0:00:01 - David Williams
Behavioral health is a challenge everywhere, but there are special challenges when it comes to behavioral health in long-term care. Today's guest has helped crack the code. Hi everyone, I'm David Williams, president of strategy consulting firm Health Business Group and host of the Health Biz Podcast, a weekly show where I interview top health care leaders about their lives and careers. My guest today is Rocco Coniglio, serial business builder in health care currently at Red Rock Capital and careers. My guest today is Rocco Coniglio, serial business builder in healthcare currently at Red Rock Capital and Advisory. If you like the show, which I'm sure you will, please subscribe and leave a review. Rocco, welcome to the Health Biz Podcast.
0:00:35 - Rocco Coniglio
Thank you, David. Thanks for having me.
0:00:41 - David Williams
We're going to talk about what you're up to now, but I want to roll back the clock and learn a little bit about your background. What was your childhood like and any childhood influences that have stuck with you throughout your career?
0:00:49 - Rocco Coniglio
Yeah, I mean I think I had a fairly normal childhood, grew up in Pittsburgh, Pennsylvania. I was born and raised there, huge Steelers fan, huge Penguins fan and only child. And you know I had a pretty close family, half Greek, half Italian, so a pretty, I would say, a pretty volatile mix there. So a lot of passion and those ethnicities. But you know I grew up playing a lot of sports. You know football was a big one for me. I did a little bit of track and field, did a little bit of wrestling, ended up going to school at the University of Mount Union in Ohio. Going to school at the University of Mount Union in Ohio, played college football there, had a great run while I was there. We were in the Division III level but played five seasons, won four national championships, that's pretty awesome During that course of time.
0:01:56 - David Williams
Did you know about that school ahead of time? How'd you learn about it in the first?
0:01:59 - Rocco Coniglio
place. I did, yeah, I mean I knew that they had a good football program. Um, I did, yeah, I mean I knew that they had a good football program. Um, I knew that I wasn't a division one prospect, and so I wanted to go somewhere that, uh, I'd have an opportunity to play but also be on a team that was going to win, because losing is miserable. And um, and that was advice from my high school coach, and uh, and so, um, I went and went on a visit. It wasn't too far away from Pittsburgh, but it was far enough away and it was a great decision. I still have tons of relationships with guys there that I played with and you know the program.
Really, I got there at the perfect time because the program at that time I think they had won championships in 93 and 95 and 96. And then, when I got there, we went on a run and won in 97, 98, lost in 99, and then won again in 2000 and 2001. And Larry Karras was the head coach there and just an amazing coaching staff led by him, and he's now in the College Football Hall of Fame and, yeah, I just have a lot of appreciation and respect for what I learned there being a part of the program but also just a ton of stuff that you can take away from those coaches that uh apply in in real life. Um, so I'm I'm really thankful that I was a part of that team and uh got to, you know, get exposure to the, to the coaching staff there, cause they were an excellent group.
0:03:39 - David Williams
What's uh? What was your position?
0:03:42 - Rocco Coniglio
I played middle linebacker Nice. I played middle linebacker. I was yeah, and I um so more I was more on the science side. In my undergrad spent 20 years in Northeast Ohio and my career started with McKesson. For a couple of years was selling in the med-surg business, Cambridge Heart, was a short stint there for about a year with an electrophysiology play and spent four years at Gambro. Was nephrology critical care, kind of selling into that space and covered cleveland and pittsburgh, so like mostly western pa and northeast ohio. And then moved on to Medtronic for three years was selling into the or so surgical sales with medtronic. For three years was selling into the OR so surgical sales with Medtronic and that was a great company to work for.
And then my last real employment was with Spectranetics. Was there for four years, was pretty specialized. That was probably my favorite job. Pretty specialized that was. That was probably my favorite job. Yeah, it was uh. Electrophysiology, cardiac surgery, interventional cardiology and peripheral vascular surgery. Um and uh had a lot of fun doing that. Um, great culture, wonderful leadership team there. Um, scott drake was the CEO there and really created a a really unique culture that um probably didn't see much of, and you know some of the other companies that I was in, but, uh, I, um, I really appreciated the experience that I got there.
0:05:58 - David Williams
No, that's good. So you said that was sort of your last paid employment. And then, uh, take it, you founded the next company, psych360?.
