The region Ben oversaw within the support service organization was consistently achieving a 17% EBITDA margin with a company goal of 25% to meet company and private equity partner expectations. One significant issue identified focused on hiring and recruiting practices for the Center Administrator role. Ben noted that employees at this level were initially hired based on education, but most lacked true experience in managing budgets or understanding P&Ls to leverage/self-identify strategies for EBITDA margin improvement. Ben approached the issue from two perspectives:
1) Coaching and mentoring to foster long-term autonomous management practices to prevent the issue from requiring daily oversight.
Benjamin J. Holzman,
Executive Vice President – Healthcare Operations
2) Educating on business principles and understanding of the P&L statement so Center Administrators could assess needs and evaluate their progress.
The collaborative and holistic approach to successful P&L management includes consideration of variable expenses and an emphasis on quality case management to ensure long-term growth. Variable expenses such as repairs and maintenance, therapy supplies, non-billable administrative time for technicians, and office supplies were all identified as categories directly manageable at the center level. Under Ben’s mentorship, Center Administrators learned to align their monthly budget spend, including consideration of cost-spreading across multiple months, better supervision of hourly labor increasing the billable-to-non-billable time ratio (labor utilization), and deferral of non-emergent supply ordering and repairs across quarters. On the clinical side, a concentrated effort to increase billable time via improved staffing and rescheduling of lost direct treatment hours was combined with decreasing the time to credential BCBAs (earlier commencement of the initial credentialing process) and improving attrition (mentorship programs, improvements to the onboarding/training program, and establishment of a career ladder for technicians and clinicians) to increase the revenue side of the equation.
The results of this multi-factorial approach to EBITDA improvement in the region allowed Ben to lead the company in YOY growth. Factoring out the clinical effort, EBITDA margin was improved by 3% via variable cost containment measures alone. Combined with the clinical improvements, the overall EBITDA margin was improved by 7% and came within less than 1% of the company goal. Given the challenges other regions in the company faced with a similar approach, Ben’s region allowed for the sustainability of a separate de novo market that was otherwise negatively impacting the overall company EBITDA, granting them the opportunity to continue to improve operations and avoid the need to discontinue providing services in that market.
Successes abound in Ben’s region using this approach to EBITDA improvement. Detailed analyses and center-specific targets were necessary to align the region with company goals. It took education, mentoring, and ongoing oversight to achieve autonomous support for this initiative long-term, but, ultimately, the regional-level workload was decreased, and field-level managers were empowered to better support their centers. Additionally, the added profit margin was able to support a separate de novo growth market and allow for reinvestment in Ben’s market driving future de novo growth.
Watch full video interview below.
Contact Ben Holtzman via LinkedIn or his Career WebFolio.
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