Fast Track

Dynamic Health Care/Dynamic Nursing Inc. Year Founded: 1987 Core Business: Home nursing Revenues in 1995: $4 million Revenues in 1998: $8.7 million Employees in 1995: 125 Employees in 1998: 260 Top Executives: Nissan Pardo, CEO and CFO; Carol Silver, president and administrator Goal: To provide quality in-home health care at an affordable price Driving Force: An aging population and strong demand for less-expensive care JENNIFER NETHERBY Staff Reporter In the late 1980s, Valley residents Carol Silver and Nissan Pardo entered the home health care business, as did scores of others. A dozen years later, they have emerged among the very few survivors and are thriving. Capitalizing on their personal experience and a medical background, the duo have grown Sherman Oaks-based Dynamic Health Care from a two-person company in 1987 to a two-office company with more than 250 employees today. Company sales have rocketed from $4 million in 1995 to $8.7 million in 1998. Dynamic provides home nursing care and low-maintenance home care. It has not been an easy road. The home health industry has come under tighter restrictions and higher costs since Dynamic opened, and more challenges seem to be on the way. In California, 175 home health care companies went out of business between December 1997 and January 1999, following increased restrictions on Medicare payments, according to California Association of Health Services at Home, an industry trade group. “It’s gloom and doom,” said Connie Little, senior vice president of the association. “Things are just very difficult now.” Pardo and Silver aren’t worried. Having weathered the first home care downsizing, they’re confidant that Dynamic will make it through again. Working in their favor is the fact that demand for home health care has been dramatically increasing because of an aging population, emphasis on containing medical costs and a shift toward allowing terminal patients to stay at home rather than in a hospital, Little said. Pardo and Silver launched Dynamic Home Care in 1987. Silver’s father had died of Lou Gehrig’s disease and she was able to stay at home and help care for him during the last years of his life, with the help of a full-time private nurse. That experience provided her with insight into what other families want in home health care. “When we talk to a family, we’re able to relate to them,” Silver said. Silver had worked for Pardo at an L.A. clinical lab for more than a decade when they decided to enter the home health business. With the growth in analysis computer programs, doctors were doing more of their own diagnostic testing, rather than having tests done by outside clinical labs. That convinced Silver and Pardo to leave their clinic days behind and turn to home health care. The duo opened Dynamic with two full-time employees and money from savings. To get their new company’s name out to the public, they contacted the California Department of Aging and began to get contracts with area senior centers. They also reached out to area non-profit health organizations, which spread word to prospective patients. Today, Dynamic gets referrals from nine of the 11 L.A. County senior centers and dozens of non-profits. The company began as a private duty service, providing some minor home health care and help with cooking, housekeeping and other daily tasks. It was designed as an alternative to a nursing home for patients in need of little or no medical care. In 1993, Pardo and Silver decided to split the company in two, to facilitate growth. One company Dynamic Home Care would provide care to low-maintenance patients, and the other Dynamic Home Nursing would handle a full range of home medical care. Around that time, home health care began to boom. New companies were entering the market, trying to capitalize on an aging population and potentially lucrative Medicare payouts. “A lot of individuals who got into the business got into it because of the fast buck,” Pardo said. “A lot that got in, got out because they got into trouble.” When the federal government began reducing Medicare reimbursement rates, Pardo and Silver decided to edge back from that business sector, and slim operations until the environment improved. As they weaned themselves off Medicare, they turned to an emerging health mega-trend, managed care. Managed care was looking to home health care because it represented an opportunity to reduce costs. For home care, an HMO might pay as little as $70 a day for full-time individual service, vs. a hospital stay that typically costs hundreds. The decision to turn to the managed care market sustained Dynamic; in fact, HMOs have become the fastest-growing source of new patients for Dynamic. Meanwhile, the number of Medicare/Medi-Cal patients is dropping off, Pardo said. In 1997, Dynamic opened offices in Las Vegas to capitalize on that city’s growing retirement community. To further separate itself from the rest of the industry, Dynamic decided to hire home nurses, rather than contract with third-party providers. Pardo said that hiring employees has enabled the company to provide continual training, to guarantee its clients quality employees, and to provide its workers with health insurance and malpractice coverage. “We train them on the home environment and impress on them that the kind of care they give is related to the patient continuing to live the rest of their life in an environment that is comfortable and conducive to an extra length of life,” Pardo said. Nurses with Dynamic Home Nursing help patients of all ages with just about any type of medical care that can be performed at home. They provide chemotherapy, administer medications, help with post-surgery recovery and other medical procedures typically handled on an outpatient basis. “There’s no way for a convalescent hospital to compete with the home environment,” Pardo said. “It could be as nice and clean as possible and would still never come close.” For Home Nursing, costs are usually paid by Medicare/Medi-Cal, a managed care plan or other private insurance. For Dynamic Home Care, revenues consist almost exclusively of out-of-pocket payments by the patients themselves, because few insurance companies cover such services, though that is changing. Dynamic’s co-founders believe that as more managed care plans offer coverage for daily low-maintenance health care, that segment of the business will boom. “The general public realizes that taking the patient out of the home is not the solution,” Pardo said. “The technology has enabled us to do more at home now.”