Making a difference

By John Johnston
Managing Editor

Whether he’s the lead cyclist for the Boca Raton Bicycling Club’s Tour of Boca this past February -- or whether he’s cornering the market on snow shoveling in his New York neighborhood as a boy -- you’re not with Peter Baronoff 30 seconds when you know three things.  

• He’s in charge,
• He’s incredibly charming.
• He likes being in charge.

All of which serves him well as president and CEO of three major national companies – while also functioning as a councilman and deputy mayor of the City of Boca Raton. As well, he also currently serves as:

• President of the Acute Long-Term Hospital Association (ALTHA), a membership of more than 270 acute long-term hospitals in more than 29 states.

President of Woodfield Country Club.

• Trustee of the Boca Raton Chamber of Commerce

A member of the Boca Raton Roundtable

• An active supporter of Congregation B’nai Israel, LEAH (a board member and co-chair of its recent Pillars of the Community event), American Heart Association, Woodfield Cancer Unit and Stand Among Friends.

In sum, he’s a leader – while also clearly connected and committed to his family.  Baronoff has been married to his wife, Malinda for 25 years. They have two daughters, Shanna, 20 and Jillian, 18.

And when much of the conversation with Baronoff for this article took place several months ago, his father Charles, now retired in Florida, was in fact working at the Sun Capital Health Care office – illustrating the proverb: “the apple doesn’t fall far from the tree.”

Then there’s the awards – the most recent of which was the 2008 Distinguished Citizen of the Year award given to Baronoff by the Gulf Stream Council, Boy Scouts of America.

Stepping to the podium at the Boca Raton Resort and Club to accept the BSA’s highest citizen award, Baronoff admitted: “I’m speechless.”

As applause from a crowd of more than 200 people in the audience quieted, Baronoff said, “I’m humbled by the Scouts for this honor – and for recognizing my commitment to make a difference.”

That difference helped to raise $42,000 to support Boca Raton area Scout programs that serve more than 2,000 youth.

The world of Peter Baronoff is, of course, filled with “the numbers.”  You’d expect that with someone who is chairman and chief executive officer of three national companies headquartered in Boca Raton:

• Sun Capital HealthCare, Inc., one of the nation’s largest finance organizations for the healthcare industry.

Promise Healthcare, Inc. one of the country’s leading and largest long-term acute care hospital (LTACH) organizations that owns 14 facilities in seven states and is currently developing such a hospital for The Villages in central Florida—the nation’s largest planned community.

• Sun Capital Inc., a leading nationwide commercial financial services company.

he Journey

A finance major in college, and brilliant with those numbers, Baronoff, however, runs against the so-called ‘bean counter’ stereotype with a streak of compassion toward his fellow humans – as learned from Jean Jacque, a long-time employee, who couldn’t wait several months ago to announce (and when out of earshot of the boss) “what a kind man” Baronoff the employer, Baronoff the CEO, Baronoff the man in charge happens to be.
 
Some of that comprehension of the woes of others was likely elevated through Baronoff’s first job: a salesman of batteries whose primary use was in hearing aids.

That was followed by being a salesman for a wine firm, to then being founder of Blair Importers, Ltd., a Long Island, NY importer of kosher wines from Israel.  He grew that firm into a $35 million, and one million case annually niche marketer of imported wines, spirits and beer.

“We sold that company in 1994,” Baronoff said.  That was followed by a move to Florida – where he completed his undergraduate work at the University of South Florida.

The man in charge then took a look around, “looking to acquire a business.”

In the interim, Baronoff said he took on a consulting assignment – part of which was assisting that firm in diversifying, including the acquisition of an accounts receivable funding company.  One of the firm’s shareholders was opposed to that acquisition – resulting in Baronoff buying the firm himself.

That firm evolved into Sun Capital Health Care, Inc – now an accounts receivable funding company for the healthcare industry, he said. 

“Sun Capital Health Care developed a model in which we advance capital on the monies owned to health care providers,” Baronoff explained. This includes hospital physician groups, durable medical equipment providers -- any health care providers that accept third party insurance.

The firm evolved as cash flow in the health care business became more difficult – “because of rise of HMOs,” he said, and the constant cash constraints that health care providers otherwise have.

