Build Series EP.3: Profitable Growth with Kush Das – EP.248

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(00:00:00) – Intro

(00:06:27) – Recapping Kush’s journey in acquiring Ennoble Care

(00:07:39) – Talent-to-value ratio

(00:12:37) – Timing for growth hires

(00:13:45) – Defining key hires

(00:18:29) – Tradeoffs to achieve profitability

(00:21:57) – Measuring internal ROI

(00:25:17) – Encouraging decision making

(00:31:05) – Profitability incentives

(00:33:12) – Messy growth vs. clean and simple

(00:36:40) – factors in M&A

(00:39:03) – Communication & cash management

(00:45:09) – Developing an EMR

(00:48:58) – What is top of mind for you in sustainability?

Alex Bridgeman: Kush, it’s great to see you again on the podcast. Two and a half years ago, we had our first one in the first series with Trilogy with you and Nikita, and that was a ton of fun. And I’m pumped to do another one here with you all about profitable growth, which I find really interesting. We were chatting earlier about other friends and investors describing it as kind of a muscle to hone, being able to grow at a profit, and being able to train your team that way is really important. So, I’m excited to chat all about that. But give us a recap on Ennoble Care and kind of your journey acquiring the business. And then, you said you’ve grown tremendously since you first jumped in. So I would love to get a recap on it. 

Kush Das: Yeah, absolutely. So, when we first got into the business, we were just in a few states and pretty concentrated. Since then, at this point, we’re now in ten states. I have four times the amount of employees we had, almost five times the amount of revenue that we had. And so, we’ve had a tremendous amount of growth, a mix of partnering with really strong local practices that just needed some help staying around for a long time and continuing to serve their patients. And also, just some of the organic growth, just figuring out where people are that need our services and being able to talk to them and find them more and make sure that we get engaged with them as fast as possible. So, it’s been a mix of those things and one crazy journey. But also, my team, I’ve just got to say, is just absolutely fantastic now. And I can’t even believe I have a team like that compared to what it was two and a half years ago, when it felt a lot more alone with the executive team. And now I’ve got seven A players and it’s really fantastic. 

Alex Bridgeman: Yeah, that’s a lot of fun. You talked about kind of that talent to value ratio. Do you want to dive into that? That’s a good segue with building out an executive team. 

Kush Das: Yeah, absolutely, absolutely. And I think that’s a big part of how I think about growth, and especially, and we use the term profitable growth, one thing I just want to say is the term that I like to really use is sustainable growth and in particular self-sustainable growth because I think that’s the thing that I think about every morning, which is what can I do to make sure our company grows, continues to do the thing that it does, which is serve patients in their homes, and do it in a way that we don’t have to depend on anyone outside of our organization to do that so that our patients don’t have any risk of us not being around. I think that’s the biggest way that I think about it. And so self-sustaining growth, in my mind, requires inherently breaking even or making a profit and making a profit so you can reinvest in more growth. And that’s part of the mission that we’ve got it with. And so when I take a massive step back and I say, okay, great, in order to do that, you have to grow, you have to build a team that can grow. And so how do you build a team that can grow while also just being sustainable at the same time? I think every CEO feels this inherent tension between hiring ahead of growth and hiring just in time for growth or hiring to wait for growth, that all three of those things requires a bunch of trial and error, frankly, but also a bunch of discipline. And then from a talent perspective, the thing that I’ve really found to be tremendously valuable is when you can get a handful of people that are worth 10 or 20 times the average person in terms of what they can do to drive growth, and that’s the place where, yeah, it can be expensive to hire a great team, but when you get the ROI on that relatively quickly, and I’ve had that in a few of my roles, it just produces tremendous results. And then, you get to actually build in a little bit more cushion for the growth you need in the future as well when you get a couple of those people. 

Alex Bridgeman: So, what does someone like that look like? What are the tells in your mind that, oh, this person’s capable of a lot more than just a single role, they can help us in all these different ways? How do you kind of suss that out? 

