Exploring the Tech Roadmap for Eldercare Facilities

Introducing Andy Flatt

 

John Farkas:

Hello, everyone, and welcome to Healthcare Market Matrix. I’m your host, John Farkas. And I’m eager to jump in today’s interview because today we have the chance to talk to Andy Flatt. And Andy currently serves as the Senior Vice President and Chief Information Officer for National Healthcare Corporation, or otherwise known as NHC. As I’ve interacted with folks who know Andy and just getting in preparation for our time together today, I asked them to tell me a little bit about how they would characterize him and his style of leadership. And the thing that emerged over and over in my conversations is the idea of servant leader.

As I imagine the role right now of a CIO and in a healthcare organization in today’s climate, I don’t know of another way to approach it right now. There’s a lot going on. It is a high-pressure environment. And success in that role, I got to think means climbing in there, elbow to elbow and being willing to work. And that’s a lot of what I’ve heard of Andy’s approach.

So, what I know about NHC is that it’s the nation’s oldest and among the largest publicly traded long-term healthcare companies. And I’m going to have Andy tell us a little bit more about the scope of that organization here in a minute. But I want you to know, Andy comes to his role really honestly. He spent somewhere in the neighborhood of 40 years in a combination of public and private healthcare organizations, including more than 20 years as a CIO. And he’s served in executive leadership roles at Corizon Health and at Cigna HealthSpring at AIM Healthcare, which is now a division of Optum and Baptist Healthcare System, which I think is now a division of Ascension.

And Andy, I’m looking forward to learning more about what you are facing now as you’re looking at the horizon and the role you see technology playing in the future of NHC. So, welcome to Healthcare Market Matrix.

 

Andy Flatt:

Well, thanks, John. It’s a pleasure to be with you this morning. Appreciate that introduction.

 

John Farkas:

Yeah. So, as I mentioned, tell us a little bit about the scope of NHC and the number of locations, coverage, stuff like that.

 

Andy Flatt:

Sure. Well, NHC has been around… you mentioned our public nature, and we’ve been around for a while. We’re in our 52nd year. Dr. Carl Adams started this company back in the ’70s. He mortgaged his own house to buy some nursing homes that were in trouble and grew this very humbly into what it is today.

NHC has 68 skilled nursing facilities. Nursing home would be the old term for that, and that’s a primary area of business for us. But in addition to that, we’ve got assisted living communities and dependent living. We have three behavioral health hospitals that we either joint venture in or own ourselves and run 35 home care agencies, 29 hospice agencies, memory care, pharmacy, rehab services. A lot of things going on in the senior care space.

One that hopefully we’ll talk a little bit about later is we’re doing more in providing our services in a management services type provider situation where we’re offering our services to other senior care companies. So, that’s a new division that I’m very excited about.

 

John Farkas:

Gotcha. So, tell us a little bit about your time leading up to your time at NHC. Tell us what kind of color between the lines a little bit and talk about the road that brought you here.

 

Andy Flatt:

Sure. Well, I’ve been in Nashville my whole career, which is now 40 years this year. I went to Lipscomb University and studied computer science, but my first job right out of school was as a software developer in a renal or kidney care setting. And I say that because that’s where I cut my teeth on what we call electronic health records today. You didn’t call it that back then, but it was clinical systems that took care of patients. And that’s 40 years ago.

So, I started as a developer. And I’ve stayed in healthcare my whole time, had the opportunity to do management at Baptist Healthcare, was an entrepreneur in between when I started starting in healthcare, we started in the HR company that just sold recently. So, it’s been around since the late ’80s. And I mentioned those companies because I would say one of the things that… or two people that have shaped my background and my thought on things more than any, first I guess would be my father. My father’s a small town minister.

And the servant leadership that he showed is where that’s in my DNA and where I have a passion about serving other folks. I would say the other is the word passion because Dr. Victor Paul, he passed away a few years ago, he was my mentor at DCI. And then, when we started business, he was a partner of mine. He was an expert at the time on lupus and kidney disease, a South-African born, fiery doctor.

And the main thing he stressed in my life, he said, “Have a passion. I don’t even care what it’s about, but do you have a passion and do you have a fire in your belly?” And that goes back to the ’80s and ’90s when we were working together. So, I would say those two have had as much influence on my career and direction as any.

 

A Look into Andy’s Position at NHC

 

John Farkas:

Gotcha. Talk a little bit about how your position now at NHC is set up within the organization. Who do you report to? What are the functions that report up to you? How’s that set up?

 

Andy Flatt:

Sure. Well, I joined NHC seven years ago. I’ll start my eighth at the turn of the year. And NHC had a history of using technology and computers. In fact, Dr. Adams and our chief nursing officer at the time, Judy Powell, created the first computer record in the nursing home industry computer assessment tool in the industry. So, we had history of being pretty innovative with our technology.

When I joined, it was at a time where Steve Flatt, who I report to, had just become the CEO. He had been at NHC for several years but just become the CEO. And understood the need to take technology to new levels. While we had a great background in history with technology, it was an opportunity at a time really to take it to the next level. And we talked really over the period of two years about my coming to NHC before I made the move.

But I do report to Steve, he’s the CEO of the company and I have responsibility for all things technology currently InfoSec and cyber reports up through me, responsible for telecom. So, if it’s a computer or you got a… back in Y2K, we used to say if it’s got a cord attached to it, I guess that’s within the realm of what we’re responsible for. So, that’s my area of responsibility.

 

John Farkas:

Gotcha. Worth mentioning that while you and Steve share a last name that’s a distant relation, not a direct relation, important qualifier for a publicly traded company.

 

Andy Flatt:

That’s correct.

 

John Farkas:

So, talk a little bit about your relationship with Steve and how you guys work and collaborate.

 

Andy Flatt:

Yeah. It’s interesting. And I’ve tried to, I get up every morning and think, I tell Steve, “Well, first of all, if our name’s not in the newspaper in a bad way, that’s been a good day for yesterday.” But I came to NHC. NHC has a great reputation. I’ve known of NHC for decades.

But really, you go to work for people that happen to be at places. And so, when I came to Steve, we early on established a, how do we want to work together? What are the areas of responsibility? And so, he has placed a trust in me. And that’s probably one of the most important things to me, is to never do anything that compromises that trust.

I tell the story sometimes. He uses a story of a rubber band with tension. He said, “We’re here and we need to be there. But if you stretch a rubber band too much, you break it. So, it’s the wisdom of knowing how to make incremental change, create a little tension, let the tension ease, then go to the next level.”

And so, that’s our style of communication. I sit at the senior table, so I report to Steve, but all of the other peers and partners that are at that table are critical to the way we run IT. Every person at that table is very involved. So, one of the things we established early on with Steve, historically, I guess in a lot of companies, everybody had their own swim lanes. So, each person at the table had their lane.

I look at things now and the way we work together is you take those swim lanes out of, it’s just one big pool that we all generally know our area and the direction that we swim in. And I say we, I’m talking about the people at the senior table. But we’ve got to be involved in each other’s areas because everything touches everything and technology. And Steve was very supportive of this in the beginning. He said, “Technology’s touching everything we do.”

So, he’s been very good and the board’s been good, and senior management’s been good to help govern, help support, help fund technology initiatives. And it’s a very collaborative environment here.

 

Critical Concerns in the Eldercare Space

 

John Farkas:

I’m not surprised to hear that just with a lot of what I’ve heard. And the moves that you guys have been making, it does require a lot of unity and this is a critical time for that type of coordinated direction. As I look at all of the vectors that are conspiring right now around the elder care, senior care space, if I were to look at a set of words that would be, the words that come to mind are labor and shortage and compliance and budget. And if I were to factor those in as critical concerns of your space, I’ve got to think that those are the big ones. Am I missing anything?

 

Andy Flatt:

No, you really hit the nail on the head. When I joined NHC, this was while I’ve been in healthcare my whole career. This was my first foray into the post-acute world or the long-term care world. And I thought healthcare is healthcare until I got here. And the way nursing homes are regulated and the way you do business here is a pretty complex and challenging environment.

You’re right. I guess our biggest challenge particularly post-pandemic has been labor. I think the acute care setting in the hospitals have probably pretty much come back. Our space has not, I forget the number of our industry leaders that say, “Here’s how many thousands of jobs that were vacated during the pandemic that still have not come back.” One of the challenges is… and I was just reading a thing over the weekend about Elon Musk talking about one of the biggest crises we have is there’s not enough people being born right now.

And so, if you look out years in advance, there’s just not going to be enough people to do the work in the historical ways with which we’ve done them. You can look at that glass half empty and you better start looking pretty quickly, glass half full in order to do something about it. But I think there’s three big things in our industry. Labor’s a big piece of it. We’ve got shrinking labor.