“We became known nationally,” Baronoff said, “when a major competitor of ours had the inability to provide new capital and our portfolio of hospital clients grew from coast to coast.”

Baronoff said that Sun Capital Healthcare has to date done approximately $4 billion in health care accounts receivable funding transactions – making it the largest such firm in the nation.

But the man in charge was just getting started.

In 2002 Sun Capital Health Care took on as a client a hospital in Shreveport LA that was in bankruptcy.

“We received approval from federal bankruptcy court to provide accounts receivable funding for this hospital,” and in doing so, Baronoff said, he developed “a strong understanding of how they did business.”

A potential buyer then came along for this hospital and prior to Sun Capital being returned its money, the buyer “backed out of the transaction,” Baronoff said, adding:

“We decided to take over the hospital, and make an investment and to rehabilitate the hospital and eventually sell it.”

“We started to understand what a long-term acute care hospital does,” he said.  “This type of hospital has no emergency room -- no wing where babies are born.  It’s a hospital that takes care of geriatric patients with intensive care needs -- referred to us from short-term acute care hospitals.”

In short order, one became many, and “today we have 14 hospitals.”

In an acute care hospital, Baronoff said the average patient stay is for 25 days or longer.  “We get the sickest of the sick,” he said.

“There is a great need for this kind of hospital,” he said, adding that work quickly became “more than a business.”

“What changed me was the children of patients that met me in the hospital …and thanked me for the care and compassion that we showed for a mother who had passed on. They had told me that they only wished her mother could have been in our hospital far sooner.”

Baronoff the businessman nonetheless “realized quickly” there were less than 300 such acute care hospitals in the US, and further that there was a built in difficulty in creating additional facilities “because of limitations on Medicare reimbursements by the Federal government,” and other health care providers lobbying state governments to make it difficult for these types of hospitals to enter the market.

At the same time, Baronoff said “health care is not a business where you hit home runs…you have to be a singles hitter…that’s a promise we make -- utility infielders -- 24 hours a day, 7 days a week.”

Running Promise Healthcare “is a huge responsibility,” he said, pointing out that “some nights it could be greater than 700 patients.”

The key, he said, “Is that you treat every patient as if it’s your only patient.”

“Quality patient care is promise number one,” he said.

What obstacles stand in the way of acute care hospital growth in general, and what about an acute care hospital in Palm Beach County?

Nationally, the politics surrounding reimbursement approaches cause many problems for acute care providers. In Florida, the state’s Certificate of Need (CON) law is a major roadblock, Baronoff said.

Established in 1973, the official line is that the CON program is a regulatory process theoretically designed “to promote cost containment, ensure access to high quality care and avoid unnecessary duplication of health care services by requiring certain health care providers to obtain state approval before offering new or modified services or making major capital expenditures.”

Baronoff describes the CON process as “archaic…. and one that “restricts competition,” but without accomplishing the goal of cost reduction. The certificate of need application review timeline is also “quite lengthy and costly for providers,” he said.

Baronoff said eventually “we hope to win a certificate of need and to position a hospital in northern Broward and as close to Boca as possible.”

The reason Promise Healthcare can’t currently put an acute care hospital in Boca Raton is the existence of two long-term acute care facilities in Northern Palm Beach County.

“It would take years for us to show bed need,” Baronoff said.

When beginning Promise Healthcare about six years ago, Baronoff said he asked his then 13-year old daughter Jillian to come up with another word for commitment.

“Daddy – it’s a promise,” Jillian replied.

“That’s how the company got its name,” Baronoff says, the smile on his face not trying to disguise parental pride.

And at the conclusion of his remarks during the recent Scout luncheon at which he received the Distinguished Citizen award, Baronoff said that when looking back there were three things a responsible man considers about his life.

First, he said, “Did you enjoy your life?”  Second, “Did you do the right thing?’

The third thing, he said, “Is did you make a difference?”

“Other people” have to decide the third thing, he said.

Several months earlier, and when talking about his business, Baronoff said the following: “It’s a passion for me to grow this business with the most highly qualified professionals in the industry – and I’m committed to making a difference.”