I figured it was time for an update on the Stanly County Home Health discussion. There has been a lot of discussion about some ideas some of us on the board have proposed. Every new idea involves tasking county employees with researching information, pulling and working numbers from various departments and locations, and that just takes time.
We, or I, have been pushing two potential solutions to the largest problem that I perceive we have – pediatrics. You can read the previous article if you don’t know the full story. It’s too long to recap here. I’m still open to other ideas, but so far I haven’t heard any from anyone.
- Option 1: Stop using contractors and hire people directly to reduce costs.
- Option 2: Outsource the entire Pediatric care portion of our home health program and see where that leaves us in terms of viability. (Remember, we’re staffing that with contractors, so it’s already outsourced anyway for all intents and purposes.)
Hiring Contractors Directly
The idea of replacing contractors by hiring them directly is a good one in a perfect world. However, keep in mind the entire staffing agency marketplace exists for a reason. If it was always that simple, this entire section of our economy wouldn’t even exist. There are a lot of reasons why you outsource. (Note: I say that as a business owner that hires subcontractors, and whose business is also employed AS a subcontractor agency often as well. I work on both sides of that particular coin every day.)
- It’s cheaper that all the costs of hiring the labor yourself. (No need to provide benefits, etc.)
- You can’t afford full time people but still need the job done.
- There aren’t enough qualified people in the area to pick from to hire them even if you wanted to.
- Even if there were, could you afford them and would they want to work for YOU rather than themselves?
In my original article, I was referencing payroll and salary numbers provided by some of our county staff. In short, the numbers broke down like this:
- Contractors cost us $800,000/year.
- Hiring enough people would only cost us $500,000/year.
- We would save $300,000/yr if we hired them directly.
The idea generated a lot of discussion, both for and against, but most importantly to me – it made the right people dig deep into the numbers.
As it turns out the numbers I was given weren’t right. To be precise, the overall numbers were “generally” right but left out some factors. The county staff, led by director Jenkins, worked diligently to get us real numbers. I’m going to recap those below.
Human Resources went back through the numbers above and came up with the total amount it would realistically cost to hire full time employees.
|What we spent on pediatric contractors in 2018||$815,618.00|
|Cost to hire seven employees for those roles||$583,924.00|
|Estimated Payroll Cost Savings||$231,694.00|
The original numbers estimated the savings at closer to $300,000. Obviously that wasn’t quite correct. One of the assumptions was basing the salary on the lower-end of the ranges for those positions. It’s very likely that no one is going to pick up and move to Stanly County for those salaries. Would YOU pick up and move to somewhere new to take on a job starting out in the lower end of your field’s pay rate? Not if you had any experience. The new figures are a little closer in terms of actual costs of payroll.
This is a good example of why we check and double check everything to death in government. There are still figures missing from this that weren’t apparent unless you were the person actually doing the calculations and had input from the people who actually pay the bills. There’s a lot of inter-departmental coordination that needs to go on to get to the bottom of numbers like these. My sincerest thanks to all of those that helped put these numbers together for me.
I knew I’d be writing this article, so I asked David Jenkins to get me the ancillary costs in a break-down so I could publish it and you could see for yourself.
Here are some of the ancillary FTE expenses associated with each of the seven employees we would need to consider hiring:
|Mileage on Personal Vehicle||$4,200/yr ||$29,400.00|
|Purchasing a desk||$900/ea||$6,300.00|
|Two-drawer file cabinet||$136.80/desk||$957.60|
|Computer per person||$600/person||$4,200.00|
|Office supplies per person||$250/person||$1,750.00|
|Uniforms (5 scrubs/1 polo per person)||$195.00/person||$1,365.00|
|Personal Liability Insurance||$3,736/person||$26,152.00|
|Total First Year:||$88,319.45|
So let’s factor that back into our first numbers and find out what the county would save to hire employees rather than utilizing subcontractors.
|Original Cost Savings before FTE expenses||$231,694.00|
|Additional annual costs for 7 employees||$70,596.85|
|Actual Potential Maximum Savings by Direct Hire||$161,098.15|
This still doesn’t factor in things like finding office space for them, potentially having to increase office space, etc. There is time, effort, and other costs associated with that that surely can’t be accurately forecast in this model.
