Jennifer Pfeffer

Executive director of 225-employee Pathstone Living in Mankato and regional director of $120 million nonprofit Ecumen adapts to change to produce business results.

Photo by Jeff Silker

Our present-day world seems to have more change than a Vegas casino. President Obama and Rep. Pelosi press for paradigm-shifting change, Eyjafjallakökull coughs up clouds of it, Detroit’s mayor agonizes over change, nuclear Ahmadinejad desires more, Osama bin Laden fights for it, globalization causes it, Wall Street experiences chaos in it, and Apple enables it.

Nowadays, change often occurs as bedlam at Blackberry speed.

And in this ever-changing world in which we live in, 47-year-old Jennifer Pfeffer (pronounced “Feffer”) seems to have an innate ability to flex with change and awe with results. She serves as executive director of 225-employee, nonprofit senior care provider Pathstone Living in Mankato and oversees almost 600 employees as regional director of $120 million parent company Ecumen. Gov. Tim Pawlenty twice appointed her to the Minnesota Board of Examiners for Nursing Home Administrators and she serves as Greater Mankato Growth secretary and treasurer.

By 2003, Pathstone Living was on a dead-end path possibly heading toward closure. The world had changed and was waving this business goodbye. Credit prophetic Pfeffer in part for taking Pathstone Living (formerly Mankato Lutheran Home) out of the business doldrums and into accepting and embracing change. Today, only seven years later, the business has grown outside its traditional nursing home roots to include transitional care, memory care, assisted living, catering, transportation, home care, an online durable medical equipment store, and a cafe.

In the business world, change can create opportunity. Just ask Pfeffer.

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Your background?
My parents worked in Mankato at ISJ Hospital, where Dad was an x-ray technician and Mom a secretary. I grew up in a big, Catholic family and had five sisters and a brother. Now they are all over the country and I’m the only one to have stayed.
I always knew I would work in healthcare. At first, I wanted to be a nurse and would regularly read the “doctor” column in the local newspaper. It was a track I thought I would always be on. My father discussed his work at home. For example, everybody loved listening to him talk in general about his patients. About every other day we would hear a new story. He was always on call and often had to go in on Christmas, nights, and holidays. One thing Dad used to do was point to my body one bone at a time and name every bone in it for me. (Laughing.)

But what about your connection to working with elderly people?
At one point, I was pregnant with our first son while attending nursing school and had to take a leave of absence. It occurred during the toughest part of the program. During that time, I was thinking about continuing on to graduate with a public health degree.
Then one day, when I was age 23 in 1985, a woman showed up in class to talk about a new program starting at MSU for students wanting to earn a nursing home administrator’s license. God spoke to me right then. (Editor’s note: Pfeffer began crying.) He said this is what I needed to do. I went home to my husband and told him I was going to be a nursing home administrator. I knew what I was supposed to do with my life. So I stopped pursuing a nursing degree to be a nursing home administrator. I was the fourth person to finish MSU’s program. (Again, Pfeffer crying.) The whole time I’ve felt called to this career.

Over the years, I’ve heard others describe an experience like that. Bill Carlson, for example, who started Carlson Craft, said he actually heard God’s audible voice at one decision point in his life. Others have said their calling was more a very strong sense that left no doubt.
With me it was the second. This is what I have been called by God to do. It was not a career I had thought about. I knew I wanted to work with the elderly, but that was it. In my clinicals, I felt drawn to working with them, but not until that woman came talking about the new program did I know exactly what I wanted to do. Everything since has fallen in place.

You went back home to talk to your husband about it. You told him God wanted you to do this new career. What did he say?
He has always been supportive. At first, he was surprised because I had been on the nursing track so long and it was going well. But I kept getting messages that nursing wasn’t right for me and then this one day in my life occurred and I realized being a nursing home administrator was meant to be.