There is shrinking reimbursement in our world. The government is one of the big payers. They’re shrinking and tightening reimbursement. And then, there’s increased regulation. So, I know we’ll talk in a minute about what we’re trying to do about all those things, but that’s the trifecta of headwinds, of labor, reimbursement and regulation.

 

John Farkas:

Yeah. So, as you look at that and try and think through how as an organization… because sustaining an organization with those headwinds is not easy. I mean, those are some pretty determined forces that are conspiring against you. We all know, looking at this right now, I’ve never seen a time in healthcare where there’s been more. It used to be just a couple years ago where people… when you started talking about technology that could replace people’s jobs, that was a threat. Now, it’s a necessity, right?

It’s moved pretty quickly from that, that we’re not going to talk about that. If it’s tech that’s going to take headcount, we can’t really say that. And now it’s like we’ve got to look for ways we can effectively support our labor force in ways that are effective and are going to be compliant and are going to end up helping us care well for the populations we’re charged with. How would you describe the shape of the challenge and how are some of the ways that you guys are looking to solve it?

 

Andy Flatt:

I agree with you. That’s the challenge. I think about our business, our industry and distill down really to two words, which is accuracy and dignity. And accuracy comes in the form of a lot of things, but it’s how do we take care of our patients very well? How do we make sure their health is taken care of, their wellbeing, that we feed them?

We take care of every basic necessity, particularly in our nursing facilities. So, how do we do that well? And so, the accuracy piece. And then, the dignity side of that, which is very personal and people-intensive, is how do we make sure we’re meeting the needs of our patients in the ways that only people can? Back to the accuracy side, I think there’s a lot of things that we have people doing now that technology can do.

And it is already starting to replace some people jobs going forward. I would drop back and say, “I don’t look at that as a negative because we don’t have enough people to fulfill. We don’t have enough people. So, if we can free up some of their time with technology, that just lets them do the things that only people can do.” But I think some of the things that we’re looking at or what are those things, those repetitive tasks that can be replaced with technology, things like vital sign monitoring, which is done by people now that can be done with wearables, with sensor technology, telehealth that lets us do a lot of things that lessen the need for specific people.

One of the things we’re testing now, this is just a very simple thing, but we’re testing in our assisted livings, robotic waiters in the dining hall. So, rather than a person, two or three people managing a dining hall and somebody running back and forth to the kitchen to bring out plates, the robots that do that now. And that save a lot of money. It’s interesting, I saw a demonstration of that. One of the first questions was, “Well, first of all, is that threatening to the people?”

And the answer was, “No. They love having it because it helps them.” And then, it was, “How well is that type of technology received by your constituents, your patients, our average patient’s 82, 83 years old? And are they intimidated by technology?” And the answer was, “No.

They love the robots. In fact, they gave them names and they interact with them.” So, I just think you’ll continue to see a lot of change with technology. I will mention one of the things that’s a problem we have with turnover, first of all is, how do you keep the people that you already have and not lose them? I would say one of the things that’s very special about our culture that hopefully goes toward retention is every day we have what we call standup. This was developed years ago here, following the Ritz-Carlton model.

We have 13,000 employees that every day if you’re working, you’re going to stop and spend five minutes and you’re going to hear the same talk. They’re 20 talking points. And we’re going to hear the talking point of the day and then some announcement-type things. But every day part of our culture is to get together and our employees, and we don’t call them employees at NHC, we call them partners. All of our partners, all 13,000 are getting together every day and hearing the same message of our culture, of taking care of that patient, which I think is a very important piece certainly to our model and to our retention.

 

John Farkas:

Yeah. Especially with the pressures that they’re all facing right now. The consistent reminders that what we’re about is caring for people is an important underscore I think for anybody in healthcare right now because it is a charged environment and the pressures are real, the administrative weight is real. The continuing focus on how are we going to keep focused on the fact that these are people that we’re caring for? It’s just so important. And to that end, as I look at all the graphs that are facing the healthcare in general, but certainly when we’re looking at the aging population, you’ve mentioned some of the things you’re doing just right now in a pragmatic way, but as you’re looking at that, the wave that’s coming, because anybody who’s looked at the graphs know that it’s an impossible looking equation right now in the current paradigm.

But what are some of the things that you guys are doing to prepare for the continuing increase in need, demand, capacity, all the elements that we know are coming as the baby boom continues to age into that sector?

 

Andy Flatt:

Yeah. You’ve outlined the pressure is, I mentioned earlier all the things that are negative headwinds. Yet with the baby boomer generation particularly, there are what, 10,000 people aging into Medicare every day. So, that means in 10, 15 years they’re our patient. So, you’ve got all this headwind, yet you’ve got this silver tsunami of people that are going to need our care. One of the things we’re looking at is we’ve got a significant home care division, for example, and that’s becoming… there are more and more things we can do working in the home that keep people at home longer, aging in place, which is very important.

So, I mentioned earlier, sensor technology, telehealth, all the things that let us take care of somebody so that they really don’t end up in our skilled nursing facility until the acuity is very, very high and they need assistance. And so, they come to our facility. So, we’re looking at that for the future that says, “How do we make sure the how sick… or the acuity of that patient, how sick they are, is going to be much higher in the future when they finally do come to us. Back to the technology things that we can use, how do we make sure we can take care of them and have the skill that we need to do that?” And technology and devices play a big piece in that.

But there’s a lot of other little simple things that just historically have been done, and it’s not unique to the post-acute space. I’ve got a daughter that’s a NICU nurse in a hospital, in a big hospital chain and things like scheduling, you’d think, “Well, that’s office obviously very automated and very easy for a worker to do, and it’s not there anymore than it is in our world.” And so, one of the things we’re doing to make it easier for our partners is use of mobile devices and personal mobile devices.

And if we need somebody on a shift, how do we put the word out? There’s an opening. And so, that we’ve got the way to take care of that, which before would’ve been print out a piece of paper and get on the phone and start calling. So, I think mobile apps are going to be a huge piece of our future that let us just be much more efficient in how we’re taking care of our patients.

 

Challenges with Implementing New Technology

 

John Farkas:

Gotcha. So, what are some of the challenges as you look at integrating new technology and knowing that you are lots of facilities, lots of different infrastructure frameworks, different setups that I’m sure that you’ve been in some degree of process over the last seven years and trying to bring some order and uniformity to, as you look at all of those elements, what are some of the challenges NHC faces in integrating and adopting newer technology?

 

Andy Flatt:

I think just purely at the beginning on an infrastructural level, we’ve moved a lot of our systems to the cloud. And so, now-

 

John Farkas:

That’s been a big part of your initiative over the last seven years is that cloud migration?

 

Andy Flatt:

Exactly. Historically, we’ve had a lot of developed software over the years. We’ve been around a long time. Well, we wake up and all of that’s in-house and its custom-developed. And so, we’ve been on a journey to go best debris third-party cloud first going forward, and we’ve had a lot of success doing that.

Well, what that does is create a dependency on access to the internet and wireless access in many cases because for example, we do point of care service with a little tablet that the caregiver takes in the room and interesting. So, the first piece of dealing with the challenges to make sure we’ve got critical infrastructure in place that lets us access the internet. How do we have primary dedicated lines? How do we have secondary dedicated lines? If we’re offline, for example, in a lot of institutions, the worst thing that can happen is you lose money.

In healthcare environment, the worst thing that can happen is you can kill somebody if you do the wrong thing, if you don’t have the meds. So, a lot of backup, but infrastructure is a big piece of that. I would say going forward a lot of the other… it’s exciting and it’s also scary, is what is the role artificial intelligence is playing in the society today and in healthcare and specifically in our world. So, we’re looking a lot at how artificial intelligence can be used. We’ve used it over the past probably two or three years.

For example, our electronic health record has falls detection built in. That was AI driven. What’s ramped up particularly in the last year, is use of gen AI or generative artificial intelligence. And we’re starting to have those conversations. We are having it at management levels, at board levels because there’s a lot of oversight, particularly in public companies now.

There’s a requirement that went into effect in July that lays out a couple of things. Number one, if you have a material incident, you’ve got four days with which to report it. But then, there’s oversight of risk that’s at the board level now as part of their duty of care, certainly at a management level. And so, while it’s exciting, all of these things that AI can do, you’ve got to balance that for all the negative things and the cyber things that can happen that can take you down pretty quickly.

 

Partnering with Solution Providers

 

John Farkas:

Gotcha. Yeah. It’s just is the now concerns and if you add privacy in all of what needs to happen in the context of AI around that vector too, there’s a lot to consider as organizations like yours move forward I know. And you’ve shared with me before that you really look at… you’re not necessarily looking for vendors to help with your considerations. You’re looking for partners, which I know is an important way to look at it.

