1. When Cutting Profits Makes Sense
2014 Forbes.com LLC™ All Rights Reserved
Matt Miguelena
Matt Miguelena worked at Healthcare Corporation of America (HCA),
one of America’s largest healthcare companies, for nearly two decades
before opting out to set up his own venture. Disillusioned with the
increasing monetization of healthcare, in 2007 he created Allied
Healthcare Professionals, a home health agency in California that
focuses on doing healthcare “the old-school way,” he says.
It’s a for-profit enterprise that’s as concerned about social impact as it is
about financial returns—or as the company’s motto reads, “Putting the
care back in healthcare.” Allied is a social enterprise, without labeling
itself one.
Ben Thurman recently spoke with Matt about the challenges of
delivering quality healthcare.
Q: You spent 17 years in the corporate environment. What
was your experience in mainstream healthcare?
Miguelena: What I saw increasingly over the years was less attention focused on patient care and
more attention focused on benchmarks. It was turning more and more into a numbers game where
the hospital is touting, “We’re providing the best healthcare for you and your loved ones,” but at the
administration level they’re saying, “Yes, but we have to meet these budget criteria.” Obviously for
any business you have to do that, but it was getting to the point where the focus was taken off
healthcare and placed on numbers.
I called it, “dying a professional death.” You go to school to learn how to take care of human beings.
Then you get into a hospital setting and you have the opportunity to do that, but you don’t have the
opportunity to do it as well as you could.
Q: What motivated you to start your own company?
Miguelena: I am astounded at the billions of dollars of profit that corporate healthcare companies
make. It’s too much. So, my question came down to this: how much profit is enough? Instead of
making $1.3 billion in profit, could you make $500 million and put the rest back into
healthcare? That’s when I came back with the concept for Allied: “putting the care back in
healthcare.” I put together a company where we don’t focus on the budgets—we don’t have any
MBAs or business-type people in our office—we focus on quality healthcare.
Q: How do you maintain that balance between profit and social impact? What is
success for you?
Miguelena: As a business owner I’ve had to back off on some of my ideals because I do see the
challenges faced when you have to keep your doors open for business. So I can sort of appreciate
the model that I saw about sticking to a budget, but I was able to come to some middle ground. I’m
not going to be the most profitable guy, but the quality of my care will be outstanding. And to me
that’s successful.
Once we accepted that we’re not going to be the richest company in town and put our effort into
taking care of the patients, the relationship we have with our patients and the reputation we have in
the community has really fueled our referrals.
Q: Why did you choose to focus on home health, specifically?

2. Miguelena: I worked in home health for a while and kept hearing patients say, “Well, the other
therapist that came never did that.” I found that there weren’t a lot of people doing a really good job,
especially in rehabbing patients at home. It really comes down to the ethics and morals of the
therapist: when you’re in a 90-year-old lady’s home and she’s got dementia, she’s not going to
remember what you did, so who knows what went on? That’s a big responsibility for us: to take care
of these patients—especially when no one’s looking.
Q: Because “no one’s looking,” is the quality of home health one of the bigger
problems in US healthcare?
Miguelena: Yes, there’s a lot of fraud and abuse in home health in America. Our government is
doing an excellent job of cracking down on it; they’ve put in some really good measures to catch
people who are trying to cheat the system. It makes it harder for those of us who are ethical—there’s
a lot more paperwork and rules to follow—but they have to do something to police those areas that
are fraudulent.
Q: What do you do if a patient is not covered by medical insurance and doesn’t have
the ability to pay?
Miguelena: We built into our business plan a provision that allows to see a certain percentage of
patients that do not have the ability to pay.
What I’m trying to do is not let a bunch of red tape or bureaucracy stand in the way of providing
patients with what they need. Where I can, I try to assist patients. We look at everything that
surrounds the patient, and see how we can best use the resources that the patient has as well as the
resources of the community and the resources of my company. I think hospitals are too big of an
entity to care about one individual that much.
Q: Right now you operate in a small geographic area. Do you have ambitions to
scale?
Miguelena: We’ve reached a volume that we can handle and repeat the quality each time. Our
service area is limited to a 60-mile corridor, and I don’t want to expand beyond that. I really want to
focus on the area that we’re in, and I want to be able to repeat the quality of care every single
treatment. If I grow to the point where some of my competitors are, I don’t think I can be comfortable
saying, “Yes, we nailed it a hundred times out of a hundred.”
Q: How optimistic are you that the success of agencies such as yourself will change
the landscape of healthcare in America?
Miguelena: A lot of home health agencies, especially here in California, are owned and operated
by business people who invest because they are profit-making companies. There are two or three of
us in this area that are owned and operated by licensed healthcare professionals, so we approach
our work in a different respect. We come from the perspective of the patient first, business second. I
think that’s a really strong model, and I believe that sooner or later, some of these models that are all
about business are not going to be successful with the changes that are coming up in healthcare.
Q: What piece of business advice has been most helpful to you?
Miguelena: Keep it simple, stupid.
Q: What advice would you give others who aspire to create a socially-minded
company in healthcare?
Miguelena: You have to understand at the beginning that you’re not going to be very profitable, or
as profitable as others in your industry. Once you accept that, you can be more socially-
minded. You have to be passionate about providing healthcare—that has to be the primary motive.
This story, written by Ben Thurman, was brought to you in partnership with Dowser.org, a media
organization that reports on social innovation, focusing on the question: Who is solving what and
how?