In 2012, VNA Healthcare, the Hartford-based non-profit which provides home health assistance across 60 towns throughout central and northwestern Connecticut, will achieve a milestone in stability: its 110th anniversary.
But for many Visiting Nurse Associations in Connecticut and nationwide, ensuring stability in the current economic environment has meant one thing: consolidation.
Over the past four years alone, VNA Healthcare has consolidated twice, acquiring a similar visiting nurse association in Wallingford and, as of this past January, one in New Britain. Ellen Rothberg, president of VNA Healthcare, notes that the reimbursement landscape for home health organizations like hers have made consolidation a necessity for many VNAs.
“This year, federal support [through Medicare] will decrease by another 4 percent,” Rothberg explained, noting a trend she expects to continue. “And state funding has been flat for the past five years.”
Those two sources account for roughly 75 percent of VNA Healthcare’s operating revenue, according to Rothberg. “The only way to survive is to increase market share — and shrink administrative costs — through consolidation.”
Rothberg points to her own organization as an example. Despite adding 125 new employees to her organization through consolidation, she’s been able to reduce administrative expenses in recent years by more than 10 percent. That’s in large part, she says, because as a larger player in group purchasing arrangements, her group is able to reduce many administrative costs — from better rates for cell phone minutes to IT support.
And as many organizations — particularly smaller ones — look to increase efficiency to remain viable, Rothberg says, consolidation is becoming more common. According to figures compiled by the Connecticut Council for Philanthropy, there have been nearly 30 nonprofit consolidations or alliances across the state, some involving multiple agencies, since the stock market plummeted in 2008. And that’s not including the nearly one dozen nonprofit closures that the council has documented.
For VNA Healthcare, consolidation has had it benefits, including reducing duplicative services in some towns. That change has played well with foundation funders and donors, some of whom have provided increased funding. Consolidation has also improved services for many clients. “In the Wallingford, for instance, we’ve introduced certain cardiac services that weren’t previously available through the smaller VNA,” Rothberg notes.
And that’s important to Rothberg. “As a nonprofit, we are mission driven and it’s the same mission we’ve had for more than a century,” she said. “To go to someone’s home and help them get better.”
While VNAs must remain true to their missions, Rothberg argues, healthcare is a business and nonprofits like hers need to think like a business. For VNA Healthcare, consolidation has been an important part of the business strategy.
“We want to ensure that the money we receive is going directly into the delivery of services to clients,” she says.
Despite the trends of declining state and federal funding for home care services, Rothberg sees no end to the demand for her organization’s services moving forward, as thousands of Baby Boomers reach retirement age every day. “It’s still less expensive to treat someone in their home than it is to have them in a hospital or nursing home,” she said.
One of the biggest demands for VNA service over the past the two years is for home healthy aides to help Boomers recover from joint replacement surgery, according to Rothberg. “That’s an area of growth for us,” she said. “As a larger organization, we can more easily diversify [our service offering], which is a big advantage in a free market.”
It’s an advantage that VNA Healthcare has created through consolidation. And Rothberg admits she’ll continue to explore additional opportunities to consolidate if it makes business sense.
“I want to ensure we are stable enough to help people for the next 110 years,” she said.
In brief …
Chemtura Corp., a specialty chemical company with locations in Middlebury and Naugatuck, donated more than $140,000 to the United Way of Greater Waterbury. The 2011 campaign combined employee contributions and fundraising with a $50,000 corporate gift. The company won the Spirit of Excellence Award from the United Way of Greater Waterbury in 2011 … First Niagara Bank has donated $50,000 to support the Teen Incentive Program at the YMCAs of Greater Hartford and Greater Springfield. The program provides at-risk teens with the tools and encouragement needed to achieve academic excellence and work readiness… The Tanger Outlet Center in Westbrook donated $17,486.38 for the battle against breast cancer. Tanger made its donation to Middlesex Hospital Cancer Center during a special ceremony at Water’s Edge Resort & Spa … Grants totaling $45,400 from the Beatrice Fox Auerbach Foundation Fund at the Hartford Foundation for Public Giving are instrumental in underwriting the fifth Connecticut Mission of Mercy clinic March 23-24 at the O’Neill Center on the Western Connecticut State University campus, Danbury. The first-come, first-served clinic, operated by the Connecticut Foundation for Dental Outreach in collaboration with the Connecticut State Dental Association, is held in a different location each year. Dental services are provided free to anyone, including children, who are without dental insurance and in a low-income situation … Enterprise Rent-A-Car ‘s annual charity golf tournament has rasised more than $27,000 for the Boys & Girls Clubs of Hartford. The event was held at Lyman Orchards in Middlefield.