And I hear this over and over from people in similar positions as yours. You can’t just look at a tech solution. You have to look at somebody who’s willing to come alongside of you and join you in the effort. And whatever that implementation looks like, whatever the ongoing success framework for that technology looks like, it’s really important that that is a partner agreement where you’re joining together on a mission together. And so, as you look at that and you consider partnering with solution providers, what are some of the most valuable things you’re looking for in that?

 

Andy Flatt:

Well, obviously when you’re looking at assume we find a solution that meets our needs, who is the company? What’s their background? How big are they? Our electronic health record, when we went in search of that, there were a lot of smaller vendors and smaller players that in the past we might’ve taken a look at it. We might’ve considered.

But now particularly because on the software side, we’re relinquishing control of, even though we still have responsibility for the cyber, for example. So, if somebody’s in the cloud, well, what cloud? If they’re in Microsoft or Google or Amazon, well then inherently they’re at a different level than if they’ve got their own little private cloud doing their own thing. So, first of all, the size and the magnitude of the companies that have solutions, we go pretty deep in vetting them. I will say one of the things that’s been very helpful to me over my career is that the network and being associated with all the different peers that I have in Nashville and in healthcare, a lot of bigger companies, they’ve got huge departments that do nothing but vet these types of solutions and vet the security around them.

And so, just the opportunity to have that conversation with somebody at another entity bigger than ours that has done that homework, then we can often ride the coattails and share that. But we do look at, it’s a relationship first and foremost, I think. So, do we have the relationship with the key leaders at that solution provider that we’re looking at? And you’re not just buying a solution you’re living with and paying for a toll on the end of it and putting a new technology just the beginning. You got to use it and have ROI and have relationships to be able to continue that.

 

John Farkas:

Can you share an experience with when a partner exceeded your expectations?

 

Andy Flatt:

Yeah. I think back, and this is years ago, and I was at a company where we put in some… we tried to be leading edge, not bleeding edge, and it turned out we were putting in a technology at the time that ended up being pretty bleeding edge. And it was a company of size, I won’t mention the name. It was a big company. But the particular person that was our representative who we had the relationship with, we had some problems that things just didn’t work as they were supposed to. And that partner, that particular person showed up.

It was a piece of hardware that wasn’t working. And when it didn’t work, he showed up on our door with a truck, with the replacements for what wasn’t working, and he made it whole. And that’s 20 years ago now. That was my first, I’ve been a CIO 23 years now, and I think that was year two. And I was probably in over my head on a lot of things.

But we had that relationship and he came in and he made it right. And that’s always stuck with me of how not only to do business with the partners, but how I wanted to be perceived as well.

 

John Farkas:

How about conversely, because that’s important, right? I mean, it’s not just about the integrity of… well, I’ll say it this way. The integrity of a solution extends past the software.

 

Andy Flatt:

Yes.

 

John Farkas:

Right. It goes past that into how you’re willing to stand with it, support it, be there when… because something’s going to go wrong. It’s not a question of if it’s a question of how and when and the ability to jump in and make it right as quick as possible. The variables are too many to ensure a 100% success.

But when something does go wrong, having a relationship and a person and an accountability that means we’re going to get this solved quickly. How about the other side of that? Have you had an experience where it’s clearly fell short and you’ve been in a compromised position as a result?

 

Andy Flatt:

Yeah. There’ve been a couple of key specific major enterprise software applications that when we got into it, one was just really too early stage of a company that we adopted. They had some great ideas and great thoughts, but it just wasn’t working out. So, we had to figure out a way to exit that. And then, another was a pretty significant company, a large company providing services that, again, they brought a product to market that was a little early stage. It turned out to be the one they’re going with now through acquisitions, these companies came together.

But both times, I would say some lessons learned from that would be number one, how do we make sure we’re building into a contract that if we have something that doesn’t go the way we hoped it would, that we’ve got some out. Now, that said, you can’t contract your way through everything. It’s about the relationship as well. But the contract is very, very important. And I would say another lesson learned, and I’ve learned this over multiple places, is that when you bring in particularly software solutions, often the desire is, well, how do we customize that software to do things the way our business does?

And for probably the first half of my career, I would’ve said that’s very important that a vendor or a partner needs to be able to adapt to custom ways of doing things. I’ve switched my thoughts on that, particularly on standard things. Now, if it’s a very niche type software, that’s one thing. But things like payroll, things like ERP, EHR, our electronic health record in many cases is help communicate the change to the business and work with the vendor that says, “If we’re buying this for a very specific reason from somebody we think’s an expert, then let’s not try to customize their software and be off grid so much just to meet our needs.” If one of the most successful implementations we’ve had here was an EHR in an area and the leader said, “Listen, if we do things different than the way than the software does it.

We’re switching. We’re buying this software for a reason. Let’s use it for what it’s intended.” So, I would say keeping that in mind can help sometimes avoid some not so fun divorces through contract. And then, the last thing I would say, and this is just a trend.

Often you do very long three, five-year contracts on things because you get discounts and you want the relationship to be longer. I’m not so sure you’ll see folks in the future doing very limited contracts, one-year contracts because things are changing so rapidly right now. A year from now, you don’t want to wake up and say, “Well, I’d love to make a change, but I’ve still got two or four years left in the original contract and I don’t have the flexibility to make a change.” So, you got to balance that. Do I have a long-term, short-term contract? So, that you don’t get in those positions where you’re trying to have a divorce.

 

What NHC Is Looking For with Solution Providers

 

John Farkas:

Yeah. I know that that is certainly the flexibility continues to be a theme I’m hearing. And to your point, there’s so much change going on so quickly right now. Ideally, you’re working with vendors who are able to stay on top of that and help you navigate into that change instead of being something that needs to get out of your way. But in those situations where a new way of doing things is jumping in and taking up an opportunity, you’ve got to have the flexibility to be able to move with that right now for sure. If a tech company were to approach NHC with a solution, what are the things you would like to see them consider?

When you’re going to an organization’s website, and I know that you’re hearing about solutions typically, a lot of times through peers, maybe through at an event or something like that, and you’re doing your initial exploration, Andy. What are some of the things that you’re looking at? And how they articulate themselves that help you know that they’re on the right track or help you know that they are at least approaching things in a way that give you the confidence to take the next step forward? What are some of the things that help you instill that confidence that they might be a good solution? What are you looking for?

 

Andy Flatt:

Well, I think you mentioned the most important thing in the question, which is part of the relationships of others that may be doing something or using something. I depend very heavily on that network. Rarely are we looking for something that we’re looking for and nobody else ever has. So, I certainly leverage that network to find best practices and solutions. So, that’s a great start.

I think the other side of it, when I’m going to a website or when I’m looking deeply into what somebody can offer is what is their knowledge of and experience in if applicable into our business? And how well do you know our business? I’ll mention one particular software we’re implementing now, and we’re rather early stage with it because this product has not launched yet. We’re going to be a pilot in a beta setting, which is very unusual for us to do. But as we looked into the solution and we’re looking for a solution in that area, this person worked in our space, not in the software business.

They actually were an operator and ran the area that we’re trying to find solution for. And they saw a need and said, “We don’t think the options out there are good.” So, they went and started a company. So, the only reason we gave them a look and we’re looking to do pilots is they had a deep understanding of the space. And I think that’s probably one of the most important things is… or either having knowledge of the space or of the area that you’re trying to solve a solution.

In electronic health records, for example, very deep of, there’s generic things you do, but can you help us in our nursing home environment? Do you understand that? And so, knowledge and depth in that knowledge, certainly credibility. I put a lot of stock in key folks that I’ve worked with that may have gone to another company and they’ll call me and they’ll tell me, “We’re offering a solution.” I know they’re not going to call me just because they’ve got a quota and they’ve got to make calls.

If they’re calling me and it’s a great relationship, I put a lot of stock in the value of the quality of what they offer or they wouldn’t have gone to work there. Conversely, a lot of folks reach out to me in a product and I’ll have a relationship with somebody. And they get a call from yet another person that says, “Hey, I’m your agent and from this company.” And I thought, “No, you’re not. I’m already doing business with you and you don’t even know that.”

So, some of these organizations in the left hand doesn’t know what the right hand’s doing gives me pause. So, you don’t really know us. You don’t know our business that well.

