a perfect attendance bonus. In addition to the raise, if you show up for every shift you're scheduled, part-time or full time this week - you can be late once. Just please show up, don't call in. You make $5 more an hour. That's a significant benefit to make sure you're not calling in on Saturday or Sunday. Staffing is so tight and every facility I see is kind of patch working a quilt of staffing going into the weekend. This nurse manager's picking up here, they're doing this. I've got agency to cover here. I've got Sally on night shift, she’s gonna work a double here and do this and our schedule is filled, but you have a call in for a 12 hour shift or for a double on a Saturday evening or a Sunday. There's no bench anymore to call upon. And that, that was the difference. So how did we detour those call-ins? How do we think of this core staff that keeps coming back every day, and do pick-up the shifts and doesn't call in, and reward them in a positive way versus just punitive nature through an attendance policy.


Bernie McGuinness
And we put in the Majestic Difference for the attendance bonus. I believe, you know, for a frontline care team member that can be an extra $800 a month just to work your basic shifts. In addition, we launched a free cell phone as part of the Majestic Difference. For all full-time care team members, they get a free Android Google smartphone on the T-Mobile network, unlimited text, talk and data. No more pre prepaid phones, you know, burner phones, changing their phone number, not being able to get it, limited minutes, limited data. They won't return the scheduler's call. Everybody has a full time phone number. We know it works. We pay the bill. We have a way that we can get them the app on their benefits. They can see their pay stub. They can sign up on the electronic scheduling system. They can pick up extra shifts. We can communicate directly with them in return. They can have their Facebook and Instagram and do whatever they want and communicate with the world, which is so important. Everyone has a smartphone. Everyone wants to stay connected and we're trying to provide that service for them. In our urban markets, we've launched a housing discount. We've worked with, but we don't own these apartments. I think that's a common misconception. We have gone out and worked with different apartment complexes and different groups in our markets and said “Hey, here's how many people we employ in your market. If we worked with you and they had steady employment with us and signed a 12 month lease, would you be willing to do discounts?”. And we're at a 20% discount on housing in major urban markets, as long as they're a care team member at Majestic Care, 20% off their rent. So I use the example of Columbus, Ohio. Ohio's a great example for us. It's one of the first places we launched. CNAs go from making about $13.50 to $15 bucks an hour. They're making an extra $1.50 an hour on a weekly basis, right? They're making an extra $60. You're making extra $240 a month just on base wage a month. You aren’t paying for housing or a cell phone or something out of that. Now you show up to work every shift, you make an extra $800. A one bedroom apartment with our Columbus partner is $714 a month. With a majestic difference it's $570. I pay for your cell phone, that should pay for your utilities in that one bedroom apartment and should give you enough money that you can afford to insure yourself with adequate healthcare coverage for $15 a week, all through the Majestic Difference and still have your base rate, plus that extra couple hundred dollars to live your life and impact your financial situation, raise your family. I remember, you know, being a brand new LPN, making $13.50 an hour with two children under $13 and it's tough, right? And how our staff do it and the resiliency they have and come back in and take care of our residents. It's a physically demanding job. It's an emotionally draining position. And I don't think we talk about that impact. So we also give 'em free telehealth access, mental health. They can access it on their phone. That app is preloaded in the Majestic mobile, where all they have to do is schedule an appointment. Your kid has an ear infection, you don't have to take all four kids out to the minute clinic at 10 o'clock at night. You can talk to a nurse practitioner on the phone we pay for, get that amoxicillin called into Meiers and go pick it up. You can talk about your own issues that you're having. Some of those struggles that I think so many Americans are facing in this post-pandemic world, that loneliness, the struggles you have, and have access to talk to someone at no cost. So we're trying to find these types of benefits that invest back in our care team, Scott.
 

Scott Tittle
I think for our listeners and viewers, you can tell why I was so excited Bernie on today, because the passion upon which you brought your leadership there at Majestic Care is just incredible. And the creative work that you've done to try and attract and retain great people, I think is probably gonna go a long way. And so say a little bit about, have you had the Majestic Difference plan in long enough to see some returns on retention rates already? I mean, how's that worked?
 

Bernie McGuinness
We have. You know, we launched the Majestic Difference in October and November, depending on the market and when we could get some payrolls aligned in different items. And I don't think we saw the immediate impact. We saw the difference in the number of applicants right away, being able to advertise it. But that holiday time frame did not help us I think in closing. It's a difficult time for people to change. What we've seen though is the first quarter, drastic impact on our operations. We took on some buildings in the middle of December in Toledo, Skilled Nursing News did an article on that. And by February 6th, a building that had been an agency, an 85 bed SNF with 40 bed Al attached, they'd been an agency for over two years. They've been agency free since February 6th and remain agency free. Actually the entire state of Ohio (except for our most recent acquisition, we bought a building on April 11th) we own 5 other facilities. And those 5 facilities we’re using in the fourth quarter of 21 about $850,000 a month of agency staffing, Scott. The second quarter, those buildings are gonna be using one building that has a nursing agency in it in Columbus. And they've reduced, they're down below $50,000 a month in agency nursing staffing and the rest of Ohio is agency free.
 