Kush Das: Yeah, a couple of ways. I think, of course, there’s some of the basic stuff. Which is, are you smart? What does smart mean? Smart can mean a hundred different things, but in my mind, do you communicate well? Are you good at math? Do you seem authentic and honest and have a bunch of integrity and a bunch of people want to work with you? So, there’s some pretty basic things like that. But then the thing that I find is can you hire a team of entrepreneurs? And that is how you really get 20 to one value is when you find someone who understands the mission, who understands the approach, but you can kind of say to them, hey, look, this is what I’m trying to do, this is what we are trying to do together, these are some ideas I have, but not just execute on those ideas, but they come out with better ideas. They refine your ideas, and they go and execute on them. And they’re not afraid at all to get their hands dirty, but they also know how to ruthlessly prioritize. Because when you’re in a growing company and when you’re a self-sustaining growing company, then the number one thing is there’s some things you’ve got to deprioritize. You can’t do everything. You have to focus on things that matter. So, I think the two things that I really look for in that entrepreneurial spirit is, number one, the ability to know what matters and what will produce the greatest return on someone’s time, which is the most limited resource that we all have. And then the second thing that I look for is, are they someone who is not just going to have the idea, but they’re going to roll up their sleeves and they’re going to act, and they’re going to act fast, and they’re going to act aggressively. And the thing that I say to all my team is, I don’t want to tell you to do things every day. What I want you to do is to feel the autonomy to make a bunch of fast decisions. And I want you to be right most of the time. If you’re wrong a couple times, that’s okay. But don’t be afraid to make the decision. Don’t be afraid to act and use your judgment. So, you get one of those people, you’re in great shape; you get five of those people, and you’re really cooking with gas. 

Alex Bridgeman: Speed sounds like it’s pretty important to you. 

Kush Das: Yes. You can never move too fast in these places. I know a lot of people think you can, but speed is incredibly important to us. Not just because there’s… not just from a competitive dynamic standpoint, but from, especially in our case, like there’s a real sense of urgency that our patients feel when they call us. And so, I think we should always mimic that sense of urgency when we’re talking about running our company and delivering our services at the same time. 

Alex Bridgeman: Well, you kind of alluded to that philosophy of like hiring ahead of growth or afterwards or right on time. Where did you start early on and where have you landed today on timing for growth hires? 

Kush Das: Yeah. Well, if my team was here, I’m certain they would say I’m always late on hiring for growth, which is absolutely true. So I think most of the time, by the time that I think we’re ready to hire, it’s probably I should hire a month or two ago, just candidly. And I think about that myself all the time just in terms of how to be a better leader and how to make sure we’re supporting the team well enough. I think the other part of that answer is that that’s how I started. I think we’ve actually had a couple ebbs and flows. So, there’s been moments where I have felt very like well positioned for future growth. And there’s been moments where some of that positioning has led to the growth happening even faster than I could have predicted, which then puts us behind. So, some of it’s a little bit of a cycle where you have to iterate a lot. So, you hire, you grow past the hiring, hire again, grow past the hiring. So, there’s some extent of planning, but there’s also some extent of just people having to raise the flag when they feel that there’s a need for more. 

Alex Bridgeman: How do you think about the progression? Like we want to get to, eventually in a couple years, you want to have this team, but what is the order of operations for getting there in terms of like key roles we need now versus roles we need then and planning around that? 

Kush Das: Yeah, absolutely. So, I believe that in many ways, organizational structure should follow talent, and talent should not follow organizational structure. And so, the reason I say that is because we all have a limited set of folks that we know that we trust, interviewing is hard, finding talent is hard. And so, I often am looking for a certain ballpark profile. I find that ballpark profile and I figure out where I can deploy them. So the way I describe our company is it’s much more of a basketball team versus a football team. We all pass, we all shoot, we all do rebounds, we all steal. Versus in a football team, you have some people that are wide receivers, and the wide receivers aren’t going to be offensive linemen. They’re just two completely different people. So, I think when we think about ourselves as a basketball team, the real view of the world is sometimes the power forward is going to bring the ball up the court and play a bit of a point guard role. And sometimes the center is going to be a half decent shooter, is going to take some of those two-point shots from the line. And so, there’s different moments where different permutations are possible. But the way I think about it is you need to get the right players into the right seats for the specific moment that you’re in in the game. So my first hire, originally, to answer your question, was my chief operating officer. So, she had a background as a nurse, she had worked as a nurse, and she had worked with me at McKinsey. She had done a bunch of stuff on both sides of the equation from a clinical perspective and from a business perspective and a growth perspective. And so what I wanted to do at that time was make sure we had someone who really got it, really got how hard it was to provide clinical care. And I had done a little bit of clinical stuff in my background as well, but I think having a nurse, a company of nurses who gets it, but also who is a leader who has 99 percentile problem solving skills and doesn’t mind working around the clock is the kind of person that you can get early on to fit into many roles. And so her role, for example, has changed from point guard to power forward to shooting guard probably every month, just depending on what the most important thing is. So, I have a couple people like that. And I’ve got a couple people like my CTO who I had to wait a little while to hire, even though I knew him early on, because I knew that there was going to come a time where we need a full-scale engineering team. We want to plan to build for that. So, I guess the answer is, it’s like 50% planning, 50% just being a really good enough person that you have a bunch of people that want to work for you that are growth players and seeing if you can keep them around enough and put them into the right seat so they can succeed. 