 

John Farkas:

Yeah. So, I hear that pretty often and it’s certainly a hard thing to do. And I think worth the time and attention that it takes to get that understanding because if I’ve heard it once, I’ve heard it a hundred times. If you’ve talked to one healthcare provider organization, you’ve talked to one healthcare provider organization. They’re unique elements to each, and the challenges are unique in there. And that’s where having that context and having some good knowledge of the organization you’re working to get the attention of is important.

And I think that that’s what I hear you saying is know us at some level because your time is limited and too many opportunities to chase wild hairs. So, what I know is you’ve already mentioned it a couple times. I mean referrals, folks that you know, the direct network that you’re accessing people and relationships are a good way into what you’re doing. And so, to that regard, I know one of the critical elements, and we work with our clients, we work and say this frequently, one of the most important elements you can have in your marketing approach is a good set of third-party validation, organizations who are willing to show how your solution is directly benefiting and providing value for their organization. And that’s a super-critical underscore.

But what are some of the channels that you are frequently tuning into? What are some of the publications? What are the different ways that you’re looking for new ideas?

 

Andy Flatt:

That’s a good question. And there’s a wide variety just in our industry. There’s the AHCA, the association that is part of our industry, they put out a lot of great material. There’s a daily email we get that here’s what’s going on in the industry. The other standard things like Becker’s, I get the IT piece.

I look at the financial piece, the Becker’s for CFO, and one of the Becker’s for CIO, I look at both of those. And then, I’m involved in several organizations that I get great value out of. One for example is there’s a national footprint from Inspire. And they have 23 chapters of which TennesseeCIO is one of those. We have 50 something CIOs in the Tennessee from Memphis to Bristol and everything in between, but there’s over 1,100 now national CIOs.

And that organization, we all have access to each other. And these are the who’s who as far as companies you’d recognize most of them, if not all of them, but I’ve got direct access to their CIO that I can contact and collaborate with. There are other conferences I go to. I go to a lot of, and I’ll typically go to everyone I’m invited to. I’m going to one Wednesday night of this week and I’m going to one Thursday night of this week.

One zone specific deep discussion in the world of cyber and AI and the others, most everything I go to right now is AI-related. But I go to those, there’s some other organizations I belong to. So, the challenge is you could spend 40 hours a week attending and researching these things. What’s the balance of doing your homework and then actually getting some work done?

 

John Farkas:

Yeah. I know that those are definitely important. Any time you have the opportunity to network at high levels like that, that ends up being a really critical link and thanks for sharing that. And that’s Inspire Leadership Network, is that the organization you were mentioning before?

 

Andy Flatt:

InspireCIO is the name of it. It’s now international. They’ve gone outside of the US. And then, Tennessee is one of 20 something chapters. TennesseeCIO.

 

John Farkas:

Gotcha. How about publications what are some of the… you mentioned the Becker’s. Are there any journals or things that you’re keeping abreast of?

 

Andy Flatt:

Yeah, those are the Becker’s CIO. I just get a lot of them. I put more stock in talking with folks than I do just reading about things. But the ones I mentioned are the ones I go to every day and then others as they surface.

 

John Farkas:

How about other reading? What’s on your bookshelf right now, Andy?

 

Andy Flatt:

I have about two or three things going at any given time. I just finished last week Isaacson’s book on Steve Jobs. I did one on Musk before that. I like a lot of biographies or autobiographies. And then, leadership. I just finished Brene Brown’s Dare to Lead. And in fact-

 

John Farkas:

That’s a great book.

 

Andy Flatt:

… we’re going to do a book club in my leadership team and go through that. Just spend a lot of time on leadership-type things, how can we get better? And then, the other side of that is technical things. I’ve got a huge 600-page book from Jim Maholic called IT Strategy and a lot of great stuff in there. So, I skipped around. I do a lot of windshield, Tom, I work in Murfreesboro, I live in Nashville, so I’m an audible fan. I listen to a lot of books.

 

Anticipating NHC’s Future Development

 

John Farkas:

Gotcha. If you were to future cast for us and talk about what you would anticipate being the biggest visible difference where your organization is today versus let’s say three to five years from now, what would you anticipate being the most discernible thing that’s different in how you’re doing things in the context of NHC in the IT side?

 

Andy Flatt:

Well, if I knew the key answer to the right way to do that, I would’ve do a lot of investment in some people’s stocks. But I think, and I’ll harp back to, our culture is what has made us who we are. I think we’ve got a good name in the industry and a lot of that’s because of our culture. So, going forward, we don’t want to quash that culture. But we also understand that we’re going to have to change and transform and be willing to continually do that.

And I think in the next three to five years, that’s going to come in the form of investing in automation and innovation through technology. I think it’s going to be very involved on the regulation side and advocacy. And we’ve got a lot of folks, I’m not as involved in that as our company. We’ve got a lot of folks that are working on that to help with the regulation piece, which is a huge headwind.

 

John Farkas:

Yeah. The regulations have got to open their doors to some of the automation and the opportunity for innovation that we’re going to see necessitated for sure.

 

Andy Flatt:

I’ll tell you a specific example of the nursing home industry is the only regulation that requires a certain staffing ratio. We have to have a certain number of LPNs or RPNs per patients. We’re the only part of healthcare that has that that I know of. And the headwind is the current administration is proposing more of that at a time where telehealth, for example, and other things can get by with less of those people because there’s the innovation taking over. So, while we can do more with less, there’s a requirement to have more people.

And so, that’s a conflict right now that’s got to be figured out. Another piece is we are the Medicare Advantage area. We’re actually a provider. We have started what’s called a special needs planned, where our long-care patients in our facilities actually we are their provider in three states and we’re growing that. So, that’s something that’s I think you’ll see a lot more of.

And then, one of the things I mentioned very early on, we have historically offered some services to some third-party folks. Way back in the day, we had some divestitures that said, “Well, we sold off some of our assets.” But they said, “We’d still like to have access to your systems and use those.” And they did. We’ve never really marketed that.

We have launched just this year a company called Tranzion, T-R-A-N-Z-I-O-N. Our website’s up and running, and we’re really doing a soft launch right now. But it’s seeking to really brand what we’ve done naturally, but really haven’t marketed in the past and be pretty bold in going in marketing to particularly smaller and more family-owned type nursing home businesses. So, there’s a lot of independent providers out there that don’t have IT shops, for example. They don’t know how to do… or there’s challenge with revenue cycle management.

So, we’re going to be offered them those services as we try to get very good about offering them to ourselves. We think there’s a market out there that we can start offering that to others. So, I think in three to five years you’ll see that brand growing and hopefully having some good traction.

 

John Farkas:

That’s awesome. One of the things we talk about a lot, and it’s important in any of this, any time of change, which is always, we have a huge opportunity right now to change some fundamental ways we’re doing things. And we have a huge need right now to change a lot of how we’re doing things. And when you’re a technology company, when you have a truly innovative solution, a big piece of what you have to do to help the market meet where you are is help them know how to think differently. And not underestimate how much work it’s going to take to get an organization who’s been doing things a certain way for a long time to move into a full new way of operating on a different… what does it mean?

What does automation mean in X, Y, Z sector? How is that going to actually work? How are we going to ensure that it works? Because we can’t. When we’re dealing with people and with human lives, we can’t afford to experiment. This isn’t an experiment.

It has to work. And so, what are we going to do together to ensure success? How do we need to think about it? How do we need to reframe what we’re doing? And if you’re bringing change, if you’re bringing the opportunity to do something really different, don’t underestimate what it’s going to take to bring organizations along with you in that change.

Be a partner. Help them partner toward that and understanding that and lock arms with them and be willing to walk with them in that process. And if you’re not, it’s going to be really hard because changing a 50-year-old organization with a really innovative frame is always going to involve some challenge, right?

I mean, there’s always going to involve some inertia that you need to overcome. And that’s the anatomy of a good partner is showing how you’re going to be willing to do that and join as a partner with an organization towards something that’ll be successful. Andy, thanks for joining us today. Any final thoughts as we wrap up here?

 

Andy Flatt:

No. I appreciate being with you today. Appreciate what you’re doing in the technology community at large in this area, and any opportunities like this to get the word out and share is greatly appreciated.

 

Closing Thoughts

 

John Farkas:

Well, I appreciate your time. Andy Flatt, CIO of NHC. Thanks for joining us today on Healthcare Market Matrix.

 

Andy Flatt:

My pleasure. Thank you.

 

Outro:

Healthcare Market Matrix is a Ratio original podcast. If you enjoyed today’s episode, then jump over to healthcaremarketmatrix.com and subscribe. And we’d really appreciate your support in the form of a five-star rating on your favorite podcast platform. It does make a difference. Also, while you’re there, you can become a part of the healthcare Market Matrix community and get access to courses and content that’s created just for you by signing up for InsightSquared, a monthly newsletter dedicated to bringing you the latest health tech marketing insights right to your inbox.