0:06:06 - Rocco Coniglio
Yeah, so I actually co-founded that company with my wife, nicole, and she's an acute care NP and a psych NP and we co-founded that company in 2015 while I was at SpectraNetics. So the idea, when you're founding a company, there's no money coming in the door and it's much easier to take that risk when you're younger in your career and we weren't at that stage, so it was probably not a great time to start a business, but if you're going to start one when you're mid-career you have a family and everything if you can do it while you're, you know, while you've got some other income source like that's a huge benefit. So I did that. I was really doing very well at Spectranetics. So, you know, from the standpoint of doing two things at once, I don't think anyone really cared what I was doing because I was performing well, and so I was able to hold that job down for two and a half years before I had to really make a decision to to move on.
Um and uh. Unfortunately, in 2017, spectranetics got bought out by Phillips Healthcare, and so I knew at that point uh, that was announced, I believe, in June of uh 2017. Yeah, I knew at that point that, like, a lot of changes were coming Right. Um, and it was getting really unsustainable. I mean, had three little girls. Um, my dad had dementia. We were primary caregiver for him. Yeah, um, running our own business and keeping a W2 job.
0:07:57 - David Williams
It was like yeah, it's not going to continue long term. It's tougher than being a linebacker. Yeah, Uh agreed agreed more to keep your eye on. I don't know if there's more or less tackling, though that's a really good question.
0:08:10 - Rocco Coniglio
I'd have to think about that, yeah, yeah, it's a it's a close one.
0:08:13 - David Williams
Probably depends on the game okay, so yeah so it seems like the concept was about uh, mental health care in long-term care, is that right it? That sounds like an interesting niche. How'd that come about?
0:08:22 - Rocco Coniglio
Well, it was really Nicole. I mean, she was working in the long-term care setting in 2012. And she came home one day and I was at Medtronic at the time and she said look, I'm getting all these patients. I think there's a business opportunity here. I'd love to specialize in this area. I need to go back to school for another two years to get board certified in psych, mental health in order to really see this through and be able to run a business like this. And I said all right, let's do it. So she went back to school when she graduated in spring, let's say, May of 2015. And she had a license in July. We started the business in July, got our first couple of contracts in August and it was, you know, off to the races from that point forward.
0:09:13 - David Williams
And what's different about mental health care in long term care compared to some other setting?
0:09:21 - Rocco Coniglio
Well, I think what really struck Nicole when she identified that niche was that she was in primary care and she was getting she was having to deal with a lot of the specialty of psychiatry and mental health as a primary care provider.
And you know a lot of primary care physicians and advanced practice nurses are not comfortable with those types of medications and they just don't have a lot of training and experience in that area. So from that standpoint, what happens is in the long-term care setting is that there's not a ton of specialists that practice in psychiatry in that particular area and in 2015, it was much worse than it is today. And the other component to long-term care is that if you're a psychiatrist or a psych MP and you're practicing an outpatient or you're practicing in an inpatient setting, you have much more flexibility in your prescriptive process and in long-term care those medications are very highly regulated. So psychotropic medications are highly regulated. Now they became more regulated as time went on from 2015 go forward, and that had to do with the mega rule, with CMS. There were three phases to that mega rule and long-term care was a component to that and psychotropic medication was a component to the. Long-term care was a component to that and psychotropic medication was a was a component of the long-term care.
0:11:07 - David Williams
Um, uh, regulation of the cms mega rule that rolled out in three phases over the course of about four or five years, um, and that rule rocker was was in order to uh prevent, uh say, nursing homes from taking care of their patients in a way by putting on medications that might not be appropriate for them. That might make it easier for them to care for them, but wasn't right. Was that some of the impetus for it?
0:11:36 - Rocco Coniglio
Spot on. So if you look at the history of the nursing home industry, really you could take it all the way back to like the 1970s, going to fund mental health hospitals where you would have more severe mental illness and that's where they could provide care. So when those patients were no longer cared for in that particular setting, they basically went to three places One was homeless, another one was being incarcerated and another one was nursing homes. And nursing homes were not equipped and not designed to take psych patients In a nursing home setting. They physically restrained them and then that got regulated. And then they went and began to chemically restrain patients. And you chemically restrain patients mostly with antipsychotics.
Antipsychotics in a geriatric population have a black box warning.
So you know it's a really severe medication to prescribe as a first-line medication in that particular patient population.