Alex Bridgeman: I love the basketball analogy. I used a football analogy in some of our earlier back and forth around being profitable is kind of your running game and it opens up everything else. But the basketball, that works really well. I like that. I might steal that. How did you… at the very acquisition point, like the first day in the business, how did you continue the analogy? Like how did you kind of set your chord and structure for that acquisition to be profitable? 

Kush Das: Yeah, well I think I came in with a pretty significant commitment that we would always be self-sustaining, that I never wanted to be in a situation where I needed capital to make payroll. Like I don’t want my employees to feel that kind of stress. I don’t want our team to feel that kind of stress. Like I just don’t want a situation where either our clinicians or our patients ever feel like the organization may not exist tomorrow. And I think depending on investors and depending on capital for growth and capital for sustainable operations is something that I just didn’t want to do. And so, coming in day one, that was my mentality. I don’t think that mentality, frankly, has changed much since then. We’ve made choices, though. We’ve made choices about how much we want to have in terms of cushion. We’ve made choices on how comfortable we’re feeling about basic things like working capital and how comfortable we’re feeling about deploying more capital for acquisitions and our access to debt. And so we’ve made a bunch of different choices on it. But day one and now, that commitment is the same, which is that we are going to remain self-sustaining. 

Alex Bridgeman: You’re kind of alluding to this concept of trade-offs, like whichever decision you choose, you’re inherently making a bunch of other decisions and trade-offs to be profitable versus growing unprofitably. What were some… you kind of mentioned a few, but can you dive into those a little bit more, like what trade-offs you made to be a profitable business? 

Kush Das: Yeah, absolutely. I think it’s a trade-off that I make but also a trade-off that our whole team makes together to some extent, and not just because of from a decision-making perspective, but the real trade-off is a trade-off on comfort. So, I think one of the hardest parts about growing sustainably, growing without extra capital to grow with the loss position is that you have to be a little bit comfortable with being uncomfortable. And so my team deals that all the time because we are always a little bit uncomfortable with just how much growth there is. And I think that’s the biggest trade-off, is that you have to have that feeling that you’re okay with deprioritizing certain things that are going to not be as smooth as we like or deprioritizing certain things that aren’t going to produce as much ROI or as much value to our patients as we would like. And so that’s the biggest thing, frankly, is it’s a trade off on what to focus on and when to focus on it. If we had infinite resources, we’d be able to do everything. And so I think the biggest trade off is not being able to do certain things at a certain time. 

Alex Bridgeman: Within that, those growth paths ahead of you, the opportunities you have to grow, a couple investors have mentioned this concept of ways to win, which you described as well, like if you have, ideally you want to be in a company where there’s multiple ways to win, maybe there’s five or seven ways that this can go really well, and maybe you only need like two or three to go well, but at least you have other options. Can you talk about maybe the ways to win you saw in Ennoble and being able to focus on kind of the one or two that felt most promising? 

Kush Das: Yeah, absolutely. And so the way I always look at it is there’s some things that are like table stakes that you have to do no matter what. And there’s other things that are like it’s optionality, where some parts can do well and other parts okay, where it doesn’t go well. So, when I looked at Ennoble, we have to do some things no matter what, which is just make sure we’re delivering on our commitment to patients and make sure we’re hiring well. So those are the two things we’ve got to be doing pretty much all the time for clinical staff and for patient care. Then there’s a bunch of different options on how to win as an organization. So, for example, how much do we do on the value-based care part in terms of helping our patients and our providers make the conversion from the standard fee-for-service world to the value-based care world? That’s one area of focus. Another area of focus is how good are we in the fee-for-service house calls world of making sure that we have the full array of services that we could be offering to a patient through our house call practice. A third way is how do I think about our house call practice and hospice working in one continuum together? If any one of those three things we do excellently, this is going to be a success. If we do all three excellently, it’s going to be a smashing success. If we do two out of three excellently, it’s going to be pretty great. So, I think that’s exactly how I think about it. And there’s not three things for us. There’s like 20 of those things. And so the total of 20 of those things, at any given time, we’re focusing on a handful, and we’re okay if one or two are going super well and a couple of them are preserving optionality for the future to go super well, which is what I mostly want to do. 

Alex Bridgeman: And so, within all of these, how rigorous are you around measuring internal ROI for the time and money that’s going to go into this project versus that one? What is that conversation and exercise like? 

