To most residents of St. Paul, MN, the name HealthEast is the brand name for a system of area hospitals and clinics; in other words, it's a name you think of when you're not feeling right and you need medical care.
More and more St. Paul residents, however, also think of HealthEast when their cars and trucks aren't feeling right and need repair. For the past few years, the healthcare company has been marketing its vehicle maintenance services on the retail market, and it's been a win-win situation for the company and the community.
It may seem at first like an odd fit—after all, what do technicians who are used to maintaining rescue vehicles know about passenger cars or pickup trucks? But then, if your car needed repair, why wouldn't you want it to be fixed by people whose work absolutely cannot fail, because lives depend on it?
THE CORVETTE IN THE CORNER
As you drive along Front Street in St. Paul, there is no outward sign that the low brick building you're approaching is a retail garage. There's no signage anywhere, and the vast majority of the vehicles in the parking lot are from HeathEast's 50-unit fleet of ambulances and transit vans. Even a walk through the four-bay service area reveals only HealthEast rescue vehicles in for maintenance or repair.
It's not until you arrive in the body shop and see the early-70's vintage Corvette being prepped for a paint job that you realize something unique is going on here.
"Rick in the body shop has had to take what you saw: focus on a Corvette and try to make that look beautiful; and tomorrow he's working on an ambulance; and by Thursday we'll have a new bus delivered, and he will have to strip that down," says Nick Greco, accounts manager for HealthEast Transportation. "That's not uncommon for him, and he doesn't miss a beat. He just says, 'Okay, bring it in.'"
As the accounts manager, Greco is responsible for marketing HealthEast's vehicle maintenance services to the public and to other fleets. He admits that explaining what goes on in the Front Street shops can be a challenge. "When people hear the name HealthEast Care System, it doesn't equate to HealthEast vehicle services," he says. "The trade shows are where we typically get the most questions, because they walk by and see our name HealthEast' They say, 'HealthEast, what are you doing here?'"
What is HealthEast doing here?
To find the answer to that question, you have go back eight years, to a time when the U.S. Medicare program began to hold back reimbursement money for many healthcare services. Healthcare costs were rising, and Medicare needed to find ways to save money.
"Looking forward, a number of things were going to happen: our reimbursements are going to decrease; our volumes will continue to increase," explains senior director Brad Anderson. "We took a look at a couple of options. One was to downsize the fleet and reduce the staff; the other was to diversify the risk.
"We looked at each of our support services for our ambulance division and said that these are centers of excellence," he continues. "So, if we are doing a good job managing our fleet and we have resources available—since the maintenance facility is there 24/7—it's a question of staffing, so why not start looking at that as a retail potential to try to offset some of the costs and some of the declining reimbursements?"
The fleet's existing resources included a body shop, a shop for outfitting transit vans and ambulances, and of course the main maintenance shop. The staff developed a business plan stating that each of those divisions would become budget-neutral, so that they would no longer be cost centers, and they could possibly generate revenue.
The reasons for HealthEast to sell maintenance services go beyond financial considerations, however. According to Anderson, there is also a humanitarian side to the issue:
"If we can manage our costs, those costs then don't have to be transferred to the people who are using our services," he says. "A number of the patients we transfer are contracted, but for those patients whose insurance falls between the cracks, and they end up having to pay for these services, one of the things we can do is hold down the costs.
"And it also allows us to do a few more things with the community," he continues. "We do standby service for marathons and that sort of thing. So we're able to do community sponsored events, and do them because we have some of that availability, because of resources and because of dollars we've been able to save through those reduced costs."
While business development director Ron Gruening spends much of his time working with corporate clients, he also sees the impact his organization has on the neighborhood. "In a local sense, we have had residents walk here from a couple blocks over and ask, 'Hey, do you do this?' As you saw, we don't have signage out here identifying us as a retail store. But, we've been able to go to their home, get their vehicle here, fix it; I think that's a good community partner with that one contact."
Gruening is a true believer. To show the effect HealthEast Transportation has on the St. Paul community, he goes to his dry erase board and sketches out a diagram of the transportation department's services, clients and partners until the board is filled with circles and arrows. It's a spiderweb of action and involvement that shows how clever Gruening and his staff have been at blending revenue-enhancement with public service.
One of Gruening's recent successes is a mentoring partnership with nearby Dakota County Technical College, whereby students in the automotive technician program can get real-world training and experience from HealthEast Transportation.
"By bringing students in here, we can mentor them, teach them, keep them up to date with the technology we're seeing," explains vehicle maintenance supervisor John Kabat. "Because something we might see on an ambulance today, it's coming in a car tomorrow, if it's not already there.
"Part of that partnership is, if we need some better training on this, or we've got some new guys who need a chassis refresher, we can go to the guys at the college and say, 'This is what we need,' Kabat goes on, "and they say, 'No problem,' and we'll set up a day or an evening when we can go on there, get the refresher, and be all taken care of."