But it's common practice in the hospital setting to prescribe things like Seroquel and Haldol and do it off-label or without the appropriate diagnosis. And so as time went on, you know in the early 2000s they instituted gradual dose reductions on antipsychotic medications in long-term care. And then those gradual dose reductions, those GDR regulations in the long-term care setting, expanded with the CMS mega rule to all categories of psychotropic medications. So, and then you know the diagnosis for those medications became more narrow as well, specifically on psychotropic or specifically on antipsychotic medications. So if you're not complying with that in the long-term care setting, then you're setting yourself up for risk associated with your state and federal surveys. That all is a component of your five-star rating and your five-star rating is going to allow you to get referrals from hospitals. So if you're three stars and above, you're able to get your short-term skilled patients in the building and those are more lucrative for the nursing homes because they are able to build Medicare, whereas typically the long-term patients are Medicaid patients and that's a little bit more challenging to make it financially productive.
0:14:46 - David Williams
You talked about psychiatrists and long-term care. The truth is there's a shortage of psychiatrists, and you don't actually see that many physicians typically in a long-term care facility of any specialty, and so I believe that you've done some work to leverage other you know other clinicians, including advanced practice nurses, if I've understood that right, how do you think about the labor model for what you do?
0:15:08 - Rocco Coniglio
Yeah, we were really worried about that bottleneck when we first started the business because there weren't that many universities with psych NP programs in 2015. And you know, frankly, psychiatrists kind of have their pick of what they want to do and long-term care in nursing homes is not like the first thing that they're going to jump at. They tend to gravitate more towards inpatient work, outpatient work and nursing homes tend to be kind of like a side gig for, you know, a little bit extra money here and there, and so there wasn't a whole lot of focus. There was one particular company that had scaled a model called Met Options out of Connecticut. They're no longer in existence, but there was. There was a scaled, successful model at that time. So that gave us some confidence that there was an opportunity to perfect that model.
When you look at it from a labor market standpoint, what we did was we started to. We started really early in 2016. We started to approach any university that has a psych NP program, offered clinical rotations for their students, and that was probably one of the smartest things we did, because, as more universities saw the need and began to develop those psych NP programs, we ended up having over 20 contracts with the universities across the country to be able to do clinical rotations. And then when they graduated from those programs, we had kind of the pick of the litter when they came out of those programs and what was attractive to them. We made nursing home, you know work a little bit more attractive than it otherwise would be, because, you know, it was a company that was an NP driven, np run company.
It wasn't necessarily, yeah, driven NP run company. It wasn't necessarily um, um, it wasn't necessarily uh, anything where you had, um, you know it was like a physician driven company, and not that there's anything wrong with that, it's just that, um, I think that the nurse practitioner group took a pride in being able to deliver high quality care as APRNs and not having to necessarily rely on, you know, physicians to be able to deliver that care. And I'll say there's, I think there's there's a lot of um, there's a lot of politics between you know, aprns and what they can do and what the scope is versus what physicians can do. And, um, you know, I think that there's a ton of great physicians out there, there's a ton of great NPs out there. And on the flip side, I've seen, you know, I've seen bad doctors and I've seen bad nurse practitioners. You just have to make really good hiring decisions and make sure that you know the culture is right and I think we had a really high quality product and it was well recognized within the long-term care.
0:18:21 - David Williams
Now what about telehealth? Telehealth is something that was leveraged. Maybe after you got the company going, especially during the pandemic, Was telehealth an important part of the delivery model.
0:18:34 - Rocco Coniglio
So that's a great question. Telehealth when we started, we did not use telehealth at all. There was a company out there called Forefront Telecare that was primarily doing telepsychiatry in the nursing home setting and they were focused on rural markets. Because you had to be At that time, prior to the pandemic, you were very restricted in where you could deliver telehealth.
When the pandemic hit, that threw a lot of us that were coming in person for a loop I mean, it was like in March of 2020, it was very uncertain, you know, it was wild. But we quickly figured out like, if we're going to sustain this business and survive this, we had to use telehealth. So within a couple of months, we were probably doing north of 70% of had to use telehealth. So within a couple of months, we were probably doing north of 70% of our visits via telehealth, and that was a testament to the team that we had at that time. They really everybody kind of pulled together and we changed a lot of operational things quickly in order to continue to deliver care in that market but still navigate the infection control processes that were being put in place to navigate COVID.
