Ignite Medical Resorts

This is VERSED, powered by VIUM Capital, the podcast that brings you conversations with the leaders driving change in seniors housing and healthcare. I’m your host, Steve Kennedy, and together we’ll explore the insights, challenges, and solutions shaping our industry.

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Steve 00:23

Hi, welcome to this latest edition of VERSED, VIUM Capital’s podcast. I’m really excited to have with me today, Tim Fields and Barry Carr, the co-founders and principals of Ignite Medical Resorts. Barry and Tim, thanks so much for joining me on VERSED.

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Barry 00:44

Thanks for having us.

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Tim 00:45

Thanks for having us, Steve.

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Steve 00:46

So we saw each other a little bit at NIC last week. And, it seemed that overall enthusiasm is up about the industry from a capital perspective occupancy. But let's take a step back and if you don't mind, just remind us about the origin story of Ignite Medical Resorts. How you founded it, how you two met each other. Maybe I'll ask Tim to start and then Barry to chime in.

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Tim 01:15

Sounds good. So, Barry and I worked together at a prior company, and I think always got along and saw the world the same way. And, Barry had left a couple of years before I did and got off on his own with a facility. And when, I went through a project in 2014/2015 to start to open some new facilities from ground up. Everyone probably remembers Main Street, and we had a lot of buzz around how to do new buildings and do them right. Barry and I actually saw each other at a mainstream conference and were all very enthused by it. And, went through that project of opening three new buildings in a year and really kind of fell in love with the model of kind of challenging the standard norms. These were not nursing homes. These were something radically different. And we had to look at how to do things different from staffing to dietary to customer service. And, so kind of really fell in love with the model. When Barry and I kind of reconnected again in 2017, I was like, I have this idea of trying to figure out how to do something with this. And he's like, I love this. I'm trying to do this. I love the idea. And so it kind of just fell into kind of common ground of how do we do something unique and innovative that wasn't the standard type of facility that everybody else has, and do something that really, at the end of the day, is where I'd want to put my loved ones, where I'd want to put somebody if they needed care. Nobody chooses to come to one of our facilities, they come to us because they need to after being in a hospital or having a surgical procedure. And so, it was just cool to be able to try to really reinvent something, and how to do it uniquely different.

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Barry 02:53

I agree with what Tim was saying. We decided that we wanted someplace that we would put our own loved ones or even, well, because of my age, probably me, but, really someplace that we would want our own people to be our own loved ones. And what kind of amenities, what kind of services could we provide? What kind of high level staffing could we provide? And, Tim and I both saw the world the same way as he said before, and got together to do this project.

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Steve 03:20

That's great. I love how you put that. It's where you want your loved ones to be. That personalizes it and gives you sort of an anchor for vision.

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In the early days of starting, was there a big setback that you both had to overcome? Is there a moment that stands out that kind of helped Ignite, sort of be forged in fire?

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Barry 03:42

Yeah. Tim and I both had a lot of experience. I had 30 some odd years at that point. Tim had many years as well. I won't say how old is, but we both had a lot of experience, but we didn't have a balance sheet. We didn't have experience in terms of having facilities under our belt at that point that we were operating. So that was sort of a new thing for Tim and I had to feel that everyone knows we could do this, but it's a risk for companies to take in terms of investing with us. So I think that was one of the biggest obstacles we saw early on, Tim?

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Tim 04:21

Yeah, I think coming off of what I said earlier was a lot of these Main Street buildings didn't work. And I think a lot of people kind of have this negative connotations: these new buildings someone tried but they didn't work. And so we're like, we're the ones coming at the at the bottom of that going, oh no, wait, we're going to try to do this a little differently and build an actual company around it, instead of trying to fit a square peg in a round hole and try to have a company that's culturally, clinically, therapeutically built as an older skilled nursing facility. How do we do this a little bit uniquely new and innovative? And I think a lot of people just are like, yeah, yeah. And so it really took us a little bit of time to get the first building in the first couple of buildings, a model proven that worked and start to bring people out and show them and to show that, hey, this isn't the same you've heard from the last number of folks. And, obviously with some of these facilities, ground up development is expensive, acquisitions for these types of buildings were expensive. And so we had to show and prove that the model worked and that what we were doing was actually translating to a viable business.

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Steve 05:27

Well said. And how many properties do you guys currently have?

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Tim 05:31

So this month we're opening our 27th and 28th facilities, both brand new developments. So it'll be 28 facilities. We're currently in six states. We’re in Illinois, Indiana, Kansas, Missouri, Oklahoma and Texas. 

