Kindred Health CEO staying focused on growth strategy
With more than 1,700 locations in 46 states, Kindred Healthcare has a unique perspective on caring for patients during the COVID-19 pandemic. Its network spans long-term care, rehabilitation and behavioral health. And despite the financial pinch the pandemic has put on the industry, Kindred President and CEO Ben Breier says the organization is well-positioned to stick with an ambitious growth strategy. He recently talked with Modern Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript.
MH: Can you talk about your approach to spreading best practices across a large network during a pandemic?
Breier: It’s been a challenge as you might expect. Like most of the industry, we almost overnight had to set up virtual support centers. And we all take for granted, six months later, the technology and the people that we’ve deployed to do that. We had planned for it a little bit back in February and early March, but when the day actually came where we said, “Let’s turn the light on, and stand this thing up,” it was quite a task.
We have the unique challenge of providing healthcare in 46 states. And, it’s been fascinating, not just the infrastructure side of how we set things up, but actually to watch as the COVID-19 pandemic played out across the country. We saw the Northeast corridor go first, particularly in New Jersey and New York. We’ve seen it spread to the Midwest and out West. And then, most recently over the summer, the big rise in Florida and Texas, which are two of our largest states. We’ve had to build on the progress we’ve made around the development of our infrastructure each time, to make sure we were carrying out that consistent operational mission across the country.
One of the things we did early on that has been so successful in terms of managing that platform across the country is the creation of a very formal incident command structure. We knew right away that we should create command and control so we could make sure we were gathering the critical flow of information and make decisions in real-time, particularly clinical decisions. And like so many others, we had to early on make sure that we were managing the supply chain.
MH: Are there some things that you’ll do differently in a second surge?
Breier: One thing that we foundationally learned was that our long-term acute-care hospitals, our inpatient rehab facilities and our acute behavioral health hospitals … in many ways turned out to be ideal settings to handle these really sick, really medically complex patients.
How do you isolate a patient? How do you take care of a patient who has multiple system problems? How do you deal with a patient who’s on a ventilator, or who might be suffering from stroke, or neuro rehab needs, or who might be paralyzed from the disease? These are things at our core that our facilities are really good at and able to provide.
In the early stages … inpatient hospital systems were so concerned about ICU bed capacity, med-surg bed capacity, as they were expanding into tent hospitals. We immediately became an outlet for a lot of those patients to be moved out of ICUs, into our longer-term care facilities.
If you ask our physicians and other clinicians, there’s so much that we learned about how to care for the disease, about how to test for the disease, about how to isolate and make sure that we were also caring for all of the other patients in our facilities. If we can build upon both of those, we’ll be well-prepared, both for what we are currently seeing and what we’ll see in the future.
MH: On the behavioral health front, are there two or three things that seem to be the most pressing issues?
Breier: When you get into a pandemic of this sort, and you’ve got people who are already suffering from these kinds of things, that now becomes even more acute in the way that depression might set in, and the way that social isolation might set in. The biggest thing that I’ve seen … is that so many of our patients and our prospective patients that have been socially isolated from others are really suffering from it.
If we are not proactive … the pandemic is going to turn into a pandemic around mental health.
MH: COVID doesn’t seem to have stopped your growth strategy. You had some announcements over the past couple months to expand your footprint. What do you see for Kindred over the remainder of 2020 and into 2021?
Breier: Over the last decade, Kindred has evolved in lots of different forms and facets. When you go back a couple of years ago to our board’s decision to take the company private, and essentially sell our home health and hospice company to Humana, as they will own it outright, we decided that we wanted to be focused on being really the largest specialty hospital company in America.
We have tremendous infrastructure at the enterprise level to manage and maintain running lots and lots of these 60- to 80-bed specialty hospitals across the country. Today, we have almost 200 of those facilities in the states where we operate.
One of the things that we’ve learned in the operation of specialty hospitals is that having close and direct relationships with the short-term acute-care health systems in those local markets is really the key ingredient, not only toward our success, but also toward local health system success in the context of how do they position and move patients from one setting to another as seamlessly as possible.
We go in as 50/50 partners in most cases. We keep the local health systems brand on the wall. We helped to bring the enterprise-level sophistication for how to run these. We get them up and running quickly. We get them up and profitable quickly. We have more growth than we almost sometimes know what to do with. We’re going to build and open eight new rehab hospitals next year. We’re probably going to do that again the year after, and maybe the year after that.
We’re also rationalizing and managing our current portfolio. This year, in five of our long-term acute-care hospitals, we opened acute rehab units—an inpatient rehab hospital inside of an LTAC. We have five today and expect to triple that over the next couple of years. In partnership with hospitals, and mostly around organic growth, we think our path to growth is really exciting.
MH: So there’s no real slowdown in sight.
Breier: We were certainly concerned in the early stages of the pandemic about where people’s attention span would go—regulatory agencies, things that we need for approvals. But knock on wood, we’ve been fortunate. It hasn’t slowed things down at all. In fact, if anything, I think it’s been more of an instigator toward we need to do this faster and we need more.
MH: There are concerns about private equity reaching further into healthcare. How do you address those given Kindred’s ownership model?
Breier: We carefully chose our private equity partners in TPG and Welsh Carson, because we knew that these two partners specifically had arguably the deepest well of experience and knowledge, in having run and owned healthcare service companies. And what they understand is the same thing I understand, which is that quality is what drives financial results.
In the two years that we’ve been partners with them, we have replaced all of our ventilator units at a multiple million-dollar cost.
We’ve added more than 25 CT scanners to our hospitals at a multiple million-dollar cost.
We’ve bought ourselves out of leases for hospitals that weren’t performing well at a multiple million-dollar cost. And our partners, in every experience, put their money where their mouth is, to make sure we were delivering a quality product. If done the right way, that’s where private equity can serve all of us in healthcare well.