For-Profit Provider Shares The Benefits of Choosing The Green House Model

By / Posted on July 29th, 2014

“Why would you do anything else?”

That was the question posed by John Ponthie, Member of Summit Health Resources, a for-profit skilled nursing provider in Arkansas, who has embraced The Green House model on two campuses, and is about to start development of a third. He believes that the differentiation, risk mitigation, long term financial benefits, and culture change support from The Green House Project make the decision a “marriage of passion and economics.”

I recently had the opportunity to visit John’s beautiful campus in Magnolia, Arkansas along with a for-profit group looking to develop Green House homes in Missouri. After a tour and a delicious Arkansas barbecue with Elders and the staff, we sat down to learn why a for-profit operator would build Green House homes.

John’s Green House homes are located in a rural area of Arkansas where Medicaid is the biggest payer source, and his private pay rate is $15 less per day than Medicaid. He didn’t want to have to spend “his whole life attracting residents.” The decision to build Green House homes has been rewarded with occupancy rates in the high 90% range compared to a state average of 70%.

Risk mitigation was another reason for developing Green House homes. After careful consideration, he concluded that occupancy was his most significant risk. After a big investment in this business, he didn’t want another organization with a newer building or a better concept, to “trump” him. Green House homes are the pinnacle of skilled nursing innovation, and so highly differentiated from the competition, he believed that the model and its benefits protected the business from new entrants.

But what about the costs of Green House homes versus traditional skilled nursing facilities or other models? The team at Summit Health Resources focused on ways to manage development costs without cutting corners, keeping capital costs low. The key is finding someone who really knows construction, according to John. “Most people don’t know construction. And you have to come up with a design that makes sense.” The incremental cost of Green House homes, when amortized over 20 or 30 years, and taking into account the benefits, “is a no-brainer.”

According to John, The Green House culture and organizational change are the “magic.” The Green House Project helped create a culture focused on caring for Elders, and providing them with a meaningful life. Families spend more time with their loved ones, and are extremely involved with the activities in the home.

For the staff, the benefits are enormous. They are empowered to do their best for Elders. They feel a sense of pride, and that they are a part of something special. “Their commitment goes way beyond their job description,” according to John. In addition to having very satisfied employees, he’s been rewarded with very low turnover.

It was great to see the “magic” created in Magnolia first hand, and to hear John’s story. It’s truly a case of “doing good, while doing well!”