What exactly was there about that moment a minute ago during our interview that made you cry?
It brought tears—looking back, and what I have experienced the last 25 years. At the time, I didn’t think I had been searching, but when the person spoke about the program, it was just crystal clear. Everything I seemed to enjoy came together at that moment. I have never regretted that day. Working in this industry has been hard at times, but any job has challenges.

Your first job after licensure?
To be licensed, I had to finish a 400-hour practicum. Mine was with Pete Madel Jr. at Lake Shore Inn in Waseca. He was a great mentor. When I was finishing up, he heard about an opening at Janesville Nursing Home and said I should apply. Here I was only 24 and didn’t have a clue what I was doing. I ended up getting the job. My husband was in shock. It was a great experience and I was there about two years.

Pete Madel Jr. was a mentor. What did you draw from him?
He had a number of sayings; some I still use. For example, he would say, “There will always be fires, so expect them.” Another was, “Everybody rises to their level of incompetence, so find out your strengths and that’s where you should be.” He believed in me. He seemed to see something I wasn’t seeing in myself. I got my foot in the door through Pete and Janesville Nursing Home. I had never worked with a board or a city-owned nursing home, but jumped right in.

What was most difficult starting off?
Truly, I had to learn everything from scratch. I immediately brought people in to help answer my questions. I called in the accountant, the insurance agent—everyone. That’s how I started. The most difficult part may have been learning the financials and budgets. It was baptism by fire. Janesville had 45 beds and in 1987 those beds were mostly full. So I had about 45 clients and their families and learned a lot.
Then I went to work for Life Care Services as an administrator in Bloomington. They have campuses all over the country. I commuted there until 1990. Then I learned of an opening a lot closer to home, in Le Sueur. I spent nine years working at Minnesota Valley Health Center. I started as nursing home administrator and three years later the hospital CEO resigned and the board asked me to take on a dual role. I became the hospital administrator, too. I learned a great deal there about dealing with physicians, about how hospitals worked, and about reimbursement.

Tell a story about dealing with physicians.
(Laughter.) We had only a few physicians. I had to come up with a way to have the emergency room covered and provide quality care when the physicians only wanted to work one night a week and one weekend a month. I really had to use my negotiating skills to come up with a compromise. When I started, that organization was in crisis. There were lawsuits. The administrator had left in turmoil. The only way for the organization to go was up. I had to make some straightforward decisions in order for the business to survive. My goal was to leave the organization in much better shape than when I had started. During my tenure, I tried building community support for the organization and create trust in the community. Some of that trust had been broken.

And in 1999, you came to Mankato Lutheran Home.
The move size-wise was about the same, but I was much closer to home and as a working parent that was important to me.

Give the scope and size of Ecumen in general, Pathstone in particular, and finally, your responsibilities. First, Ecumen.
Ecumen is Minnesota’s largest, nonprofit senior care provider and the nation’s fifth largest. It’s been around since the 1860s, when we started as an orphanage. It has about 4,000 employees and 10,000 clients in Minnesota. Revenues are about $120 million and maybe 12 percent of it is in Mankato.
At Pathstone Living, we have a nursing home, assisted living, a transitional care unit, adult day program, a memory care unit, a home health agency, and we have taken on catering, transportation, and even the reselling of cable television. (Laughter.) We have a cafe open to the public. The newest addition is durable medical equipment, which we sell online.
When I joined in 1999, we were a sleepy, non-progressive organization. I remember asking the CEO then about our having a marketing director. He said, “Why would we need that?”
Now I’m a regional director with Ecumen. Besides being executive director at Pathstone, I oversee operations in Mankato, Austin, Clarkfield, and Balaton. All these combined have about 600 employees, with 225 in Mankato. The Board of Social Ministries of the Evangelical Lutheran Church in America changed our overall name to Ecumen in 2004 and the local name from Mankato Lutheran Home to Pathstone in 2007. Like Ecumen, Pathstone has jumped on the bandwagon and been innovative, taken risks, and expanded our portfolio. Ecumen has always owned us.