Ratio is an award-winning marketing agency headquartered in the Nashville, Tennessee. We operate at the intersection of brand and growth marketing to equip companies with strategies to create meaningful connections with the healthcare market and ultimately drive growth. Want to know more? Go to goratio.com. That’s G-O-R-A-T-I-O, dot com and we’ll see you at noon central next week for an all new episode from our team at Ratio Studios. Stay healthy.

Introducing Andy Flatt

 

John Farkas:

Hello, everyone, and welcome to Healthcare Market Matrix. I’m your host, John Farkas. And I’m eager to jump in today’s interview because today we have the chance to talk to Andy Flatt. And Andy currently serves as the Senior Vice President and Chief Information Officer for National Healthcare Corporation, or otherwise known as NHC. As I’ve interacted with folks who know Andy and just getting in preparation for our time together today, I asked them to tell me a little bit about how they would characterize him and his style of leadership. And the thing that emerged over and over in my conversations is the idea of servant leader.

As I imagine the role right now of a CIO and in a healthcare organization in today’s climate, I don’t know of another way to approach it right now. There’s a lot going on. It is a high-pressure environment. And success in that role, I got to think means climbing in there, elbow to elbow and being willing to work. And that’s a lot of what I’ve heard of Andy’s approach.

So, what I know about NHC is that it’s the nation’s oldest and among the largest publicly traded long-term healthcare companies. And I’m going to have Andy tell us a little bit more about the scope of that organization here in a minute. But I want you to know, Andy comes to his role really honestly. He spent somewhere in the neighborhood of 40 years in a combination of public and private healthcare organizations, including more than 20 years as a CIO. And he’s served in executive leadership roles at Corizon Health and at Cigna HealthSpring at AIM Healthcare, which is now a division of Optum and Baptist Healthcare System, which I think is now a division of Ascension.

And Andy, I’m looking forward to learning more about what you are facing now as you’re looking at the horizon and the role you see technology playing in the future of NHC. So, welcome to Healthcare Market Matrix.

 

Andy Flatt:

Well, thanks, John. It’s a pleasure to be with you this morning. Appreciate that introduction.

 

John Farkas:

Yeah. So, as I mentioned, tell us a little bit about the scope of NHC and the number of locations, coverage, stuff like that.

 

Andy Flatt:

Sure. Well, NHC has been around… you mentioned our public nature, and we’ve been around for a while. We’re in our 52nd year. Dr. Carl Adams started this company back in the ’70s. He mortgaged his own house to buy some nursing homes that were in trouble and grew this very humbly into what it is today.

NHC has 68 skilled nursing facilities. Nursing home would be the old term for that, and that’s a primary area of business for us. But in addition to that, we’ve got assisted living communities and dependent living. We have three behavioral health hospitals that we either joint venture in or own ourselves and run 35 home care agencies, 29 hospice agencies, memory care, pharmacy, rehab services. A lot of things going on in the senior care space.

One that hopefully we’ll talk a little bit about later is we’re doing more in providing our services in a management services type provider situation where we’re offering our services to other senior care companies. So, that’s a new division that I’m very excited about.

 

John Farkas:

Gotcha. So, tell us a little bit about your time leading up to your time at NHC. Tell us what kind of color between the lines a little bit and talk about the road that brought you here.

 

Andy Flatt:

Sure. Well, I’ve been in Nashville my whole career, which is now 40 years this year. I went to Lipscomb University and studied computer science, but my first job right out of school was as a software developer in a renal or kidney care setting. And I say that because that’s where I cut my teeth on what we call electronic health records today. You didn’t call it that back then, but it was clinical systems that took care of patients. And that’s 40 years ago.

So, I started as a developer. And I’ve stayed in healthcare my whole time, had the opportunity to do management at Baptist Healthcare, was an entrepreneur in between when I started starting in healthcare, we started in the HR company that just sold recently. So, it’s been around since the late ’80s. And I mentioned those companies because I would say one of the things that… or two people that have shaped my background and my thought on things more than any, first I guess would be my father. My father’s a small town minister.

And the servant leadership that he showed is where that’s in my DNA and where I have a passion about serving other folks. I would say the other is the word passion because Dr. Victor Paul, he passed away a few years ago, he was my mentor at DCI. And then, when we started business, he was a partner of mine. He was an expert at the time on lupus and kidney disease, a South-African born, fiery doctor.

And the main thing he stressed in my life, he said, “Have a passion. I don’t even care what it’s about, but do you have a passion and do you have a fire in your belly?” And that goes back to the ’80s and ’90s when we were working together. So, I would say those two have had as much influence on my career and direction as any.

 

A Look into Andy’s Position at NHC

 

John Farkas:

Gotcha. Talk a little bit about how your position now at NHC is set up within the organization. Who do you report to? What are the functions that report up to you? How’s that set up?

 

Andy Flatt:

Sure. Well, I joined NHC seven years ago. I’ll start my eighth at the turn of the year. And NHC had a history of using technology and computers. In fact, Dr. Adams and our chief nursing officer at the time, Judy Powell, created the first computer record in the nursing home industry computer assessment tool in the industry. So, we had history of being pretty innovative with our technology.

When I joined, it was at a time where Steve Flatt, who I report to, had just become the CEO. He had been at NHC for several years but just become the CEO. And understood the need to take technology to new levels. While we had a great background in history with technology, it was an opportunity at a time really to take it to the next level. And we talked really over the period of two years about my coming to NHC before I made the move.

But I do report to Steve, he’s the CEO of the company and I have responsibility for all things technology currently InfoSec and cyber reports up through me, responsible for telecom. So, if it’s a computer or you got a… back in Y2K, we used to say if it’s got a cord attached to it, I guess that’s within the realm of what we’re responsible for. So, that’s my area of responsibility.

 

John Farkas:

Gotcha. Worth mentioning that while you and Steve share a last name that’s a distant relation, not a direct relation, important qualifier for a publicly traded company.

 

Andy Flatt:

That’s correct.

 

John Farkas:

So, talk a little bit about your relationship with Steve and how you guys work and collaborate.

 

Andy Flatt:

Yeah. It’s interesting. And I’ve tried to, I get up every morning and think, I tell Steve, “Well, first of all, if our name’s not in the newspaper in a bad way, that’s been a good day for yesterday.” But I came to NHC. NHC has a great reputation. I’ve known of NHC for decades.

But really, you go to work for people that happen to be at places. And so, when I came to Steve, we early on established a, how do we want to work together? What are the areas of responsibility? And so, he has placed a trust in me. And that’s probably one of the most important things to me, is to never do anything that compromises that trust.

I tell the story sometimes. He uses a story of a rubber band with tension. He said, “We’re here and we need to be there. But if you stretch a rubber band too much, you break it. So, it’s the wisdom of knowing how to make incremental change, create a little tension, let the tension ease, then go to the next level.”

And so, that’s our style of communication. I sit at the senior table, so I report to Steve, but all of the other peers and partners that are at that table are critical to the way we run IT. Every person at that table is very involved. So, one of the things we established early on with Steve, historically, I guess in a lot of companies, everybody had their own swim lanes. So, each person at the table had their lane.

I look at things now and the way we work together is you take those swim lanes out of, it’s just one big pool that we all generally know our area and the direction that we swim in. And I say we, I’m talking about the people at the senior table. But we’ve got to be involved in each other’s areas because everything touches everything and technology. And Steve was very supportive of this in the beginning. He said, “Technology’s touching everything we do.”

So, he’s been very good and the board’s been good, and senior management’s been good to help govern, help support, help fund technology initiatives. And it’s a very collaborative environment here.

 

Critical Concerns in the Eldercare Space

 

John Farkas:

I’m not surprised to hear that just with a lot of what I’ve heard. And the moves that you guys have been making, it does require a lot of unity and this is a critical time for that type of coordinated direction. As I look at all of the vectors that are conspiring right now around the elder care, senior care space, if I were to look at a set of words that would be, the words that come to mind are labor and shortage and compliance and budget. And if I were to factor those in as critical concerns of your space, I’ve got to think that those are the big ones. Am I missing anything?

 

Andy Flatt:

No, you really hit the nail on the head. When I joined NHC, this was while I’ve been in healthcare my whole career. This was my first foray into the post-acute world or the long-term care world. And I thought healthcare is healthcare until I got here. And the way nursing homes are regulated and the way you do business here is a pretty complex and challenging environment.