Kush Das: Yeah, we do it constantly. It’s almost a daily exercise. A couple things, number one is visibility’s very important. So, understanding the KPIs of every single portion of the business is something I take super seriously. And the reason I take that so super seriously, honestly, is because without understanding the KPIs in the business, you can’t make any trade-off decisions. You don’t actually know how well something is doing, and you don’t know how much it’s going to take to get it from a C- to a B+ without actually knowing it’s a C- in the first place. And so we have spent an inordinate amount of time doing reporting and making sure we have reporting. One of the big things about the business that I take a lot of pride in is that we have a real good culture of self-reporting. So, managers on a daily basis putting together their own KPIs and reporting the KPIs out to their team and to us, that’s more at the central level. And so having that kind of culture allows people to be essentially grading themselves against a rubric that we give them. And once we know what those grades are, we actually have a really good way of saying, okay, this is where it is now. Are we okay with where it is now? And are we going to put resources behind to make it a ton better? Or is this okay where it is now and we’re going to put resources somewhere else? And so, we make those decisions all the time. 

Alex Bridgeman: If I was to listen in on one of these conversations that you’re having, what would I take away? What are the two or three things you think I’d pick up on most? 

Kush Das: I think the first thing would be… I think probably most people would be surprised by how fast we make some of the decisions. So, in our organization especially, we don’t spend too much time overthinking that stuff. That’s mostly because, frankly, it’s a time constraint. So, decision making takes time. Thinking through decisions takes time. But also having the ability to know ahead of time, pretty far ahead of time, where there’s the most leverage and the least leverage is what helps us make those decisions. So I think that that’s the first thing to be surprised about is when something comes up, we have to choose between two things and how we spend our time, just how quickly we de-prioritize one thing and prioritize the other. I think we do that across the whole team remarkably well. The second thing I think you’d be surprised about is how few of those decisions I am directly making. So I think we now as a fairly large organization have a lot of people that are making those decisions themselves. And so, I am setting more of the, this is the mission for the year, these are the KPIs we’re focusing on, these are the most important things organizationally. I think everyone on a daily basis are making trade-off decisions. Some of them are right, some of them are wrong. Again, most of them have to be right in order for it to be the right set of calls for the company. But that’s the second thing, frankly, is the amount of folks in our company that are true [practitioners?] and decision makers are extraordinary, down to the manager level of folks running teams of five. 

Alex Bridgeman: How do you encourage that? Like, how do you push that… I think a lot of people talk about trying to push decision making down within an organization. Sounds like you’ve done that really well. What’s been helpful in making that happen? 

Kush Das: Yeah, I mean, first of all, I’ve got great people. I think that’s like the whole thing. 

Alex Bridgeman: Definitely table stakes. 

Kush Das: Definitely table stakes, yeah. But I am a control freak about visibility, but I’m not a control freak about decision making. And I think those are two slightly different things. So I like to see everything. I like to know everything that’s happening. I like to know the numbers, the KPIs, the anecdotes, the complaints, the good, the bad, the ugly, all of it. But there’s a big difference between knowing that’s happening and then directly intervening in everything and providing direct feedback on everything and taking control of everything. I think that’s the kind of culture we’ve tried to build. It’s a perpetual work in progress, by the way. Like, I’m never going to be done doing that. But nothing should be hiding in the shadows. Everything should be out very much in the open. But also, as a leader, you have to let your leaders get enough span of control and leeway so they’re making their own decisions within the context of that visibility. So I think that’s something I’ve said to everyone that works directly with me, and they’ve said to the people that work directly with them, is just make sure we know what you’re doing and why you’re making certain decisions you make, and it’s okay to be wrong as long as you’re mostly right, and it’s really okay as long as you have the right intent, and you’re focused on the right why when you come back to us. So that’s kind of how I’ve approached all of it with my team and the broader team. 

Alex Bridgeman: How are you getting the good, bad, and the ugly from folks across the company? I think there was a CEO we interviewed who he would send emails to employees lower on the organizational chart and he just put the message in the subject line, but there’s no message. So, he tried to make it really casual, like you could just talk to me, like you don’t have to make this really formal, like even though I’m the CEO, like just please tell me just what’s going on. What do you do? What are some ways that you kind of get some of that, that information? I love the visibility versus decision making like bifurcation there, that’s really smart. 

