The Worlds Top Aging Care Center
Economic development team working to build $44 billion healthcare cluster into an innovation-driven jobs machine
Louisville this year has been successfully establishing a world leadership role in the lifelong wellness and aging care sector. A quickly rising star for economic development, the sector put another 350 new jobs in Kentucky in 2011 and advanced forward-thinking growth plans for up to 5,500 more jobs in the next five years.
Seeds of innovation have been sewn to both grow and attract young companies in the sector to Louisville through University of Louisville’s Nucleus life sciences center and, under its auspices, Innovate LTC (aka the International Center for Long Term Care Innovation).
A lifelong wellness and aging care business accelerator, Innovate LTC is the brainchild of its CEO, John Reinhart, and Joe Steier, president/CEO of Signature HealthCARE, which moved to Louisville from south Florida in 2010.
For the young companies beginning to shelter under the umbrella services of Innovate LTC, Signature HealthCARE also created a support mechanism called the Signature Research Institute. A private nonprofit research center with academic coordination, SRI will compile data from the companies as they develop for study of innovation modeling.
Additionally, a governance committee including Nucleus, Innovate LTC and Greater Louisville Inc. (GLI)?established an Aging Innovation Fund with a new fund manager to help everyone raise real dollars for growth.
UofL’s three-year-old Nucleus operation remains the central point for science, innovation and health-related companies interested in locating in Louisville.
Located now at MedCenter 3 in modern space at Jefferson and Brook in downtown, Nucleus broke ground nearby in July on an eight-story, $18 million structure that will become its permanent home; the 120,000-s.f. building is only the first piece of a complex that will fill a full block.
Meanwhile, Mayor Greg Fischer has hired returning Louisvillian Ted Smith as the city’s new director of innovation both to support company growth endeavors such as Innovate LTC and to foster innovation inside government circles.
“We are working with GLI and Nucleus,” Smith said, “to create an ambassador program that will offer support to this sector for visiting companies so that when they come in to visit they will be greeted by aging-care experts and ‘get the full Monty’ – all the talking points about this area.”
Since arriving, Smith has helped expand the target sector list to include healthcare IT companies.
“There’s a tremendous opportunity for our city to include some of these type of technologies relevant to wellness and aging.”
Louisville aging-care sector unrivaled
“We are not just trying to build a reputation. We already have the numbers that prove out we are the world leader in this category,” said Eileen Pickett, GLI’s senior vice president of community and economic development. “There are more headquarters of companies involved in wellness and aging care here than anywhere else in the United States.”
There are 13,930 jobs, producing $44 billion in revenue, directly in this cluster initiative, Pickett said, speaking in October. Additional large corporations in nursing home management and senior care services categories are expressing interest in Louisville, she said.
The city’s existing corporate healthcare sector, in the meantime, is contributing to a growing sense of momentum:
• Humana announced an addition of 200 new jobs in its Medicare business sector in early fall.
• Trilogy Health Services LLC, which operates senior-living campuses in five states, decided to expand its Louisville headquarters with an investment of $1.7 million and 50 new jobs that will boost its annual local payroll by about $3 million.
• Kindred Healthcare announced the relocation of 100 executive positions from St. Louis to new space in downtown Louisville, tied to its $1.3 billion acquisition of RehabCare.
The lifelong wellness and aging-care initiative is among four business clusters GLI has targeted for focused economic development efforts. Innovate LTC’s initial steps the past two years have given definite momentum to Louisville’s efforts to increase global public outreach, which is part of the growth plan.
New, larger office space for Innovate LTC is being prepared in MedCenter 3 and should be occupied around the end of November. Its eventual home in 18 to 20 months at the Haymarket Building is under construction. A lean team of three full-time staffers researches companies online and director Reinhart travels to events, including internationally, carrying out its “Research, Validate and Deliver” methodology.
Innovate LTC receives about $1.5 million in operating funds from Signature and will obtain another $1.5 million from the state for the Haymarket site for future growth facilities.
A shaky global economic environment has not significantly impacted efforts to move the lifelong wellness and aging-care sector forward.