But that doesn’t seem to be the general understanding among many people. Some believe Ecumen is this large company that bought out Mankato Lutheran Home.
No. Mankato Lutheran Home and the Board of Social Ministries have always been aligned. It’s just we had a name change. I can see how some people could have that impression. We’ve been the same organization since the 1860s. We have not changed ownership. We’re an associate member of the Evangelical Lutheran Church in America. We have a very strong spiritual foundation at all locations.

Correct me if I’m wrong, but Minnesota has a law requiring Pathstone to cut the rates it charges nursing home clients when the state cuts its reimbursement rates to you.
Not many people realize the State sets our nursing home rates, not only for our people on medical assistance, which is about 30 percent of our clients, but also for those people paying privately. They pay the same amount.
So when the State of Minnesota increases our rates, we get an increase from them and an increase in what we can charge private-paying clients. What is strange is that right now at the legislature they are looking at decreasing the rate paid to nursing homes in order to fix their budget. We have never had a decrease. We’ve had three or four years without an increase, but never a decrease. If a decrease goes through, our medical assistance rate will go down and so will our private pay rate. This would be unprecedented. (The Legislature and Governor ended up not changing the rates this session.)

I’m having a hard time understanding this and so will many businesspeople. Your situation would be akin to the State of Minnesota permanently fixing all grocery store prices—for all customers—simply because some customers use food stamps. What kind of problems has this government intrusion caused?
It has created a lot of financial hardship for many organizations. What we have tried doing here at Pathstone and Ecumen is take our portfolio and expand. If we want to uphold our mission of service in nursing home and other care, we need to find another way to support that mission. Because of the set rates, we lose perhaps $25 a day per client. Multiply that $25 by 365 days a year and that’s money we can’t use to care for clients. However, we’ve been able to support some of our core values by diversifying our portfolio into more “profitable” areas.

For their Thanksgiving ads, grocery stores often run a loss leader, such as Gold Medal Flour at 49 cents to get customers in the door who would then also usually purchase profitable items, such as cake frosting and butter. Do you look at your nursing home business as a loss leader?
That’s not how I look at it. I can’t say it’s a loss leader. But it’s unfortunate the State doesn’t recognize the value of service we provide and pay us accordingly or free up some of the regulations on reimbursements so we can run our own business. There are legislators trying to get rid of equalization—the law we talked about. We want to be allowed to run our own business and provide great service and have the legislature trust us in doing it.

You’re losing money every day on many of your nursing home clients. You’ve recently taken over the former ISJ Home Health Care. Was this move part of your strategy to diversify?
Yes. Pathstone began going through a transition in 2004. Given the state of reimbursement, we were on a trajectory to close. We had to diversify. We started tracking our calls and found we were serving only one or two new people a month and getting 40 calls for care. The first thing we did was add a transitional care unit. Since then, we have added assisted living, memory care, and catering and transportation. Our newest addition is the accredited Pathstone Store, which sells durable medical equipment.
Regarding ISJ, we were very excited when they approached us. They saw us as a credible, high-quality provider. We did our due diligence and proformas and we felt that business would fit our mission. We have gone through that transition and brought many new clients and employees on.

So what I hear you saying is that in some ways the State formula for reimbursing is not good, yet what they have done has forced you to diversify, which has been good.
Yes, that’s the perfect way to say it. We have decided not to allow the State of Minnesota to decide our future. We have taken our destiny into our own hands. Even though we still have to live within their constraints and regulations—that is not what defines us. We’re going to create homes for our clients wherever they choose to live. That is our mission.

If you could begin a new program for clients and have it fully paid for, what would it be?
A wellness program. The State doesn’t reimburse for wellness. We have been taking that upon ourselves. But if we could find a way to help seniors, and all of us, for that matter, become better at taking personal responsibility for ourselves as we age and find a way to give incentives for doing it—that would be a good program. The new health reform coming out has some pieces that really excite us.