Kush Das: Yeah, I mean, first of all, people legitimately do talk to me a lot. I think not nearly as much as they used to, which is tough for me personally, I think, as we’ve grown bigger. I think the couple of ways that I do it, so there’s KPI visibility and there’s anecdotal visibility, and both of them matter because, frankly, sometimes the anecdotes are even more instructive and better leading indicators than the KPIs are. On the KPI side, we have full data visibility on the entire organization down to the individual productivity level. And so that is something that I take a lot of pride in. It’s something that did not exist when we started, and we’ve made pretty significant leaps and bounds on that. On the anecdotal front, I think it’s about being able to work at different levels. So just as an example, when yesterday we had a facility partner that we didn’t do a great job communicating with, and that was a facility partner that ended up complaining to one of our growth folks, who ended up complaining to one of our market leaders, who ended up complaining to our chief operating officer, who ended up telling me about it. And I picked up the phone and I called the facility manager and just talked to her. And like there was some level of that that was good for her from a relationship perspective, of course, that I really legitimately care about her having a bad day that is even partially caused by us. Then also, frankly, like sometimes you’ve just got to pick up the phone and hear directly from people that are one-on-one going to tell you exactly what happened in a pretty detailed way. So I try not to be esoteric about the anecdotal problem solving. Like you got to actually get into the weeds and understand what’s going on. And some of that’s just talking to as many people as possible. 

Alex Bridgeman: Are managers uncomfortable with you calling direct reports on their teams and going, not necessarily going around them, but just talking to folks on their team without them being a part of it? 

Kush Das: Mostly not, which is amazing. I try to really respect people’s span of control. I think that’s a very important thing so the leaders feel like leaders, because they are and should. But then, I think the biggest thing is it’s not a blame thing. It’s not like if I’m talking to someone that’s one of your direct reports that you’ve done something inherently wrong. It’s legitimately like a saving time thing. Like sometimes you don’t want to hear from the person who heard from the person. Sometimes it’s just easier to talk directly to the person. And so I do have quite a few scheduled conversations but also more sporadic and spontaneous conversations with people that are a rungs more directly tied to the patient care intentionally because that way you actually get to skip some of the game of telephone that could happen when things are going through the pipeline. But I’d like to emphasize that it’s not about in any way deteriorating the integrity of someone’s leadership ability and their span of control, but it’s really about making sure that we have a good view of the whole field. Sometimes I am unfortunately the person making decisions about the whole field, and I just don’t want to make a bad call without actually knowing what’s going on. 

Alex Bridgeman: So we’ve talked so far about, I love the decision making, pushing decision making further into your team. Do you have any incentives around profitability as part of kind of pushing that decision-making down? Like how do you make them care about profitability as much as you do? 

Kush Das: Yeah, that’s a great question. I think, so we don’t do direct profitability-based KPIs. So what we do is against budget KPIs and then, frankly, KPIs that translate towards sustainable businesses. And so, when I think through it, when I tell folks on my team is that they have specific areas where they can drive sustainability. And so those specific areas are the ones that they’re responsible for. So just as an example, how much, how many visits on average our providers are doing, it’s incredibly sensitive. We can have, if we have a bad week of visits, it actually puts us in the red very quickly. And so having that kind of daily tracking of productivity and performance is super important. And that’s the KPI I’m giving to one of my team members. And that’s the span of control that they have control over and they have decision making over, that they then get to spend all of their time on. So, it’s not as like a broad KPI that is about profitability generally, but it’s about the individual KPIs that they can influence directly that are really driving the different parts of the business and the profitability of each of those parts. 

Alex Bridgeman: Got it, and more about something that they can control versus profitability where, frankly, you have a lot of decision making in influencing that particular number. 

Kush Das: Exactly. And you don’t want to put people in a position where they are responsible for things that they don’t have the ability to influence. I really believe that from a leadership perspective. And so you give people the KPIs and incentives that they have the ability to manage on a daily basis. And if they are good at that, then frankly, it all kind of boils up. And the sum of the parts turns out to be a sustainable organization overall. 

Alex Bridgeman: I love that. Talk about the messy growth versus like clean and simple operations. Like where’s your trade off there? What decisions do you make along that spectrum? 