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Steve 05:45

And Barry, as you kind of reflect on the building of this company, co-founders are relatively common. But you both not only are co-founders, but also co-principals and co-leaders of the organization. How do you balance what is in Barry's camp versus what is in Tim's camp? Talk a little bit about that delicate dance. 

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Barry 06:07

You know, Tim, I think has a lot of operational experience and likes digging into the whole marketing side of it, the staffing side of it, the the operational side of it, I've sort of tended more towards, the physical plant side of things and how our facilities look and feel. So I think we've sort of separated that out, not even intentionally. It just sort of morphed into that over time. Tim, what would you say about that?

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Tim 06:35

Yeah, I think when we first got together, Barry had a lot of more experience on some of the financial side, the insurance, the banking, a lot of that stuff that he had been dealing with for years, so gravitated to a lot of that. I think today, I tend to spend a lot of my time out in the field. I don't spend a lot of time in an office. I like to be out with the employers, out in the markets, with our hospitals and physician partners. One of the things that's really been critical for us is driving culture. I think from the get go, it was how do we do something unique and different? And that was really the core of it was how do we hire, recruit, retain the best employees. And for that was, a lot of standards of what we do that's unique and different than everybody else. And I think we have to try to continue to enforce that, right, and inspect what we expect. And so I spent a lot of time kind of driving culture and operational performance. As we've grown, we've had to get a lot more data centric and using  data to tell our story. We've built a custom data dashboard that's really helped to manage our KPIs. And Barry's taking a lot more on our government relations. He's on the AHCA board of governors and done a lot with Missouri Health Care and Texas Health Care and HCCI in Illinois and really helped to give not only industry, but our company and some of the things that we do uniquely a voice and a state front and also a federal front

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Steve 07:56

Having sat in on some of those AHCA and NCAL meetings with Barry, you all do very much have a voice. And it matters as you both know, we're in an environment in this industry where you've got government advocacy and regulations, and if you're not at the tip of the spear trying to shape some things, it can be a really a threat to your business. I know at VIUM Capital we were mindful of that, and with our relationships with HUD and trying to make that program as good as it can be and obviously been involved with AHCA/NCAL and other great organizations.

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So coming off NIC and kind of referencing a little bit of that buzz that was at the conference and hopefully seeing a rate cut here this week, capital flowing into the space performance generally I think is positive and trending in the right way. When you leave a conference like that and look at your business, what are you excited about over the next year or three years as it pertains to Ignite Medical Resorts? Is it new development? Is it acquisition? Is it some other part of the business that you all are anticipating? 

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Tim 09:10

Yeah, I mean I'll start. I think we're looking at all fronts. I'm one of the few people in the country that are continuing to be bullish on new development. And I think opening two new facilities this year was a big step for us, and we're excited to get those up and going. We still think new development’s disruptive in markets where there isn't ability to acquire. There hasn't been a lot of new product. And so we're excited about the opportunity to build over the next number of years, smartly, right? Analyzing markets, understanding where the best place to be is. It's a state by state thing, right? We have different certificate need laws in every state. And so we have to follow those accordingly. Some states are very easy to build in and some are not.

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I think acquisition wise we're looking for smart growth things that make sense for us, things that extend our teams the right way, things that we can be very successful in. While we've grown relatively quickly, we've grown, I think, very smartly. We said no to a lot of things. We've analyzed a lot of things I think don't make sense for us. And so we're still looking for those types of acquisitions. Our product is more of a new physical plant with private rooms. We are more suburban than urban and rural. We aren’t usually by large hospitals. And so we find things that kind of fit our type of facility, where we found that maybe was the right type of building built in the right area, just didn't have the right operator. What I like to call right horse, wrong jockey. We try to get those, right? Those are usually ones for us that have done very well. And so I think we're looking for smart and consistent growth over the next number of years so that we can continue to grow our organization, but do it the right way.

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Barry 10:48

We don't grow for the sake of growing. We grow just smartly. And it's hard. It's hard to find a facility that's currently built that meets our needs. Location wise and especially with private rooms, the ability to put in Starbucks cafes, and everything else that we do, it's not very easy to find something that's currently built. So we find it easier to build on our own. Well, that's a hard process. It works better for our overall need.

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Steve 11:16

And taking that into account, what's your perspective right now on the ability to build specifically from a capital perspective? From the debt markets, raising equity? Talk a little bit about where you see that landscape for a product like yours that you're delivering to market.