Such as?
The Community Living Assistance Services and Supports Act (Class Act). Starting in about 2013, people can voluntarily put dollars in for five years into an account. If ever becoming disabled and needing long-term care services, they will get a benefit. It’s like an insurance product. It’s not a huge payout, but may help bridge the gap for someone who needs care in their home or short-term care.

In an article published in a newspaper last March, you concluded your position on healthcare reform by saying, “Prudent investments to prevent higher costs in the long-run would seem to be a wise choice by the governor and legislature.” Could you give an example—you’ve already talked about some—of ways to prevent higher costs in the long run?
Right now, we receive care in silos. Instead, we should have reimbursement follow the client. The client should have more choices. For example, a person could have so many dollars at their disposal. The person could choose to stay at home and have a neighbor care for her, for example. Or the money could be used to make accommodations in the home, so the person could live there longer.
Being socially connected is also important for older adults, to keep them engaged in the community and with a purpose in life. No matter if you are 9 or 90, you need a reason to get up in the morning. To provide more opportunities for everyone in our community, to have better mental health and social opportunities—it’s all part of the whole wellness piece.

If you had a magic wand and could have the final word in the health reform debate, what would be your solution to everything. What is your ideal?
I would love for people to see our type of organization in a different light. It’s not a place of death and prune juice. Really we are a place of living. There is community here. We have really tried changing that myth. We encourage people to come here to visit. It’s not a scary place. Aging is a good thing, positive. As a society, we think of it as a negative. But I see the beauty.
We have to find a way to recognize our caregivers. When someone working in a nursing home says they are a nursing home assistant, we don’t give them recognition. So how do you shift society to realize caregiving is important? Maybe the coming “Silver Tsunami” will be a force so big people will have to recognize it. There will be less people available to care for this large group. In this dynamic, maybe we will see more recognition.

If you could change one thing about yourself, what would it be?
That’s a hard question—perhaps you should ask my directors what they think. (Laughter.)

No one possesses every quality necessary for their job. Everyone has weaknesses and strengths.
I’m a visionary and good at communication. But I need doers. When looking at my leadership team, I have to have doers in the group. I think ahead weeks, months, years—I’m always looking ahead. The day-to-day stuff isn’t my strength. By recognizing it, I know who to bring in to make things happen.

Governor Pawlenty has appointed you twice to the Minnesota Board of Examiners for Nursing Home Administrators. How important is licensing in your profession? Hospital administrators don’t need a license.
Almost all states have a licensure program for nursing home administrators. Having licensure allows us to set a standard and a level of expectations for quality. You need to have quality leadership. It’s important to have a baseline of education and experience to bring quality into the profession. But it’s mainly to protect the consumer.

Dozens of nursing homes have gone out of business the last ten years.
Forty to fifty in Minnesota.

From a purely business point of view, it seems like a consolidation of the industry. Those nursing homes that did not diversify went out of business. It would also seem those providers who remain, given the aging demographics, would be in a very good position going forward. Is that how you look at the industry?
From a business standpoint, you are correct. People who didn’t diversify have been the ones struggling. Some have closed or are in the process. What also happened is that the consumer spoke. They said they didn’t like the product we were selling and so came the whole explosion of the senior housing option. We want this to be consumer-driven industry. We want to be responsive to the consumer. The consumer of 20 years ago is different from the consumer of today, and people today want something different than what you and I are going to want 20 years from now.

Like another business featured in this issue—Windings of New Ulm—your organization brought in Strengths Finder to help staff members discern gifts and talents. Why do it? And did it help any?
We brought them in two years ago. I took the leadership team through and any leader that comes in needs to go through it. We need to be placing our leaders in positions in which they will be successful. If we don’t know their strengths, how can we guide them?
The other thing helping our team—we recognized who each other was so we could work with them better. For example, there are times when you clash with another person and you don’t understand why. By recognizing other’s personalities, you can find compromising ground. Or you can create teams around those strengths. To get a particular project done, for example, and if you know a person is particularly good at analyzing data, then you can bring them in.