Kush Das: Yeah, again, if my team was here, they would say that I am definitely on the spectrum here of being okay with messy growth. I really just believe that growth is messy. Not that I’m okay with messy growth, but that that is what growth fundamentally is. And I think that’s true of all kinds of growth. Personal growth is messy. Organizational growth is messy. Patient growth is messy. Provider growth is messy. Every single one of those things is inherently some degree of messy because change is messy, and growth is change. And so that’s legitimately how I talk about it, where being okay and tolerant of some degree of messiness is good and necessary. Again, there’s some things you never let the ball drop on. And when the ball does drop on it, you pick up the ball, you fix it, you apologize, you make sure you lower the chance of it ever being dropped again. But on many things, from a process perspective, we do take a bit of a softer approach to it. We focus on people often, instead of process. We focus on making sure that the right people are there to make the decisions, rather than making sure that we have a uniform process across all of our different elements. And number one, that’s because, frankly, it’s the only way that you can keep growing in a people business in order to not pull your hair out. But number two also, when we have grown the way we have, which is in the last year, we have doubled in size, when we have that kind of growth, it’s not really possible to have the same process you had last year that is clean as you have this year. It’s broken already. Like by the time you finish the first process, it’s already too late because you’ve grown out of it. And so inherently we’re in the state of like a growth spurt adolescent kind of feeling. And so, some of us just remembering what it was like being a teenager, where things are inherently messy, and you’re going to be okay with that because your knees are going to hurt all the time because you’re going too fast. So that’s part of the coaching I give to a lot of my team. And it’s still a perpetual debate, but it’s never actually a done deal. 

Alex Bridgeman: Well, along that, I like the discussion around once you finish one process, it’s broken, and then you’ve got to rebuild it and do something else. Are there certain processes that’ll become more crystallized over time? 

Kush Das: For sure. Some processes… and are built for scale, which are awesome, I think. Mostly, any processes that involve people need to always keep growing and changing. I think there’s some processes that involve numbers or more of the kind of backend management or data. Those processes scale very nicely. Like when it’s a data process, sure, that’s going to be fine 10X or 20X the size. Things that affect people on a daily basis, even simple things like payroll, for example. You want to make sure people get paid on time. You want to make sure they understand how they’re getting paid and why they’re getting paid. We have a lot of bonus space and variable compensation built into our model. And so, any process that we have on payroll may work from a data perspective, but it stops working from a communications perspective when your employee base has 4Xed in size. And so, things like that where some things scale really well, some processes scale really well, and typically the ones that are really people-oriented are ones you have to keep reinventing. 

Alex Bridgeman: Can you talk about profitability as a factor when it comes to acquiring other businesses or merging with other businesses? 

Kush Das: Yeah, so we actually don’t look at it as a factor in the go, no-go decision of acquiring or not acquiring. It’s obviously a factor in valuing a company and how we’re going to actually make the other party feel whole as part of the process. But what we do is we are really focused, when we look at a potential company to partner with, we are really focused on whether they are delivering good clinical care and whether they have a patient base that trusts them and whether they have a community partner that trusts them. Typically, if you have those sets of features in line, you’re going to be in pretty good shape. Like if they have a bunch of good providers, decent leadership, good market reputation, frankly, and patients that actually like seeing their provider, we can do a lot after we partner with the business on how we actually make the practice work and sustainable and last forever. And so that’s primarily the goal, which is find the good teams and then put our model on it so that the teams can last forever. 

Alex Bridgeman: So what common modifications are you making to their existing model that you would implement after an acquisition that bring it to a profit margin that you’re happy with? 

Kush Das: Yeah, and so we have standard targets across the board. Like we’re not looking for anything crazy. Again, it’s all about self-sustaining growth for us and making sure we can keep serving the patients. And so, when I really think about like what I am focused on when we acquire one of these businesses, it is really down to like the nitty gritty details. So there’s three or four things we do every single time. A lot of it’s focused on the fact that we actually have an EMR that can help capture the activities of all of our providers, all the things that they’re already doing, frankly, that is excellent patient care, we can capture it and we can actually put it in a format that is understandable to insurance companies. And I think that’s the piece that, frankly, is the biggest differentiator for what we get to do. There’s a ton of practices out there that are doing great work, and they cannot manually put that work into a form that gets communicated to insurance companies so they get fairly reimbursed. And so that I think is the number one biggest thing, and there’s a bunch of little things we do to actually make that possible. 

Alex Bridgeman: What else around profitable growth have we not talked about that you think about a lot? 

Kush Das: Well, I think the biggest thing I think about, honestly, is the communication and management. That’s probably the biggest thing we haven’t talked about. I’m a healthcare operator. I’m someone who, the word profit is even a tough word for us to ever talk about. Profit is not profit the way people talk about it from a general business perspective. The reason why I started, I very clearly want to emphasize that it’s all about sustainability is because in our type of organization, especially, we are always a little bit behind from a cash flow perspective and a cash management perspective because we have to send our bills out well after service is delivered for the bills to come back. So when you think about it that way, if a business is growing 20% a year from a margin or profit standpoint, from a cash management standpoint, that business is probably a break even because as the business is growing, because it’s also growing 20% a year, then you have to reinvest and pay payroll before you’ve collected money. So for us, our biggest cost is payroll. Our biggest driver of revenue is getting money from insurance companies. Insurance companies take 30 days to pay, and payroll does not take 30 days to pay. You have to pay payroll right after someone has done the work for you. And so, we’re kind of perpetually behind from a cash management perspective. And you have to think about that if you want to be self-sustaining. And so, in many ways, the profit the way that I think non-healthcare businesses think about it, non-healthcare delivery businesses think about it, is not the way I think about it. I legitimately think that in order to stay sustainable, you have to maintain a basic margin, or else you’re going to be cashflow negative. And that’s something that I’m not willing to do, is I’m not willing to be cashflow negative. 