You’re right. I guess our biggest challenge particularly post-pandemic has been labor. I think the acute care setting in the hospitals have probably pretty much come back. Our space has not, I forget the number of our industry leaders that say, “Here’s how many thousands of jobs that were vacated during the pandemic that still have not come back.” One of the challenges is… and I was just reading a thing over the weekend about Elon Musk talking about one of the biggest crises we have is there’s not enough people being born right now.

And so, if you look out years in advance, there’s just not going to be enough people to do the work in the historical ways with which we’ve done them. You can look at that glass half empty and you better start looking pretty quickly, glass half full in order to do something about it. But I think there’s three big things in our industry. Labor’s a big piece of it. We’ve got shrinking labor.

There is shrinking reimbursement in our world. The government is one of the big payers. They’re shrinking and tightening reimbursement. And then, there’s increased regulation. So, I know we’ll talk in a minute about what we’re trying to do about all those things, but that’s the trifecta of headwinds, of labor, reimbursement and regulation.

 

John Farkas:

Yeah. So, as you look at that and try and think through how as an organization… because sustaining an organization with those headwinds is not easy. I mean, those are some pretty determined forces that are conspiring against you. We all know, looking at this right now, I’ve never seen a time in healthcare where there’s been more. It used to be just a couple years ago where people… when you started talking about technology that could replace people’s jobs, that was a threat. Now, it’s a necessity, right?

It’s moved pretty quickly from that, that we’re not going to talk about that. If it’s tech that’s going to take headcount, we can’t really say that. And now it’s like we’ve got to look for ways we can effectively support our labor force in ways that are effective and are going to be compliant and are going to end up helping us care well for the populations we’re charged with. How would you describe the shape of the challenge and how are some of the ways that you guys are looking to solve it?

 

Andy Flatt:

I agree with you. That’s the challenge. I think about our business, our industry and distill down really to two words, which is accuracy and dignity. And accuracy comes in the form of a lot of things, but it’s how do we take care of our patients very well? How do we make sure their health is taken care of, their wellbeing, that we feed them?

We take care of every basic necessity, particularly in our nursing facilities. So, how do we do that well? And so, the accuracy piece. And then, the dignity side of that, which is very personal and people-intensive, is how do we make sure we’re meeting the needs of our patients in the ways that only people can? Back to the accuracy side, I think there’s a lot of things that we have people doing now that technology can do.

And it is already starting to replace some people jobs going forward. I would drop back and say, “I don’t look at that as a negative because we don’t have enough people to fulfill. We don’t have enough people. So, if we can free up some of their time with technology, that just lets them do the things that only people can do.” But I think some of the things that we’re looking at or what are those things, those repetitive tasks that can be replaced with technology, things like vital sign monitoring, which is done by people now that can be done with wearables, with sensor technology, telehealth that lets us do a lot of things that lessen the need for specific people.

One of the things we’re testing now, this is just a very simple thing, but we’re testing in our assisted livings, robotic waiters in the dining hall. So, rather than a person, two or three people managing a dining hall and somebody running back and forth to the kitchen to bring out plates, the robots that do that now. And that save a lot of money. It’s interesting, I saw a demonstration of that. One of the first questions was, “Well, first of all, is that threatening to the people?”

And the answer was, “No. They love having it because it helps them.” And then, it was, “How well is that type of technology received by your constituents, your patients, our average patient’s 82, 83 years old? And are they intimidated by technology?” And the answer was, “No.

They love the robots. In fact, they gave them names and they interact with them.” So, I just think you’ll continue to see a lot of change with technology. I will mention one of the things that’s a problem we have with turnover, first of all is, how do you keep the people that you already have and not lose them? I would say one of the things that’s very special about our culture that hopefully goes toward retention is every day we have what we call standup. This was developed years ago here, following the Ritz-Carlton model.

We have 13,000 employees that every day if you’re working, you’re going to stop and spend five minutes and you’re going to hear the same talk. They’re 20 talking points. And we’re going to hear the talking point of the day and then some announcement-type things. But every day part of our culture is to get together and our employees, and we don’t call them employees at NHC, we call them partners. All of our partners, all 13,000 are getting together every day and hearing the same message of our culture, of taking care of that patient, which I think is a very important piece certainly to our model and to our retention.

 

John Farkas:

Yeah. Especially with the pressures that they’re all facing right now. The consistent reminders that what we’re about is caring for people is an important underscore I think for anybody in healthcare right now because it is a charged environment and the pressures are real, the administrative weight is real. The continuing focus on how are we going to keep focused on the fact that these are people that we’re caring for? It’s just so important. And to that end, as I look at all the graphs that are facing the healthcare in general, but certainly when we’re looking at the aging population, you’ve mentioned some of the things you’re doing just right now in a pragmatic way, but as you’re looking at that, the wave that’s coming, because anybody who’s looked at the graphs know that it’s an impossible looking equation right now in the current paradigm.

But what are some of the things that you guys are doing to prepare for the continuing increase in need, demand, capacity, all the elements that we know are coming as the baby boom continues to age into that sector?

 

Andy Flatt:

Yeah. You’ve outlined the pressure is, I mentioned earlier all the things that are negative headwinds. Yet with the baby boomer generation particularly, there are what, 10,000 people aging into Medicare every day. So, that means in 10, 15 years they’re our patient. So, you’ve got all this headwind, yet you’ve got this silver tsunami of people that are going to need our care. One of the things we’re looking at is we’ve got a significant home care division, for example, and that’s becoming… there are more and more things we can do working in the home that keep people at home longer, aging in place, which is very important.

So, I mentioned earlier, sensor technology, telehealth, all the things that let us take care of somebody so that they really don’t end up in our skilled nursing facility until the acuity is very, very high and they need assistance. And so, they come to our facility. So, we’re looking at that for the future that says, “How do we make sure the how sick… or the acuity of that patient, how sick they are, is going to be much higher in the future when they finally do come to us. Back to the technology things that we can use, how do we make sure we can take care of them and have the skill that we need to do that?” And technology and devices play a big piece in that.

But there’s a lot of other little simple things that just historically have been done, and it’s not unique to the post-acute space. I’ve got a daughter that’s a NICU nurse in a hospital, in a big hospital chain and things like scheduling, you’d think, “Well, that’s office obviously very automated and very easy for a worker to do, and it’s not there anymore than it is in our world.” And so, one of the things we’re doing to make it easier for our partners is use of mobile devices and personal mobile devices.

And if we need somebody on a shift, how do we put the word out? There’s an opening. And so, that we’ve got the way to take care of that, which before would’ve been print out a piece of paper and get on the phone and start calling. So, I think mobile apps are going to be a huge piece of our future that let us just be much more efficient in how we’re taking care of our patients.

 

Challenges with Implementing New Technology

 

John Farkas:

Gotcha. So, what are some of the challenges as you look at integrating new technology and knowing that you are lots of facilities, lots of different infrastructure frameworks, different setups that I’m sure that you’ve been in some degree of process over the last seven years and trying to bring some order and uniformity to, as you look at all of those elements, what are some of the challenges NHC faces in integrating and adopting newer technology?

 

Andy Flatt:

I think just purely at the beginning on an infrastructural level, we’ve moved a lot of our systems to the cloud. And so, now-

 

John Farkas:

That’s been a big part of your initiative over the last seven years is that cloud migration?

 

Andy Flatt:

Exactly. Historically, we’ve had a lot of developed software over the years. We’ve been around a long time. Well, we wake up and all of that’s in-house and its custom-developed. And so, we’ve been on a journey to go best debris third-party cloud first going forward, and we’ve had a lot of success doing that.

Well, what that does is create a dependency on access to the internet and wireless access in many cases because for example, we do point of care service with a little tablet that the caregiver takes in the room and interesting. So, the first piece of dealing with the challenges to make sure we’ve got critical infrastructure in place that lets us access the internet. How do we have primary dedicated lines? How do we have secondary dedicated lines? If we’re offline, for example, in a lot of institutions, the worst thing that can happen is you lose money.

In healthcare environment, the worst thing that can happen is you can kill somebody if you do the wrong thing, if you don’t have the meds. So, a lot of backup, but infrastructure is a big piece of that. I would say going forward a lot of the other… it’s exciting and it’s also scary, is what is the role artificial intelligence is playing in the society today and in healthcare and specifically in our world. So, we’re looking a lot at how artificial intelligence can be used. We’ve used it over the past probably two or three years.

For example, our electronic health record has falls detection built in. That was AI driven. What’s ramped up particularly in the last year, is use of gen AI or generative artificial intelligence. And we’re starting to have those conversations. We are having it at management levels, at board levels because there’s a lot of oversight, particularly in public companies now.