Many are evaluated, few are chosen
“No matter who you are in business development, you are looking at the global economy,” Reinhart said. “But it behooves us to look at companies for Innovate LTC that are value-driven and value-based. Luxury goods in wellness and aging are not our focus, because regular and tangible changes are not postponed.”
As of early October, Innovate LTC had assessed 105 potential business opportunities, of which 36 were proposals arising internal to Signature and 69 externally. Six will immediately begin to participate in research efforts. Three have provided letters of intent to begin validation and delivery support efforts so their companies’ growth can take place within Innovate LTC in Louisville.
The incubator/accelerator’s team passed or held off on 34 proposed commercializations. For another 35 opportunities, the potential partner entities are in the process of determining how to work with the incubator, or the accelerator team is conducting due diligence around the various company concepts; 18 of these are already based in Kentucky.
“The companies that choose to work with us, and vice versa, in most cases already exist and have early ‘beta’ projects and are ready to expand their reach,” Reinhart said.
Early in 2010, Signature began Innovate LTC with an intra-preneur model, using ideas from groups of its own employees to develop into separate new endeavors with support from in-house business planning and testing for products or services. Seven were chosen and those companies continue to track forward.
Outside recruitment is bringing others interested in the aging care sector to Louisville.
They include, for example, the flooring company SorbaShock (sorbashock.com) from Fort Wayne, Ind., whose product seeks to reduce injuries from falls.
SorbaShock will relocate its primary offices but not its manufacturing operations. It came to Innovate LTC seeking support for back office operations, validation of scalability issues and access to knowledge from others providing quality of life products to aging populations.
Another company, Vita-care.eu, has a therapeutic motion-simulation product developed in Holland. Developed for children with cerebral palsy, it can allow older patients relaxed movement simulating pleasurable activities such as horseback riding.
Innovate LTC has built outreach support and presentation opportunities into Louisville’s medical community through its special Runway Showcases of products and services, the first of which took place in July. IDEA hour events are hosted each month at UofL’s Clinical and Translational Research Building.
These social events to encourage collaboration by Louisville’s thought leaders in aging-care technologies, services and initiatives. The forums include researchers, industry experts and entrepreneurs to leverage the strengths within the regional aging care innovation cluster.
Innovate LTC is also co-sponsor of The FastTrac® TechVenture™ program, being presented in conjunction with the Ewing Marion Kauffman Foundation. This program is for entrepreneurs of technology-based startup companies, particularly those in the fields of life sciences, general technology, engineering and applied sciences.
EPCOT-like innovation center
But perhaps the most significant concept from Innovate LTC for the general public as well as the research and corporate communities is Reinhart’s vision of building a “multi-experience generation center,” a first-of-its-kind consumer-engagement setting for amusement, innovation and events built around new wellness and aging-living models, including housing concepts. It is envisioned as akin to a Disney EPCOT Center model, an Apple anchor store or the Sony Wonder Technology Lab concept in New York where visitors play with new products, he said.
“We are seeking out the world’s best innovation, hoping to expand our model of revenue-generation, excitement around new innovation and client revenue,” Reinhart said.
Other partnerships under expansion and development in Innovate LTC’s mission are working more with the University of Kentucky and its UK Healthcare system in addition to UofL’s resources such as the Office of Technology Transfer.
“We see the regionalism building and the collaboration on innovation at this level as a game changer, and this is exciting.” Reinhart said.
State government has supported regionalism and funding will continue for this area.
“Kentucky’s support of the growing bioscience and life science cluster in the Louisville area has included state funding for both infrastructure and high-tech companies,” said Gene Fuqua, executive director of the Office of Commercialization and Innovation within the state Cabinet for Economic Development. “To help get the Nucleus project off the ground, $3 million was awarded to assist in developing the life science research park currently under construction at the University of Louisville’s 30-block Haymarket property in downtown Louisville.”
Specific government funding has gone to companies that fall into the life science cluster, which includes lifelong wellness and aging care.
“Regenerex, PGXL Laboratories and Louisville Bioscience all received awards from the Cabinet’s SBIR-STTR Matching Funds program,” Fuqua said. “We’ve also funded stand-alone companies, such as Turbo Wheelchairs, which, thanks to the same SBIR-STTR program, moved from South Carolina to Louisville in 2008 to develop their Merlexi Craft line of lightweight and durable wheelchairs.
