August 18, 2005 in Business

S.L Start sees many changes after 26 years

Bert Caldwell The Spokesman-Review
 

S.L. Start started business 26 years ago with a single $89,000 contract for placing the disabled in jobs.

Projects with Industry was a new federal program then, and so was the concept of for-profit companies providing services that until then had been almost entirely the responsibility of state agencies or nonprofits. Founder and Chief Executive Officer Steve Start remembers former colleagues, fearful that he might shortchange service in the name of profits, scrutinizing his every move.

“It was very hurtful,” Start says, but adds “That’s when I learned how serious accountability for public funds is.”

If anything, the scrutiny has increased.

Each quarter, for example, the Spokane County Community Services Department compiles a report measuring the performance of every supported-employment contractor by number of clients served, placement rate, and wages earned. Start is just one in a mosaic of about a dozen area providers that also includes the Association of Retarded Citizens, or ARC, Goodwill and Skils’kin, some specializing in just one niche.

The latest report, covering the first quarter of this year, indicates the strengthening job market is absorbing more of the developmentally disabled, with the placement rate for individuals approaching two-thirds of all those enrolled by the providers. Start’s rate, at 73 percent, was among the highest.

Start says he’s OK with the oversight, although he marvels that auditors of assisted-living facilities will go so far as to count change in the cookie jar. But when the state was more flexible, unscrupulous operators simply pocketed what funds they could that should have gone to the client.

Assisted living and job placement are the pillars of S.L. Start, which its founder has built into a company with more than $40 million in revenues and 1,000 employees. Most of that revenue comes directly or indirectly from the government.

In 2004, the company was responsible for 640 children and adults with developmental disabilities living semi-independently, and the same number of seniors living in five retirement communities like Northpointe and Harbor Crest in Spokane. The company also found jobs for 1,600 clients in Washington and Idaho.

Start, who has served on a panel advising the Social Security Administration on work incentives for those receiving disability benefits, says government has become a much more sophisticated buyer over the years.

When he began his career in the 1970s, the government paid for services based on cost reimbursement. The more a provider spent, the more they got paid. So they spent.

“The system was stuck in a methodology that was headed in the wrong direction,” Start says.

When for-profits got involved, the agencies and providers had to figure out how to fund the programs, measure outcomes, assure client health and safety, and impose accountability. Outcomes, not just process, had to be the focus.

Competition sharpened everybody’s pencils. There were three Washington companies bidding for the first supported-living contracts, Start says. Now there are well over 100. The days of big, single-provider contracts are gone. The unique needs of each individual are identified by caseworkers, and providers bid to tailor their services to each one.

Employers want to participate, but they have needs too, and will stick with providers only as long as they supply employees capable of doing the job.

Although it’s a fight to get the dollars to cover program costs, Start says the developmentally disabled and their families are a constituency that relentlessly, and successfully, lobbies for adequate funding. Not so for seniors.

Medicaid reimbursements do not cover the costs of living in a retirement or assisted-living community, Start says, and probably will not in the future. To cope, Start limits “state-pay” residents to less than 15 percent of the population.

He says the financial squeeze has been tightened by a trend towards more litigation, and the spiraling insurance premiums that result. Lawyers pounce on injuries due to falls, for example, which has forced Start-managed facilities to ask residents who fall repeatedly to leave.

“It makes you sick,” Start says.

He says costs are gradually pushing the cost of Start retirement facilities beyond the reach of many in the middle class, let alone the indigent Start hoped to serve when he founded the company.

“We’re not serving our roots,” Start says, adding that he might be able to get costs down by building safe but bare-bones facilities, but labor costs would remain a challenge. Healthy seniors, he predicts, will soon be taking care of the infirm.

“I don’t know what’s going to happen, I really don’t,” he says.

Start says S.L. Start has thrived by building relationships, being honest, and figuring out what agencies, clients and employers need.

“If you can do the job, they’re happy.”


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