Entrepreneurship program headed by Signature HealthCARE seeks to make Louisville long-term industry’s global leader

The lobby of Signature HealthCARE’s new headquarters in Louisville. Signature moved from Florida this year and is leading an initiative to create the International Center for Long-Term Care Innovation, also known as Innovate LTC, whose goal is to make Louisville the world’s top center for aging care.

Across the globe, silver-haired citizens anticipate their futures likely will include some form of long-term healthcare. It may, however, be different from and better than the end-of-life nursing home model now common in the United States. That vision is being pursued in Louisville, where an existing cluster of companies hopes to cultivate specialized entrepreneurship that makes the city the world’s center of long-term healthcare.

Joseph Steier III, a Louisville native who returned home this year as CEO of Signature HealthCARE, bringing his $500 million company with him, has spoken to companies in Kentucky and Florida (Signature’s former headquarters) over the past 18 months about the mission of conceiving and birthing innovation in long-term care. Now, they are creating a pool of capital to spend on business ideas deemed worthy.

The resulting umbrella organization, the International Center for Long Term Care Innovation – also known as Innovate LTC – is actively in its formative stages. The concept goes beyond a traditional business incubator with several offshoots. It includes an online geriatric topics global whitepaper database called The Institute for Long-Term Care Studies.

The new center is described as one part talent agency, two parts accelerator and will include real-time learning opportunities for college students. International networking is underway to harvest best practices and product expansion; so is creation of ecosystems and construction models for testing products and technology.

State government and local government under Louisville Mayor-elect Greg Fischer both have pledged support and will assist in identifying resources and bringing together companies to fund entrepreneurship in the long-term healthcare industry.

“The Commonwealth of Kentucky has made significant investments to assist Signature HealthCARE’s relocation and the expansion of the University of Louisville’s Nucleus project, which will help lead to the development of innovative products and services that benefit elderly people and the long-term-care industry,” said Deborah Clayton, commissioner of the Department of Commercialization and Innovation within the state Cabinet for Economic Development.

“Already we have some of the most prominent players in the industry based in the Louisville region, and their collaborations will foster innovation,” Clayton said. “With innovation comes entrepreneurs and start-up companies, which leads to job creation and the commercialization of technologies that help improve people’s lives. I am confident that in the next decade, the bioscience and life science cluster that is growing in and around Louisville will be recognized as a national and global leader in the long-term healthcare industry.”

Better service for a growing market
Markets for aging innovation include: senior wellness; clinical services; adaptive environments and products; home- and community-based service models; specialty-care models; healthcare IT; and pharmacy. Conceptually, ideas will come from intrapreneurship harvesting inside Louisville’s long-term-care companies as well as the state’s academic institutions, beginning with UofL, then expanding globally over time.

Signature will vet prototyped products, technology solutions and related concepts from Innovate LTC at pilot test models for skilled facilities, which are to be built in 2012 in Marietta, Ga., and Nashville, Tenn. A retail-level innovation model with products for the aging is also under consideration in Louisville as a showcase opportunity, similar to the Apple store model approach.

Ongoing world and U.S. aging trends estimate that the over-65 population will increase 25 percent by 2015.

Signature has 66-plus locations in seven states with more than 10,500 employees and revenues last year exceeding $563 million. Its vision, however, is a transformation of care and the quality of life for the global aging population of 75 million-plus boomers, Steier said. Doing so will take development of sustainable, disruptive and scaleable products and services, including new technologies.

Steier’s brainchild won’t die due to lack of money, he said. The initial $3 million funding came half from Signature and half from a UofL Foundation grant to Nucleus and then to the non-profit area of Innovate LTC.

And he hired seasoned healthcare executive John Reinhart, a former executive vice president for the Clinical Solutions Group of Allscripts who has put multiple healthcare industry deals together. Reinhart also is a longtime friend of Steier’s dating back to high school swim team days, so the relationship has a pre-established trust and understanding of one another.

Pitching in to fund innovation
Together, Steier and Reinhart speak excitedly and move through the facets of their vision in rapid succession when presenting the overlying groundwork that is in place. They admit, however, that challenges do lie in fundraising and then the collaboration that must transpire first among Louisville companies, then throughout the state and ultimately across the world for long-term care innovations to be meaningfully designed and executed in live settings where models can be tested.