“We’re confident that the foundation being laid today will facilitate the development of a world-class center of innovation and technology that will serve the needs of our nation’s elderly and long-term care patients.”
Another player in the long-term healthcare market, University of Louisville Geriatrics, surpassed the half-million-dollar fundraising mark necessary to build out new clinical space in the UofL Health Care Outpatient Center (HCOC). The new UofL Geriatrics site will be located on the first floor of HCOC at 401 E. Chestnut St. and is expected to be open shortly.
Its board has begun strategic visioning to include its designation as a “Center of Excellence” on a national level and within the university system, said Dr. James O’Brien, chair of the Department of Family and Geriatric Medicine, and UofL Geriatrics’ Board Chair Mac McClure.
Organizations that establish centers of excellence in education, clinical care, or research, such as the University of Pittsburgh’s Aging Institute, are committed to providing cutting edge innovations in their fields. Their endeavors are often funded by national organizations such as the National Institutes of Health (NIH), National Institute on Aging (NIA), National Institute on Mental Health (NIMH), and U.S. Administration on Aging (AOA), among others.
Pursuing conferences, ‘eldertainment’
The Louisville Convention and Visitor’s Bureau also has begun to work with all the players in the lifelong wellness and aging care arena to seek national and international conferences that may be willing to be held in Louisville. These conferences, would include venues like the Leading Age Conference in Washington, D.C., held in October, (www.leadingageconference.org), which showcased a House of the Future and other “eldertainment.”
Other targeted associations that host major conferences include American Senior Housing Association; Assisted Living Federation of America; American Medical Directors Association; and the Pioneer Network. Louisville has entered the bidding to host the Private Duty Home Care Leadership Summit in 2013 as well as the National Association for Home Care’s Finance Management meeting. Lincoln Healthcare events, which host 100 significant healthcare-related conferences, have been identified as a possible partner in conference development for the City of Louisville as well.
GLI’s economic development arm has begun to press into earned media and other specific economic development placements for 2012 regarding lifelong wellness and aging care through Development Counselors International in New York, which specializes in economic development marketing. Mayor Fischer has pledged support and emphasized the city’s world leader status in his speeches since taking office, adding relevancy and credibility in other outside markets.
“Having the mayor’s support helps us to message that in Louisville and externally,” Pickett said. “He comes at it as a businessman and speaks in media like CNBC about what we are doing to build upon our world leader status. It makes it real.”
To help execute the unfolding plans, there is another new hire into the economic development team at GLI, supported with funding in part from the Health Enterprise Network of GLI. Kelly Armstrong in now economic development director, lifelong wellness and aging care.
Armstrong moved to Louisville very recently from Cedar Falls, Iowa. She has served in the past as executive director of Community Mainstreet, which has National Historic Trust affiliation, and received her bachelor’s degree in public administration in 2006 from the University of Northern Iowa.
“It is a great time to be a part of Louisville. There’s so much up and coming in this market. I love the arts, and we have such a great base for this,” she said. “It was one of the top nine metropolitan areas I investigated because of this. I see how you can engage in our community quickly.
Some of the areas of focus she sees for Louisville include companies like Dharma Construction, which recently relocated from Costa Mesa, Calif. The firm builds nursing homes and healthcare institutions. Armstrong said she plans on networking with Louisville businessman Larry Benz, who has several interests in rehab and physical therapy markets and brings to the table a perspective on continuing education for speech, occupational and physical therapists, placing Louisville as a hub.
A $44 billion aging care cluster
Wellness and aging care companies in Louisville have total annual revenues of
$44 billion and as of October employ 13,930. These companies headquartered in Louisville constitute the largest concentration of aging-care businesses in the world.
• Almost Family Inc.
• Atria Senior Living Group Inc.
• Elmcroft Senior Living
• Humana
• Kindred Healthcare Inc.
• Pharmerica Corp.
• Res-Care Inc.
• SHPS
• Signature Healthcare
• Trilogy Health Services LLC