"I think that we're unique in how we're using the property, how we're using the resources, whether it's the physical plant or the staff," Gruening says. "I think that's the unique delivery. I think it's created a lot of growth for our staff; they're not in a robotic environment, where every day they're encountering the exact same thing. There are a lot of new challenges working here that they don't find at other employers."
STANDARD OF SERVICE
"We've had days where we'll work on an ice auger, then in the afternoon we'll work on a backhoe. If it runs, we'll work on it," says vehicle maintenance supervisor John Kabat. "Our philosophy is, we don't care if it's your ice auger, your weed whacker, your backhoe, or whatever you have; it's getting the same treatment, the same service that we give our ambulances."
Kabat supervises two other technicians in the main garage, in addition to two technicians who work exclusively on outfitting police squad cars for clients, and one body shop technician. For such a small crew, it's amazing what they do—everyone on staff is ASE Certified, and nothing at HealthEast is outsourced.
"Other ambulance services that will service their own fleet; they don't service them to the point we do, taking care of everything from bumper to bumper; they'll send it out for body work, they'll send it out for major engine, but if it's oil changes or brakes, they'll do that in-house," Kabat explains. "We're unique in that we'll do bumper to bumper."
Kabat points out his ASE Certified Master Diesel Technician, Marco Padilla, as an example of what the HealthEast staff is capable of. "Anything diesel I've ever thought of, he knows ten times more," Kabat says. "We give everything to him; he can do an engine in a day; he's just an amazing guy."
Because HealthEast has extensive experience outfitting ambulances and police cars, the electrical shop can handle virtually anything. The technicians have received factory training from major police and fire accessory outfitters like Road Rescue and Wheel Coach, and actually handle warranty work for both manufacturers. In fact, competing ambulance services often end up bringing their vehicles to HealthEast for their warranty work.
"The PM program goes further," Kabat explains. "We've been at 10,000 miles for about a year and a half, and we've been noticing with oil analysis that we can actually go further. We're looking to pull it out maybe 15 to 20 thousand miles. The only reason I think 20 thousand is about the maximum is at that point you're wearing out brakes and tires and things like that. The oil might still be good but you've still got to bring it back because of the wear and tear they get."
For Kabat and everyone else in the shop, quality maintenance is a personal matter.
"We work on my car," he says with a grin. "Everybody in the shop brings their cars in. A lot of our EMTs and paramedics bring theirs in, and I get calls daily from all the hospitals and care centers saying, 'Hey, can you get my car in?'
"Any HealthEast employee anywhere in the system gets a discount," Kabat explains. "They bring it in, they can get their car done while they're at work, and save some money, so they're happy. Then you find out they had their friends get something done on their car, so we get more and more business just by word of mouth."
It's not just vehicle owners who are coming to HealthEast for help; now vehicle manufacturers are knocking on the door as well.
Kabat and Gruening are excited about a new relationship with DaimlerChrysler wherein the OEM is directly addressing some of HealthEast's suspension and acoustics issues on their two Sprinter ambulances, and HealthEast is helping the OEM design a more durable emergency vehicle.
"We're in a position that, geographically, is of interest to DaimlerChrysler," says Gruening. "They want to work with us, so we've recently had a visit here to begin that."
That could prove to be a very fruitful relationship, as the fleet plans to add more Sprinters to the mix. "As far as maintenance goes," Kabat says, "the Sprinters pay for themselves."
For Kabat, the most satisfying part of the job is knowing that the ambulances he works on are helping keep people alive. And the most stressful part of the job is knowing that the ambulances he works on are helping keep people alive.
"It has to be correct," he says. "Comebacks have to be kept to zero, basically.
"When I started here three years ago, I left a job that I was unhappy at," Kabat recalls. "I was stressed out; I'd go home, and stress would go into my family. But every day I wake up and as I come here I know I'm going to have fun at work, because everybody is so great. And at the end of the day, even if I had the worst day, nothing goes right, I know that all the trucks that are on the road are helping people.
"When I worked at other places," he says, "when I did a brake job' you got a brake job. Here, you do a PM on an ambulance, you take care of something, every time that ambulance leaves the lot it's helping people; it's doing good for the community."
Is creating a retail maintenance business going to work for any fleet? Probably not, but the folks at HealthEast have certainly made it work for them.
In fact, business is so good, Ron Gruening finds himself facing "a good new problem:"
"We have added staff and added hours; our physical limitation has been reached," he says. "So, this summer, we're looking at moving into an adjacent property, probably four times this size. If that happens for us, I'll just have to reinvent the wheel, just make the wheel bigger and faster."
That's a pretty amazing turnaround for a maintenance organization that was considering cutting staff and services eight years ago. Turns out, these people aren't just good at fixing vehicles; they're pretty talented businessmen as well.
"If somebody was thinking about diversifying, my advice would be to really think through it and develop a comprehensive business plan before they just put a shingle on their door and say, 'We're open for retail business,' says Anderson. "It's a completely different animal from managing your own fleet.
"Develop a plan so you can win the support of your organization before you do it," he concludes. "HealthEast has allowed us the flexibility to go into just about any market that we're able to, to offset the costs of operating our business, and reduce the cost to the community."