Alex Bridgeman: What are some things that you do to manage that kind of working capital dynamic and that cash balance? 

Kush Das: I mean, I think paying attention is probably the biggest thing that we do to manage it. But also a lot of it is about making sure you have sufficient cushion. So, you never want to be, and we have been, at various times in the business, we’ve grown so much that we are behind. You have to catch up obviously. You have to remember how the catch up works. But the way I think about it is I’m very conservative around planning. And so I’m not conservative on growth. I’m very aggressive about growth. I’m very conservative about planning. So I assume, like we talked about before, a bunch of things are going to go wrong. So I have the case in my head that I’m going towards the everything goes really well case. And I’m very concerned about the what is likely to happen, which is not everything goes really well. And there’s going to be some range of things where the pessimistic part of me, which is a lot of me, is true and the optimistic part of me is wrong. And so, I think that’s a big thing is that I always plan as a pessimist, because if you plan as a pessimist, then if you beat the pessimist’s case, then you’re going to be fine. And so, you’re going to never have to worry about it, frankly, from a tension between growth and working capital planning. 

Alex Bridgeman: Where does that show up? Is that like you maintain a better line of credit or keep a higher balance compared to similar businesses at that same revenue size? Or what are some places if I was like an outsider looking in, where would I notice that? 

Kush Das: Yeah, we definitely keep a little bit more liquidity than I think many businesses in the healthcare world do. Some of that’s because of how much we’re growing. So, some of that’s a little bit of what you’re going to be at. The second thing is that when I think through, especially hiring, hiring planning, that’s the place where I really set up stage gates. Like I really try to be careful about not having the hiring outstrip the revenue. And I think that’s the place where daily decision making makes such a difference. Like, I’m incredibly fortunate to have a team of pretty thrifty people, so people who are always thinking about how to make sure that we can stay sustainable and live to fight another day and what the value of every single dollar is and how we can reinvest that dollar into growth and into patient care. And so they think about it all the time. I think that’s the thing that actually helps a lot is you’re making a thousand of these decisions every month, not one, but quite literally a thousand. And for each of them, the question is, how can you make sure that the cost matches the revenue in the way that keeps you sustainable? And it takes a ton of visibility and a ton of attention and detail, frankly, to make it happen. 

Alex Bridgeman: You mentioned that you’re checking every day, like what reports do you look at first? 

Kush Das: Well, I’m looking at about 30 reports a day, I think. I am looking at KPIs every single day. I’m still part of the business. Pretty much when any leader of the business calls me, I’ve already, I know exactly how their business unit did yesterday, which is nice. I’m looking at everything from the amount of new patients we got, the amount of visits we did, the amount of care coordination time we did, to the number of behavioral health visits that we did, to how much real monitoring time we had, how much hospice census we have, all of those things. It’s all data points that I’m getting every single day, frankly, and they’re the best leading indicators of performance. And so, just as an example, if we have labor cost requests coming in, I always know where my revenue is today or yesterday, usually it’s yesterday that I know. And so, I can make a decision based on labor cost, go, no-goes, frankly, based on what the information of yesterday is versus the information of a month ago, which is typically how financial statements work, is you’re going to get closed financials ten business days after the month ends, which by that time you’re a month late and you’re making decisions that are a month old, which is the thing that makes it very risky. 

Alex Bridgeman: So, you mentioned hiring a CTO and having an engineering team. You also mentioned an EMR. So is the engineering team developing the EMR, or are they also playing a hand in some of these tracking tools? 

Kush Das: No, they’re developing the EMR. So we have a full stack purpose built electronic health record software for home based primary and palliative care. And so that is how we manage that part of the organization, actually. It’s with that EMR. And so, yeah, they’re spending their time developing EMR. I’ve got an amazing chief of staff who does a lot of work with data. But frankly, all of us do. This is where, again, we have two kinds of data. We have the data that sits in our dashboards, that’s in our data lake and our SQL server that’s super fancy. But then I really do believe that each individual manager needs to be owners of their own data and owners of their own KPIs. And they’re the ones sending me these data reports. And that’s the thing that I think actually works even better than the fancy thing. 