Knowing what I know how, someone is going to ask me “Is it worth it to even try to potentially find seven people to hire to replace all those subcontractors we contract with now?”
In my opinion, no. It’s really not. Restructuring the entire program will likely not even allow us to break even the first couple of years by the time we factor in office space, deal with the hassle of locating it, etc.
So, unless someone has something new to change my mind – even though this was my own idea – I’m of the opinion that we’ve tried hard to make it work, done the research, and its just not an viable solution.
Note: I say “my idea” but I’m sure a lot of others had the same thought as well.
Option 2: Outsource the Pediatric Market Entirely
This is one of those solution that will likely break people into two camps. One will be the” kids have to come first so do whatever it takes to get them cared for by a provider that will care for them the way they need.”
The other will be “we can’t lay off people. You’re taking away jobs. You can’t do that.”
In this instance, I have to pick sides, and absent any other solution at the moment, the pediatric care is the single most important aspect in my mind right now. The children and the families that rely on this service don’t have a choice. They don’t have alternatives. The adults do. If I have to pick one or the other, I’m left with the fact that the adults can find other jobs, and have other solutions available that these children don’t. If we can do both, great. If we can’t afford both, I’ll come down on the side of letting go of the contractors altogether because something has to be done. Status quo won’t do it.
The facts as I see them are:
- No one else cares for pediatric patients in Stanly County.
- We can’t do it and make a profit under the new Medicaid system (unless another solution comes up from another aspect of HH that I haven’t seen yet) and we HAVE to make ends meet or we’ll be shut down anyway.
- We have to find a way to make the program break even.
That’s the facts as I see them at the moment.
I’ve been talking with Cyndi Secura, the CEO of Moore Pediatric Therapy Services. Here are some facts about MPTS.
- They are a pediatric-only therapy company.
- They provide both in-clinic and in-home therapy services.
- They provide OT, PT, Speech Language, and Feeding therapy.
- They’ve been in business for 11 years and are a small woman-owned company based out of Seven Lakes, NC.
- They have over 35 pediatric specialists.
- They are actively searching for a clinic location here in Stanly County as we speak.
- They already have Stanly County patients traveling to their Montgomery County location.
- They are fully accredited with all major insurance providers (which means they CAN profit because they don’t ONLY get their funding from Medicaid).
- They would love to take on our patients.
- They would love to take on any caregivers we employ/contract now if those people are interested in transitioning to a new company.
I literally can’t think of a better solution than the idea of transitioning our entire pediatric market over to someone like MPTS. They’re small, genuinely care, and love what they do. Every review I can find on the company is positive. I can’t find anyone that’s had anything negative to say about their experience with MPTS.
I’ve probably had more interaction with them at this point than anyone else in Stanly County government, but I know people want, or maybe need is a better word… people NEED to be able to look someone in the eye when it comes to considering something like this. They deserve the opportunity to meet them, take stock of the kind of person that would be caring for their children, ask questions of them, etc.
Special Meeting – Wednesday
I’ve asked Director Jenkins to setup a special meeting for the CHSA board to allow Ms Secura an opportunity to come speak to our board, introduce herself and her company, tell us about themselves, and ask questions from our board members. Director Jenkins has graciously agreed to set it up on short notice.
The special meeting will be Wednesday, April 3rd, at 4:00 PM at Stanly Commons and like all Health Dept meetings, this one is open to the public.
More to be done…
This isn’t the end of the discussion, merely another step forward in finding a solution. If any of you out there want to see the discussions first hand, feel free to attend our monthly meetings. They are always open to the public. We have a meeting Wednesday at 4, and Thursday at 6 PM this week.
If you’d like to meet me after either meeting with questions, or comments, I’d be glad to take the time. (Just find me after before I forget and make a beeline for the truck to get home to have dinner!)
If you have anything to share, you can always leave a comment here, on Facebook, or email me at firstname.lastname@example.org.