There’s a requirement that went into effect in July that lays out a couple of things. Number one, if you have a material incident, you’ve got four days with which to report it. But then, there’s oversight of risk that’s at the board level now as part of their duty of care, certainly at a management level. And so, while it’s exciting, all of these things that AI can do, you’ve got to balance that for all the negative things and the cyber things that can happen that can take you down pretty quickly.

 

Partnering with Solution Providers

 

John Farkas:

Gotcha. Yeah. It’s just is the now concerns and if you add privacy in all of what needs to happen in the context of AI around that vector too, there’s a lot to consider as organizations like yours move forward I know. And you’ve shared with me before that you really look at… you’re not necessarily looking for vendors to help with your considerations. You’re looking for partners, which I know is an important way to look at it.

And I hear this over and over from people in similar positions as yours. You can’t just look at a tech solution. You have to look at somebody who’s willing to come alongside of you and join you in the effort. And whatever that implementation looks like, whatever the ongoing success framework for that technology looks like, it’s really important that that is a partner agreement where you’re joining together on a mission together. And so, as you look at that and you consider partnering with solution providers, what are some of the most valuable things you’re looking for in that?

 

Andy Flatt:

Well, obviously when you’re looking at assume we find a solution that meets our needs, who is the company? What’s their background? How big are they? Our electronic health record, when we went in search of that, there were a lot of smaller vendors and smaller players that in the past we might’ve taken a look at it. We might’ve considered.

But now particularly because on the software side, we’re relinquishing control of, even though we still have responsibility for the cyber, for example. So, if somebody’s in the cloud, well, what cloud? If they’re in Microsoft or Google or Amazon, well then inherently they’re at a different level than if they’ve got their own little private cloud doing their own thing. So, first of all, the size and the magnitude of the companies that have solutions, we go pretty deep in vetting them. I will say one of the things that’s been very helpful to me over my career is that the network and being associated with all the different peers that I have in Nashville and in healthcare, a lot of bigger companies, they’ve got huge departments that do nothing but vet these types of solutions and vet the security around them.

And so, just the opportunity to have that conversation with somebody at another entity bigger than ours that has done that homework, then we can often ride the coattails and share that. But we do look at, it’s a relationship first and foremost, I think. So, do we have the relationship with the key leaders at that solution provider that we’re looking at? And you’re not just buying a solution you’re living with and paying for a toll on the end of it and putting a new technology just the beginning. You got to use it and have ROI and have relationships to be able to continue that.

 

John Farkas:

Can you share an experience with when a partner exceeded your expectations?

 

Andy Flatt:

Yeah. I think back, and this is years ago, and I was at a company where we put in some… we tried to be leading edge, not bleeding edge, and it turned out we were putting in a technology at the time that ended up being pretty bleeding edge. And it was a company of size, I won’t mention the name. It was a big company. But the particular person that was our representative who we had the relationship with, we had some problems that things just didn’t work as they were supposed to. And that partner, that particular person showed up.

It was a piece of hardware that wasn’t working. And when it didn’t work, he showed up on our door with a truck, with the replacements for what wasn’t working, and he made it whole. And that’s 20 years ago now. That was my first, I’ve been a CIO 23 years now, and I think that was year two. And I was probably in over my head on a lot of things.

But we had that relationship and he came in and he made it right. And that’s always stuck with me of how not only to do business with the partners, but how I wanted to be perceived as well.

 

John Farkas:

How about conversely, because that’s important, right? I mean, it’s not just about the integrity of… well, I’ll say it this way. The integrity of a solution extends past the software.

 

Andy Flatt:

Yes.

 

John Farkas:

Right. It goes past that into how you’re willing to stand with it, support it, be there when… because something’s going to go wrong. It’s not a question of if it’s a question of how and when and the ability to jump in and make it right as quick as possible. The variables are too many to ensure a 100% success.

But when something does go wrong, having a relationship and a person and an accountability that means we’re going to get this solved quickly. How about the other side of that? Have you had an experience where it’s clearly fell short and you’ve been in a compromised position as a result?

 

Andy Flatt:

Yeah. There’ve been a couple of key specific major enterprise software applications that when we got into it, one was just really too early stage of a company that we adopted. They had some great ideas and great thoughts, but it just wasn’t working out. So, we had to figure out a way to exit that. And then, another was a pretty significant company, a large company providing services that, again, they brought a product to market that was a little early stage. It turned out to be the one they’re going with now through acquisitions, these companies came together.

But both times, I would say some lessons learned from that would be number one, how do we make sure we’re building into a contract that if we have something that doesn’t go the way we hoped it would, that we’ve got some out. Now, that said, you can’t contract your way through everything. It’s about the relationship as well. But the contract is very, very important. And I would say another lesson learned, and I’ve learned this over multiple places, is that when you bring in particularly software solutions, often the desire is, well, how do we customize that software to do things the way our business does?

And for probably the first half of my career, I would’ve said that’s very important that a vendor or a partner needs to be able to adapt to custom ways of doing things. I’ve switched my thoughts on that, particularly on standard things. Now, if it’s a very niche type software, that’s one thing. But things like payroll, things like ERP, EHR, our electronic health record in many cases is help communicate the change to the business and work with the vendor that says, “If we’re buying this for a very specific reason from somebody we think’s an expert, then let’s not try to customize their software and be off grid so much just to meet our needs.” If one of the most successful implementations we’ve had here was an EHR in an area and the leader said, “Listen, if we do things different than the way than the software does it.

We’re switching. We’re buying this software for a reason. Let’s use it for what it’s intended.” So, I would say keeping that in mind can help sometimes avoid some not so fun divorces through contract. And then, the last thing I would say, and this is just a trend.

Often you do very long three, five-year contracts on things because you get discounts and you want the relationship to be longer. I’m not so sure you’ll see folks in the future doing very limited contracts, one-year contracts because things are changing so rapidly right now. A year from now, you don’t want to wake up and say, “Well, I’d love to make a change, but I’ve still got two or four years left in the original contract and I don’t have the flexibility to make a change.” So, you got to balance that. Do I have a long-term, short-term contract? So, that you don’t get in those positions where you’re trying to have a divorce.

 

What NHC Is Looking For with Solution Providers

 

John Farkas:

Yeah. I know that that is certainly the flexibility continues to be a theme I’m hearing. And to your point, there’s so much change going on so quickly right now. Ideally, you’re working with vendors who are able to stay on top of that and help you navigate into that change instead of being something that needs to get out of your way. But in those situations where a new way of doing things is jumping in and taking up an opportunity, you’ve got to have the flexibility to be able to move with that right now for sure. If a tech company were to approach NHC with a solution, what are the things you would like to see them consider?

When you’re going to an organization’s website, and I know that you’re hearing about solutions typically, a lot of times through peers, maybe through at an event or something like that, and you’re doing your initial exploration, Andy. What are some of the things that you’re looking at? And how they articulate themselves that help you know that they’re on the right track or help you know that they are at least approaching things in a way that give you the confidence to take the next step forward? What are some of the things that help you instill that confidence that they might be a good solution? What are you looking for?

 

Andy Flatt:

Well, I think you mentioned the most important thing in the question, which is part of the relationships of others that may be doing something or using something. I depend very heavily on that network. Rarely are we looking for something that we’re looking for and nobody else ever has. So, I certainly leverage that network to find best practices and solutions. So, that’s a great start.

I think the other side of it, when I’m going to a website or when I’m looking deeply into what somebody can offer is what is their knowledge of and experience in if applicable into our business? And how well do you know our business? I’ll mention one particular software we’re implementing now, and we’re rather early stage with it because this product has not launched yet. We’re going to be a pilot in a beta setting, which is very unusual for us to do. But as we looked into the solution and we’re looking for a solution in that area, this person worked in our space, not in the software business.

They actually were an operator and ran the area that we’re trying to find solution for. And they saw a need and said, “We don’t think the options out there are good.” So, they went and started a company. So, the only reason we gave them a look and we’re looking to do pilots is they had a deep understanding of the space. And I think that’s probably one of the most important things is… or either having knowledge of the space or of the area that you’re trying to solve a solution.

In electronic health records, for example, very deep of, there’s generic things you do, but can you help us in our nursing home environment? Do you understand that? And so, knowledge and depth in that knowledge, certainly credibility. I put a lot of stock in key folks that I’ve worked with that may have gone to another company and they’ll call me and they’ll tell me, “We’re offering a solution.” I know they’re not going to call me just because they’ve got a quota and they’ve got to make calls.

If they’re calling me and it’s a great relationship, I put a lot of stock in the value of the quality of what they offer or they wouldn’t have gone to work there. Conversely, a lot of folks reach out to me in a product and I’ll have a relationship with somebody. And they get a call from yet another person that says, “Hey, I’m your agent and from this company.” And I thought, “No, you’re not. I’m already doing business with you and you don’t even know that.”