0:19:55 - David Williams
And now did you merge this company with another company? I'm sort of looking at the path.
0:20:00 - Rocco Coniglio
It looked like there's a combination that occurred at some point down the road at the path that looked like there's a combination that occurred at some point down the road. Yeah, we. So what we did was in August of 2022, there was a relationship that had developed from late 2021 with the CEO of Mindcare, and, and they put an LOI together in May of 22. And, and we ended up closing the deal in August of 22. They didn't have a long-term care vertical. They operate in the acute care space, delivering psychiatric med management care to the emergency room setting and had one of the largest footprints in the acute care setting.
And, um, and we felt like, you know, from a philosophical standpoint, um, they understood mental health, but they didn't, they didn't really know the long-term care market. And it was kind of a nice match because, um, we felt like we could bring a lot of value from the long-term care side and a couple other things that I think we did really well. And so, you know, we made the decision in August of 22 to finalize that deal, and then they brought Nicole and I on and relocated us to Nashville Got it.
All right.
0:21:16 - David Williams
Yeah, so that sounds like a good process. I know you're involved in, you know, putting everything together, which is always a fair amount of effort.
0:21:27 - Rocco Coniglio
What are you focusing your time on these days?
Well, we did about 18 months post-acquisition and transitioned Psych360 into MindCare. At that time, we decided to really focus our efforts on looking at healthcare acquisitions, and so that's where we started RedRock Capital and Advisory, and most of my days now are spent evaluating different types of deals that are out in the marketplace. Some of those are deals that Nicole and I could potentially be operators in, and some of those deals are more for passive investment or, potentially, board or strategic advisor roles in a more of an independent sponsor type of a role and a more of an independent sponsor type of a role. So, you know, we've we've really, you know, have done a lot of work over the last few months to to get that business going and and and create a lot of healthcare deal flow over the course of that time, build the investor network and and. So we're, you know we're enjoying that, that part of the process. Now it's something that is fairly new to us, but we feel like, given our operational experience in this particular market, there's a lot of value we can add.
0:23:00 - David Williams
So my final question is one that I ask all the guests, and it has to do with any book recommendations. I wonder if you've had a chance to read anything good lately, anything that you might recommend to the audience.
0:23:14 - Rocco Coniglio
The only thing I've been reading lately is Offering Memorandums.
0:23:17 - David Williams
Yeah, and Some people call those a book.
0:23:21 - Rocco Coniglio
You know.
Well, they can be. Yeah, they definitely can be a book. I would say Harvard Business Review put out a book on entrepreneurship through acquisition and I think that that is it's good, because it's educational around. You know entrepreneurship. I think there's a lot of different ways you go about it. I'm passionate about that in particular and I just mentioned that because you don't always have to found a company. You don't have to take it from zero to PE exit. You can.
There's a. You know there's a trend right now with a lot of baby boomers that have been entrepreneurs and business owners in the small business area for decades and you know they're looking to retire and they've built good businesses, good solid businesses that can be acquired by a lot of people that you know even don't potentially have a lot of access to capital. And there's a. There's a lot of unique and creative ways to do that and, um, I think in in many respects, it could be um, you know it could be more beneficial and easier than starting something from scratch because you know, if you, if you profitable business, um, you don't have to really do what I did, which was W2, and balance that whole thing Um, especially if you're at a different stage in your life, um where you can't take that risk. So, um, so, so that's, that's one book that I would. I would say is a is a worthwhile read.
0:25:02 - David Williams
That sounds like a good choice and I haven't actually heard that one recommended before, but it sounds good and more interesting in some ways than some of those offering memorandums that you are looking at or just memoranda. Well, Rocco Coniglio, serial business builder in healthcare, currently at Red Rock Capital and advisory, Thank you for joining me today on the Health Biz Podcast.
0:25:24 - Rocco Coniglio
Thanks for having me, david, appreciate it.
0:25:27 - David Williams
You've been listening to the Health Biz Podcast with me, David Williams, President of Health Business Group. I conduct in-depth interviews with leaders in healthcare, business and policy. If you like what you hear, go ahead and subscribe on your favorite service. While you're at it, go ahead and subscribe on your favorite service. While you're at it, go ahead and subscribe on your second and third favorite services as well. There's more good stuff to come and you won't want to miss an episode. If your organization is seeking strategy consulting services in healthcare, check out our website healthbusinessgroupcom.