The harsh economic climate in Connecticut during the past several years has been particularly hard on the nonprofit community.
Most, if not all organizations devoted to providing needed social, civic and arts related services have felt the sting of trying to meet their obligations on leaner budgets and fewer donations.
This is true, also, for organizations like McLean which provide seniors with a range of services from independent living to long-term and post acute rehabilitative care, hospice and home care service, outpatient rehabilitation services, meals-on-wheels, and more.
Together, Medicare and Medicaid amount to roughly two-thirds of McLean’s revenue, according to McLean CFO Tito Gautier. The other third comes chiefly from McLean’s private pay clientele. Innovative financial management abilities were desperately needed at McLean to help improve the organization’s financial condition.
For Gautier, who joined McLean in 2006 after many years in finance roles for Aetna, The Hartford, ING Mexico and finally St. Joseph College as interim vice president for finance/treasurer for two years, the change in business environment and in economic realities and challenges were immediate.
“I came in at the end of fiscal year 2006.” he said. “In 2007 we lost even more money than the year before. But, in 2008 and 2009, we turned it around. We made money in those years and we’re making money this year.’’
Gautier said that his first experience in the nonprofit sector taught him a critical lesson that he has applied to McLean. A too- heavy reliance on donations for an organization’s operating dollars puts far too much at risk when the economy worsens.
At McLean, Gautier steers donations toward one-time capital improvements and directs his efforts in raising revenue in other ways. Cost cutting, too, has played a significant role in improving McLean’s financial position.
“Much of what I learned over the years in finance has brought me to one conclusion: You need to spend the necessary time to find clarity, to find out how the expenses are being driven.”
To aid in this process, Gautier developed an analytical model for each business area at McLean that provides data daily to managers. It’s way for managers of each division to monitor performance and make improvements as necessary.
One example of the savings this has produced, Gautier said, occurred when one of his managers discovered the numbers of hours spent by nurses above the allotted eight-hour shifts.
At McLean, he said, between 75 and 80 percent of expenses are attributable to salary and benefits. As a result of this discovery, increased efforts to bring work time hours more in line with expectations resulted in large savings.
Being able to better manage use of part-time therapists also resulted in savings by implementing a more effective strategy to understand the total numbers of hours needed for patient therapy and then, scheduling accordingly.
The effect, he said, in addition to realizing cost savings, was to increase the incentive for therapists to promote the client to return.
A critical part of his success in reducing expenses and achieving savings, Guatier said, was due to gaining the buy-in from employees.
In 2009, Guatier won approval from the McLean board of directors to implement a modest annual employee bonus, provided certain budget targets were reached.
Now, Gautier says, employees help self manage expenses because they know that things like working past one’s shift threatens to eat into the bonus pool.
“I almost feel there’s a mission here that I am doing,’’ he said. “It’s that kind of place. We have 300 full-time employees, 500 when you count the part-time employees, all trying to make a living, provide for their families. I believe I have a responsibility to them, at least in helping somehow minimize the stress levels we all feel in today’s world.”
“Tito Gautier has been an absolute blessing to McLean,” said Mark Wetzel, McLean trustees’ chairman. “His detailed analysis of our operations has been invaluable in assisting us to make the hard decisions necessary to navigate through these turbulent times in the health care industry, turning our business around and helping us set a course for the future.”
Name: Tito Gautier
Title: Vice president of finance and treasurer
Company: McLean Community Services
Company headquarters: Simsbury Annual revenue: $27.4 million
Age: 52 Hometown: Hartford Education/credentials: B.A., economics and accounting, Holy Cross; MBA, University of Connecticut; CPA