Scott Tittle
Now those are real dollars, Bernie. Those are real dollars you can pour back into the building, pour back into the current staffing model. I mean that’s a real change for sure. 
 

Bernie McGuinness
About 50% of those dollars pour right back into the operations of the building. We're not paying them to a staffing agency. They're paying for those increased wages. They're paying for the Majestic Difference. You know, they're helping these facilities recover from low occupancy and be operationally successful. Again, we've seen this impact in our indie market. We inherited two buildings from a large national provider last July. As of today, those buildings are agency free and have grown census by 50 ADC in the last nine months. So we didn't just halt admissions to, to reduce agency. We've been able to grow census and eliminate agency in these facilities and stay agency free in these buildings for at least 60 or 90 days. Trust me, we still have pockets of agency. We're still running as an organization, quite a lot, but we've reduced it by about 40% over the first four months of this year. And I would say you have to contribute that to the Majestic Difference.
 

Our ability to retain, our retention rates are much better. You know, we look at 'em on a quarterly basis, but our applications and our new hires have really increased. We also have this new incentive leadership, Scott, we have retention bonuses for our key leaders, directors of nursing, EDS, HR directors, MBS positions. Because if you can stabilize that leadership, you know so well at a local level, at that facility level, people don't come work there because they saw me on this podcast. They work there because they have that relationship with the DoN or that executive director or that unit manager. And how do we take this focus of retention and reward our key leaders who answer the call every day and then arm them with the tools to go out and recruit more staff?
 

Scott Tittle
You know, Bernie, thanks for going into that additional approach to your senior leadership teams. I know that that certainly matters. You know my former boss, Governor Mark Parkinson, in his Presidency of AHCA/NCAL has often said that we'll get through this labor crisis. But those that will do the best with the ones that solve this at the local level, and that leadership will rise to the top and where operators then become the employer of choice in their market. Not only amongst the sector, but among other sectors as well. And I think again, for our listeners and viewers, I think you can see why I'm so excited to have Bernie on here, because he's leading the way here through his team there. So having said that, one more question I had for you is certainly Present Biden. His administration has recently put out a nursing home reform proposal. And one of those components is a proposal for a federal national minimum staffing ratio or model. What do you think about that approach and what do you think that that may do to your operations going forward? Should it go into place?z
 

Bernie McGuinness
Well, Scott, I mean I'm trying to be a little more concise here. I wish the administration would quit trying to grab headlines and start being collaborative with the sector. There can be no mandates or regulations that don't come with real solutions. Some of those solutions are funding for these mandates, defining what the caregiver is, defining the definition of direct care for consistency. Looking at some of the states who are backing up some mandates with different funding, whether it's Illinois or looking at maybe the New York approach, what will be good or what will be bad looking at Florida's expanded definition of direct care in different departments, looking at how we bring in that non-certified caregiver into our world and support that. And then training, whether it's through immigration, letting more nurses in, funding, student loan forgiveness is a hot topic. Well, why aren't we talking about nurses? How do we look at trade schools versus just electricians and plumbers and carpenters and that type of career path? How do we get that CNA, that person who wants to be a caregiver during that senior year of high school, and look at vocational, that LPN path right away through state funded initiatives. I think there's so many ways to be creative at local levels. And I wish the government, instead of driving a headline of we're gonna be punitive in our approach, would just sit down and be more collaborative. Cuz the people I meet in this industry, Scott and have met over the last, you know, 26 years. These are people who care and we've invested our entire, I've done this since I was 19 years old. I've invested my entire life in long term care to make an impact on the residents that I'm so honored to serve. And to adapt and change in today's workforce is gonna require one, funding that matches the mandates and two, a collaborative approach. Not just a headline grabbing punitive approach to make nursing homes the punching bag again. You know, now that the pandemic is dying down. But to really get back to the light that was shined on the nursing home industry during the pandemic. We are a large part of the healthcare in our local communities. And how are we gonna support the nursing home industry, not punish the nursing home industry? Because the staffing challenges we face aren't because of who owns your building or are you for profit or no, not for profit. They are real issues that all of us face and we're only gonna solve them if we can have real communication together.
 

Scott Tittle
Well, Bernie, thank you so much for being on our podcast today. I think hopefully, again for our listeners, you can see what leadership can do when it isn't restrained by unfunded mandates and when you can have leaders like yourself, get out of the market, and really make a difference in people's lives. Not only for your residents but also for your staff.
 

So, Bernie, I can't thank you enough for joining us today and for our listeners for joining us for our third episode here. Please stay tuned next time when we're gonna be attacking the Biden proposal from different angles. Whether it’s from the folks in private equity or the value-based purchasing program idea. So Bernie thanks again. This is Versed.

Listen to Episode 3!

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