So, some of these organizations in the left hand doesn’t know what the right hand’s doing gives me pause. So, you don’t really know us. You don’t know our business that well.

 

John Farkas:

Yeah. So, I hear that pretty often and it’s certainly a hard thing to do. And I think worth the time and attention that it takes to get that understanding because if I’ve heard it once, I’ve heard it a hundred times. If you’ve talked to one healthcare provider organization, you’ve talked to one healthcare provider organization. They’re unique elements to each, and the challenges are unique in there. And that’s where having that context and having some good knowledge of the organization you’re working to get the attention of is important.

And I think that that’s what I hear you saying is know us at some level because your time is limited and too many opportunities to chase wild hairs. So, what I know is you’ve already mentioned it a couple times. I mean referrals, folks that you know, the direct network that you’re accessing people and relationships are a good way into what you’re doing. And so, to that regard, I know one of the critical elements, and we work with our clients, we work and say this frequently, one of the most important elements you can have in your marketing approach is a good set of third-party validation, organizations who are willing to show how your solution is directly benefiting and providing value for their organization. And that’s a super-critical underscore.

But what are some of the channels that you are frequently tuning into? What are some of the publications? What are the different ways that you’re looking for new ideas?

 

Andy Flatt:

That’s a good question. And there’s a wide variety just in our industry. There’s the AHCA, the association that is part of our industry, they put out a lot of great material. There’s a daily email we get that here’s what’s going on in the industry. The other standard things like Becker’s, I get the IT piece.

I look at the financial piece, the Becker’s for CFO, and one of the Becker’s for CIO, I look at both of those. And then, I’m involved in several organizations that I get great value out of. One for example is there’s a national footprint from Inspire. And they have 23 chapters of which TennesseeCIO is one of those. We have 50 something CIOs in the Tennessee from Memphis to Bristol and everything in between, but there’s over 1,100 now national CIOs.

And that organization, we all have access to each other. And these are the who’s who as far as companies you’d recognize most of them, if not all of them, but I’ve got direct access to their CIO that I can contact and collaborate with. There are other conferences I go to. I go to a lot of, and I’ll typically go to everyone I’m invited to. I’m going to one Wednesday night of this week and I’m going to one Thursday night of this week.

One zone specific deep discussion in the world of cyber and AI and the others, most everything I go to right now is AI-related. But I go to those, there’s some other organizations I belong to. So, the challenge is you could spend 40 hours a week attending and researching these things. What’s the balance of doing your homework and then actually getting some work done?

 

John Farkas:

Yeah. I know that those are definitely important. Any time you have the opportunity to network at high levels like that, that ends up being a really critical link and thanks for sharing that. And that’s Inspire Leadership Network, is that the organization you were mentioning before?

 

Andy Flatt:

InspireCIO is the name of it. It’s now international. They’ve gone outside of the US. And then, Tennessee is one of 20 something chapters. TennesseeCIO.

 

John Farkas:

Gotcha. How about publications what are some of the… you mentioned the Becker’s. Are there any journals or things that you’re keeping abreast of?

 

Andy Flatt:

Yeah, those are the Becker’s CIO. I just get a lot of them. I put more stock in talking with folks than I do just reading about things. But the ones I mentioned are the ones I go to every day and then others as they surface.

 

John Farkas:

How about other reading? What’s on your bookshelf right now, Andy?

 

Andy Flatt:

I have about two or three things going at any given time. I just finished last week Isaacson’s book on Steve Jobs. I did one on Musk before that. I like a lot of biographies or autobiographies. And then, leadership. I just finished Brene Brown’s Dare to Lead. And in fact-

 

John Farkas:

That’s a great book.

 

Andy Flatt:

… we’re going to do a book club in my leadership team and go through that. Just spend a lot of time on leadership-type things, how can we get better? And then, the other side of that is technical things. I’ve got a huge 600-page book from Jim Maholic called IT Strategy and a lot of great stuff in there. So, I skipped around. I do a lot of windshield, Tom, I work in Murfreesboro, I live in Nashville, so I’m an audible fan. I listen to a lot of books.

 

Anticipating NHC’s Future Development

 

John Farkas:

Gotcha. If you were to future cast for us and talk about what you would anticipate being the biggest visible difference where your organization is today versus let’s say three to five years from now, what would you anticipate being the most discernible thing that’s different in how you’re doing things in the context of NHC in the IT side?

 

Andy Flatt:

Well, if I knew the key answer to the right way to do that, I would’ve do a lot of investment in some people’s stocks. But I think, and I’ll harp back to, our culture is what has made us who we are. I think we’ve got a good name in the industry and a lot of that’s because of our culture. So, going forward, we don’t want to quash that culture. But we also understand that we’re going to have to change and transform and be willing to continually do that.

And I think in the next three to five years, that’s going to come in the form of investing in automation and innovation through technology. I think it’s going to be very involved on the regulation side and advocacy. And we’ve got a lot of folks, I’m not as involved in that as our company. We’ve got a lot of folks that are working on that to help with the regulation piece, which is a huge headwind.

 

John Farkas:

Yeah. The regulations have got to open their doors to some of the automation and the opportunity for innovation that we’re going to see necessitated for sure.

 

Andy Flatt:

I’ll tell you a specific example of the nursing home industry is the only regulation that requires a certain staffing ratio. We have to have a certain number of LPNs or RPNs per patients. We’re the only part of healthcare that has that that I know of. And the headwind is the current administration is proposing more of that at a time where telehealth, for example, and other things can get by with less of those people because there’s the innovation taking over. So, while we can do more with less, there’s a requirement to have more people.

And so, that’s a conflict right now that’s got to be figured out. Another piece is we are the Medicare Advantage area. We’re actually a provider. We have started what’s called a special needs planned, where our long-care patients in our facilities actually we are their provider in three states and we’re growing that. So, that’s something that’s I think you’ll see a lot more of.

And then, one of the things I mentioned very early on, we have historically offered some services to some third-party folks. Way back in the day, we had some divestitures that said, “Well, we sold off some of our assets.” But they said, “We’d still like to have access to your systems and use those.” And they did. We’ve never really marketed that.

We have launched just this year a company called Tranzion, T-R-A-N-Z-I-O-N. Our website’s up and running, and we’re really doing a soft launch right now. But it’s seeking to really brand what we’ve done naturally, but really haven’t marketed in the past and be pretty bold in going in marketing to particularly smaller and more family-owned type nursing home businesses. So, there’s a lot of independent providers out there that don’t have IT shops, for example. They don’t know how to do… or there’s challenge with revenue cycle management.

So, we’re going to be offered them those services as we try to get very good about offering them to ourselves. We think there’s a market out there that we can start offering that to others. So, I think in three to five years you’ll see that brand growing and hopefully having some good traction.

 

John Farkas:

That’s awesome. One of the things we talk about a lot, and it’s important in any of this, any time of change, which is always, we have a huge opportunity right now to change some fundamental ways we’re doing things. And we have a huge need right now to change a lot of how we’re doing things. And when you’re a technology company, when you have a truly innovative solution, a big piece of what you have to do to help the market meet where you are is help them know how to think differently. And not underestimate how much work it’s going to take to get an organization who’s been doing things a certain way for a long time to move into a full new way of operating on a different… what does it mean?

What does automation mean in X, Y, Z sector? How is that going to actually work? How are we going to ensure that it works? Because we can’t. When we’re dealing with people and with human lives, we can’t afford to experiment. This isn’t an experiment.

It has to work. And so, what are we going to do together to ensure success? How do we need to think about it? How do we need to reframe what we’re doing? And if you’re bringing change, if you’re bringing the opportunity to do something really different, don’t underestimate what it’s going to take to bring organizations along with you in that change.

Be a partner. Help them partner toward that and understanding that and lock arms with them and be willing to walk with them in that process. And if you’re not, it’s going to be really hard because changing a 50-year-old organization with a really innovative frame is always going to involve some challenge, right?

I mean, there’s always going to involve some inertia that you need to overcome. And that’s the anatomy of a good partner is showing how you’re going to be willing to do that and join as a partner with an organization towards something that’ll be successful. Andy, thanks for joining us today. Any final thoughts as we wrap up here?

 

Andy Flatt:

No. I appreciate being with you today. Appreciate what you’re doing in the technology community at large in this area, and any opportunities like this to get the word out and share is greatly appreciated.

 

Closing Thoughts

 

John Farkas:

Well, I appreciate your time. Andy Flatt, CIO of NHC. Thanks for joining us today on Healthcare Market Matrix.

 

Andy Flatt:

My pleasure. Thank you.

 

Outro:

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