What were your five strengths?
My top strength is being futuristic. Next comes responsibility, arranging, relater, and then strategic.

In terms of futuristic—you being a visionary—you are the secretary/treasurer for Greater Mankato Growth. If you could choose the vision for that organization over the next five or ten years, what would you choose?
Oh goodness.

I guess that would be difficult to imagine you having that power given the organization has so many board members.
(Laughter.) There are 24. We are known as being inclusive. Jonathan Zierdt should take the credit here. The first is our regional perspective, in terms of bringing in communities and counties to build region synergies, so when we attract a business or a business comes looking for a location, we will have more opportunities for them.
I love what we’re doing in terms of building the workforce. With a down economy, our turnover rate at Pathstone has been minimal. Hardly anyone has been leaving. However, that may not always be the case. One day in the future, our ability to attract a workforce could become difficult. We need to continue building the size and quality of our workforce for this region. Eventually, the economy will switch back again and we will be back to where we were five years ago when we could not find potential employees. Continuing to promote the region will also be critical going forward.

Over the last ten years, what has been your toughest decision to make?
The toughest decisions were in 2003-4 when we were looking at a tough financial future and how we would transition to being successful. Having to make those tough decisions was a huge culture shift for our organization. Today, we can make them on a dime because we’re used to it.

You are a future-oriented person and for years your industry never changed. Did that drive you crazy at times? Could you see opportunities when no one else could?
I seem to be good at bringing people along. I never felt like I was being held back. However, I don’t always see a lot of barriers, but rather tend to see opportunities. There were times I felt like change wasn’t happening fast enough.

Can you give an example of how you bring change about in your organization?
I use a lot of discussion and storytelling. You have to paint the picture of what the future will be and create steps to get there. I know my mind often works fast and so I have to slow down sometimes for other people and break down change into steps. I have to keep people engaged in short-term goals. In my thinking, often with people I’m already down the block and around the corner. I have to remember they often aren’t. I have to be very purposeful how we are taking the next step.

Many people resist change.
Yes. Sometimes you have to ask people to get off the bus.

Have you had to do that?
Oh yes. It’s happened to most leaders. You have to say it’s time to move on, and that you and the organization are no longer a good fit.

Anything in conclusion?
Three words describe Pathstone and Ecumen. First, we are innovative. Second, we empower our client—we don’t tell them what they need. Lastly, we try honoring our clients, families, and co-workers.

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Heavily Regulated

CONNECT: Pathstone deals with hundreds of vulnerable adults on a daily basis. Many hundreds of people trust you with their moms and dads. What steps do you have in place to insure those vulnerable adults are well taken care of?
PFEFFER: I’m going to back up a bit on that question. First of all, I think nursing homes historically have taken some bad raps. Part of my goal in life is to try to dispel some of those myths.
We spend a great deal of energy and time looking at data to make sure we continue to find ways to improve services. We have frequent conversations with clients and families. We have quality people and they have a high level of engagement with clients. We have found in our data that a higher level of staff engagement correlates with our quality of care. Every other year, we do satisfaction surveys with clients and employees.
Also, state and federal governments probably regulate us more than any other industry except nuclear power. Every year, the health department is here several days looking at our practices and visiting with clients and families. It’s a pretty intensive process.

Getting to know you: Jennifer Pfeffer

Born: October 23, 1962.
Spouse: David Pfeffer.
Children: Ryan 24, and Alec, 22.
Education: Mankato East 1981; Minnesota State BS ‘86 in public health; Minnesota State MS ‘92 in gerontology.
Professional Involvement: Aging Services in Minnesota; Mankato Rotary (past president); Greater Mankato Growth (board member and secretary/treasurer); YMCA (board member); Board of Examiners for Nursing Home Administrators (board member).