As hospitals grapple with coronavirus, Home Health Providers look to fill the void

Healthcare systems and hospitals continue to face shortages of personal protective equipment over the coronavirus pandemic. BrightStar Care Founder & CEO Shelly Sun joins Yahoo Finance’s On The Move panel to share how the company is creating fulfillment centers where franchises can access PPE.

Video Transcript

ADAM SHAPIRO: Welcome back to Yahoo Finance. I'm Adam Shapiro along with Julie Hyman.

We want to talk about how home-health-care workers are helping people who have to stay at home who might be in less than good health and what that means for that industry. To help us understand all of those issues, we invite into the program Shelly Sun. She is BrightStar Care CEO and Founder. It's good to have you here.

SHELLY SUN: Thank you so much for having me.

ADAM SHAPIRO: There are 3.3 million home-health-care workers, and several of these people work with you. What do you do to protect them? because there are so many people who are elderly or frail who have to live at home who need their services.

SHELLY SUN: Absolutely. And that's been, you know, a very high priority since we first started. We started ordering PPE as early as March 6 so we could provide an N95 mask to every single caregiver who wanted it. We're Joint Commission accredited, so infection control and hand hygiene was already part of our daily operating procedures. So from that standpoint, we felt like we came into a crisis as best prepared as we possibly could be.

And then we implemented technology very early on. We made sure that our caregivers were being screened before they went into clients' homes as early as March 19. Then the clients were being screened as early as March 26.

And we made sure that we changed our population of caregivers. So caregivers that were doing care with a senior were not also going into other settings where there could be further and greater exposure, trying to both keep our clients safe but also knowing that we had a responsibility as best we could to keep our caregivers safe as well.

JULIE HYMAN: Shelly, it's Julie here. And so when all was said and done, you all found, what, about 1% of the folks in your employ did end up contracting the virus, which is low compared with the spread that we saw in nursing homes, for example. And so I guess the question is what happens now? How long do you continue with these protocols? What's been the reaction from patients as well as your employees?

SHELLY SUN: Yeah, so one thing-- the 1% number is those symptomatic and those that have been positive tested. So it could be far less than 1%. If you just think about normal flu, anyone who's symptomatic, that's the 1%.

So as we think about, you know, what continues even after we come out of this, we had hand hygiene as part of our standard operating procedures. That will continue. We haven't hired, at the local level, a caregiver that doesn't have to demonstrate they know how to wash their hands and know how to wash them for 20 seconds with the right temperature and utilizing soap. So we-- you know, we were prepared with that kind of component coming into it.

We think there's, you know, PPE that's going to be necessary for a long period of time until there's vaccination, and we're committed to making that available to our caregivers. We put $2 million of our balance sheet, though very tough to do-- we're still a small- and medium-sized business. We put $2 million of our money to work to order enough PPE to see us through the crisis so that our local offices were not having to worry about sourcing, because most of the orders required a commitment to 10,000 pieces or more to be able to get PPE into stock. So that will be part of likely how we continue to operate in 2020 and probably throughout most of 2021 until there's a vaccination readily available for the community.

ADAM SHAPIRO: Shelly, I'm glad you brought up the kind of financial investment you've had to make because my family, we know firsthand the cost of having in-home health care, and it's expensive. And I'm curious how you as a business manage those costs. But also for us, the customers, there just comes a point where it's no longer affordable. So where is the balance in that?

SHELLY SUN: Yeah, for most of our clients where we have paid our-- paid the workers a safety pay, that's been passed on to our clients-- not in full but in part. The PPE has been an investment by the local office and the brand working together. We pass that on at cost to our local offices. So we're ordering far less expensively. Obviously ordering 10,000 versus 10, far less expensive and no administration charge, no capital-use charge.

So we recognize, you know, there's a lot of competing constituencies here. So we have many clients that are living on a fixed income or their children that are helping to pay for it. So we haven't seen cost increases of more than 10% for our clients even though costs have typically risen by as much as 30%. That's how we felt very justified and that it was necessary to take advantage of the PPP loans and felt like it was necessary for our local offices to be able to stay in business because many of them had gone upside down on the margins, both because of the cost of PPE but also having to pay more in wages because many caregivers could make more on unemployment than they were making on their standard wage.

So increasing their wage to keep them working and not passing that onto the customer meant that there was a deficit. And the more hours times a negative is the more the deficit becomes. And so PPP-- we put a lot of time and a lot of resources into making sure that they could be made available to survive through what will likely be a long, choppy period.

AKIKO FUJITA: And, Shelly, you know, we've heard so many businesses talk about the changes they've made as more temporary measures until a vaccine is actually in place. You alluded to some of the changes you've made in the way your business operates, but I'm wondering how much of that you think is going to be permanent. What permanent shift are you likely to see coming out of this, and what does it mean for your business model?

SHELLY SUN: Yeah, well, I mean, I think, you know, we were-- we are the only national brand that has Enterprise Champion for Quality designation from Joint Commission. So we came into this already setting ourselves at a higher standard, and that will continue.

We are nurse led at the local level. That investment is made in a nurse overseeing care. That would have been a requirement for some brands coming out of this. That has been how we've operated for two decades.

So a lot of those higher standard items will be necessary. They were a nice to have. They will now be necessary.

I think the coordination with virtual care-- we've got four pilots that are in place right now where we can combine home care one on one with virtual care and shift the mix of those hours, back to Adam's point, to make the budget go farther potentially as well as to meet customers' needs and fears about having people come into their home. And so what does that mix of virtual care versus in-person care look like, recognizing that for-- to overcome depression and isolation, an in-person component is still critical. But what's that blend between virtual and in-person?

ADAM SHAPIRO: Shelly, I'm afraid we're out of time. But some of us know how crucial your industry is, and it's only going to become even more as it grows.

Thank you so much for joining us. We're going to be right back.