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Tim 11:32

Well, I think we have to be smart in terms of building. We're still paid on Medicare, managed care primarily. Some of our buildings have a little bit of Medicaid in them with the new buildings. But there's kind of a fixed revenue, right? So you can't overbuild where you're going to on paper already have problems with margin. So, that means finding the right land at the right price, finding the right general contractor. We've been fortunate where we've had a joint development partner that's really helped us with that and been able to fit in the box, so to speak, of how to do this the right way. Because if it gets too expensive, it doesn't work, right?

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But I think interest rates coming down a little bit, I think our proven track record of being able to do this and our due diligence to be able to really find things that make sense, have really hopefully, will allow us to continue to build.

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Steve 12:24

And for those entrepreneurs that are out there that might listen to this, any words of wisdom for anyone that wants to, maybe is in this business, but wants to grow in a way that Ignite Medical Resorts has grown.

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Barry 12:38

It's tough. It is expensive to build right now. It's very expensive to buy. Like you said, the market's very good. There's a lot of people out there looking to buy buildings. There's a lot of money available for people who want to build and to buy. So that piece of it, at least it's nice. But, the expensive part of it is that our rates don't go up because we spend more money on a building. So the Medicare rate in one building down the street from another is still the same. So you really have to be careful in what you're looking at. It's very easy to overpay. Sounds simple, but it is very easy to over pay. And you have to be very careful about that.

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Tim 13:20

I think that for new folks that are coming in, I think it's really about how to be different, how to have a differentiator. I think that our industry in general doesn't have a great stereotype of people. You don't go to a cocktail party and say, hey, I work in the nursing home industry, and people go, wow, tell me more. That you have to have a different story with that. And I think that could be around what you're delivering in terms of care and service, how you're serving the community, how you're being a great employer. But also your ability to really, truly have a vision that you can execute on. We, in our conference rooms have a saying, that's from Thomas Edison that says “Vision Without Execution Is Hallucination.” And that really drives what we do. And we can talk about a lot of things, but if we're not out there delivering great care, delivering great outcomes, delivering great customer service, taking care of our families, really having an engaging culture with reward recognition for our employees, that's the stuff that makes us different. It's the execution of our vision that really is what keeps us going every day.

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Steve 14:25

That's a great quote. I love that you have that in your conference rooms. So the way I usually end this is I always ask the guests or guests, in this case, if there's a book recommendation or a podcast recommendation, and it can be business related or personal. So I would ask, first, Barry Carr, any recommendations for listeners regarding a book or podcast that Barry Carr enjoys?

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Barry 14:54

There's a book that was written by, I forgot his name, from Ritz Carlton, I think is a big piece that really does get into the fact that treating employees well, happy employees make happy patients. And I think that's a big piece of it for us. And Tim has really lived that. That's his mantra. And I think that's a big piece of it. And as we have good employees, if we find that we have a better outcome, better product, and we do better things for our patients, I think that's a big piece of it. So I would recommend that book by, like I said, the Ritz Carlton. Tim, you may remember his name. I'm blanking on the name right now

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Tim 15:34

It’s Horst Kroner I believe, but he's the guy who started Ritz-Carlton and we've taken a lot of stuff from his, what they do on the hospitality side and very similarly, I've got on my desk right here Be Our Guest, which is a thing for Disney. Barry mentioned it, but we're very big on our hospitality model. Very big. Believe that hospitality and customer service don't exist very well in health care. And so for us, we've done a lot to go outside, Barry mentioned Ritz Carlton, we've done a lot with Disney, done a lot with Starbucks to go really study and understand what they do uniquely and, Be Our Guest is a new revision of a book. But it's always trying to find those little things that we can do to continue to sharpen our processes, our standards, what we do to continue to deliver a great customer service experience. You can take really good care of somebody, and you can make sure that they have the right medication and got the right therapy, but it's the experience of when they leave, you really were part of helping them in a time of need that really goes above and beyond. And that's really what we try to teach our staff and have in our culture is we're a hospitality business as much as we are a health care business.

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Steve 16:42

Great response. I love the focus on hospitality. And from our perspective as a capital provider, we definitely see the really the brand that Ignite Medical Resorts has built and a very strong one. And it's clearly by no accident. It's been very intentional with both of you. So thank you.

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Yeah, I appreciate both of you, being on this. Keep doing what you're doing and we'll look forward to connecting sometime soon. So this is Steve Kennedy signing off for this latest episode of VERSED.

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Outro

Thanks for tuning in to VERSED, powered by VIUM Capital. The conversation doesn’t stop here. Let us know what topics you want to hear and let’s make an impact in healthcare and seniors housing together. Till next time, I’m your host, Steve Kennedy, and this is VERSED.

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