Innovate LTC’s $3 million in seed funds will be used over the next two  years for operations and to invest in companies, ideas and related cooperative deals. The next $5 million is coming from Louisville’s aging-care cluster. Nine entities, including Signature, are anticipated to ante up for the next $5 million by the first quarter of 2011. The other eight are: Almost Family, Atria Senior Living Group, Humana – Medicare, Kindred Healthcare, Pharmerica, Res-Care, SeniorCare and Trilogy Health Services.
Another $10 million raised will involve companies outside the state as well by the end of 2012.

Louisville’s healthcare cluster positions the city to be a major participant in driving this change. The market is home to $27.5 billion in aging care-related companies already. The  corridor taking shape inside Signature and the UofL Nucleus incubator features intrapreneurship graduates groomed by Signature who are undergoing evolution as the first players in a world game to alter long-term healthcare. Greater Louisville Inc. already includes messaging about this aging-care initiative in its economic development materials.

“We have to restructure long-term care,” said Reinhart. He is encouraged by the interest and pledges from parties in the marketplace to fund and seed the efforts of Innovate. And the trust he and Steier already enjoy gives them an advantage in being able to execute the vision more quickly, he said.

Companies emerging from idea pipeline
Reinhart and Steier have begun visits to 30 Kentucky CEOs – targeted for a perceived ability to make a difference in seeding long-term care companies – as well as commonwealth universities, including the University of Kentucky and Northern Kentucky University.

“We are looking at a broad number of products and services, from furniture, to hospital gowns, to software, to any items that can be found in a nursing home or clinical settings, as well as laboratory equipment and other medical devices,” said Graham Phillips, chief development officer of Innovate LTC. Phillips is responsible for assisting in research, establishing proof of concept for ideas, and business model design.

So far, the center has funded the following seed companies: Serenity Healthcare (Alzheimer’s and nursing home diagnosis), SHC Furniture, SHC Construction, Integritas (nurse practitioners) and SHC International Recruiting. Most arose from intrapreneurship at Signature.

Another 30 concepts handpicked by the center are being reviewed. An open call for seed-company business plans will take place after there is enough staff in place to make the reviews. Initially, though, the process will involve Innovate LTC’s investing companies, their intrapreneurial recommendations and the current academic corridor.

Innovate LTC, or more formally The International Center for Long-Term Care Innovation, will follow multiple models to push forward Louisville and the state as the long-term care capital of the world. It will work to grow as a services company, a license and distribution company for tangible products, a license and distribution company for intangible products and intellectual property, a not-for-profit branch tied to the academic institutions involved, and via its investment fund.

A plan to brand Louisville
Steier says he has always focused on three organizational foundations: intra-preneurship, learning and spirituality.

He has structured Signature HealthCARE to be what he likes to call “an entrepreneurial think tank,” moving the company to intrapreneurship in recent years. In fact, Signature has a Dean of Learning for intrapreneurial encouragement inside its ranks.

And Signature has large for-profit, non-denominational interfaith spirituality departments for residents, employees and family members. He also implemented The Compassion Fund Inc. to provide assistance to employees and the communities that Signature serves that have experienced an unexpected or catastrophic event.

Branding Louisville and the state as the long-term care center of the world also will be pushed forward by formation of a Global Forum for the Long-Term Healthcare Industry. A conference and tradeshow is planned for 2012.

In addition, Innovate LTC will formulate a program for its entrepreneurs with the Kauffman Foundation under a customized FastTrac TechVenture business planning program.

“We are going to be a global force in long-term care,” Steier said.
Incoming Mayor Fischer bought in to the vision enough to make the long-term-care capital of the world concept part of his campaign platform for creating jobs.

“We expect to see job creation from moving suppliers who serve our existing LTC companies here,” said Chris Poynter, spokesman for Fischer. “We are particularly excited about the Innovation Center as part of the growth of LTC companies in the market. The state Economic Development Cabinet is on board. This strategy will be a cornerstone in our economic development both in Louisville and the state.”

The Team of The International Center
for Long Term Care Innovation

John P. Reinhart
President, CEO and Founder

“Back in 2009, when the underpinnings of the center were being conceived, I told Steier that I didn’t know whether long-term healthcare companies and aging communities could be entrepreneurial by nature. He convinced me otherwise and I came onboard motivated and excited about all we can do.”

A former consultant and dealmaker, Reinhart has an established record in venture-capital-backed, private-investor-sponsored and public companies. In 2006, he was a founder of Commonwealth Leverage Group, a partnership of accomplished entrepreneurial executives focused on providing strategic and acceleration services to high-growth entities. He understands how to use business methodologies, relationship and team-building to create strategy and employee engagement. Reinhart has Big 5 public accounting firm experience in audit, acquisition and financial advisory services.
His first international trip to identify new technology and products was to Germany last month.