Alex Bridgeman: And you talked about you wanted an EMR that could communicate properly documentation to insurance companies for profitability. Is that why you built your own instead of using something like Epic or what went into that? 

Kush Das: Yeah, so our EMR captures house call activities better than any EMR does. I’m very confident of that. And so, yes, that is the primary value proposition of the EMR. This is from a business perspective, I think. From a real clinical perspective, like as we have evolved, we have been able to tailor the workflow of a mobile workforce more towards a home health company than towards a physician practice. So almost every physician practice EMR is not built for a mobile workforce. And so we’ve had to start to evolve that over time. I think we’re, again, incredibly early stages on this. Like it’s a full stack EMR. It’s fully O&T certified. It’s compliant in every single way. That’s the stuff we focused on. But we have so much left to do on the user experience front to make our providers’ lives easier, to make our care coordinators’ lives easier. We have so much left to do from our activity front, frankly, of service lines that we can add to it as well. So, we’re early stages, but yes, the two primary things are how to satisfy a mobile workforce and then how to make sure we’re capturing as much of the activities of that workforce as possible. 

Alex Bridgeman: So, is that going to be its own product and business one day? 

Kush Das: I don’t know yet. 

Alex Bridgeman: Or is it a secret sauce you want to keep internal? 

Kush Das: Well, I still don’t know. Honest to god, I just don’t know yet. I think there’s like some version of an answer I can give you that I think is right. So, the answer I think is definitely a possibility, but it’s a little bit too early to tell. 

Alex Bridgeman: Yeah, I like the idea of keeping it as an internal tool that you can use as a value prop for other acquisitions to say we’re going to help you run your practice way better than anything else can do. And that’s what we bring to the table. 

Kush Das: Yeah. And frankly, it works. Like we take negative margin practices and make them sustainable in a month or two after we bring them on. And that is extraordinary. And that’s, frankly, just a lot of that is because of our operating model and how the operating model interacts with the EMR and how much we can capture through the EMR. Obviously, we’re pretty good at some other things too, like understanding reimbursement and understanding ACOs. And so there’s like, probably again, like with everything, 50 layers of detail compared to what I’m saying right now. But the super specific thing is that their daily activities shouldn’t change that much. They’re still doing the same visits. They’re still prescribing meds. They’re doing lab orders, working with the DMV company, like they’re still doing the same things, but by capturing it in a different way, we’re actually making it sustainable. 

Alex Bridgeman: I love that. What are you trying to get better at right now sustainability-wise? What’s top of mind? What’s the skill that you’re working on like this quarter for Q4? What are you most excited to develop? 

Kush Das: Yeah, well, there’s one area of our organization that we have still some amazing, amazing upside on from a care perspective and from a business perspective. So really, one of the dreams here is to make people’s end of life transitions as seamless as possible. It’s hard for families, it’s hard for patients, it’s hard for caregivers, it’s hard for the facility, it’s hard for the provider. We are incredibly fortunate to have a high performing hospice agency and we’re incredibly fortunate to have a fantastic physician practice. Putting those two things together, making sure that the continuity of care is seamless for patients, for caregivers, for providers, for clinicians, I think that’s like the zenith of where we could be, frankly, as a candle of the organization. And that is the thing that we’ve been really focused on for the last few months. And it’s one of those things where it’s never an end. It’s just something we’re going to work on in perpetuity. But I do think that’s one of the biggest value props for our business. There are very few clinical organizations that can be excellent at both of those things at the same time. And there’s even fewer clinical organizations that can be excellent at the combination of those two things as a continuum. So, we are trying for that third thing. 

Alex Bridgeman: I love that. Kush, thank you for coming on the podcast again. This was super fun. I’m glad to get to see you again and hear all about the tremendous growth you’ve had so far. So, this has been fun. I hope we get to come down to Durham here pretty soon too. It’d be fun to see you and hang out more. 

Kush Das: For sure. And I’m dying to get a college football team that I actually want to be a fan of. So as a Jets fan, let me tell you, it’s time to go away from the NFL and move to college football as soon as possible. So I am looking for my team. So, if you’ve got a Duke game going there, I’m happy to join. 

Alex Bridgeman: Amazing. I will advocate for the Oregon Ducks. I don’t think they have any games in the D.C. Virginia area, but maybe one day. We’ll see. 

Kush Das: That’s right. We actually just entered Oklahoma, so I may become a Sooners fan. I’ve been thinking about that. So that might be the immediate next one. 

Alex Bridgeman: There you go. Love it.