Startup Diaries: Government Intervention

[Startup Diaries is a new original series of articles from Yahoo! Small Business Advisor that chronicles the day-to-day and week-to-week struggles of a variety of startup and new small businesses.]

Business-owner-to-be P. Query is in the process of starting Angels' Rest, a small private-care residence for the elderly who seek an alternative to a nursing home.

We are quickly learning the politics of government regulation in order to obtain our business license. We are a small business with the goal of providing quality care with a 2:1 patient/caregiver ratio, for less than the average nursing home in our area. Standard nursing homes have failed our society due to understaffing and patient negligence. Unfortunately, the government feels the need to place similar requirements on our three-bed, private home as a large, institutional nursing home.

Now that we've been cleared through zoning and passed the health inspection, all that remains are the fire inspection and the AHCA (Florida Agency for Health Care Administration) inspection. Upon further reading into AHCA's requirements, we were stunned by a stipulation for license approval. We must reserve one bed for someone on Medicaid.

Our compensation for providing the same service to this patient as the other two is roughly only 20 percent of our monthly charge. This amount doesn't even cover the caregiver cost, let alone food, transportation, or supplies. In order to obtain a license we must agree to take a huge monetary loss on one out of three patients. This is unbelievable. We are a small, private care home, not a large, inefficient nursing home whose patient/caregiver ratio averages 12:1.

Needless to say, this regulation will consume the majority of our profit. Perhaps AHCA should reevaluate and establish a minimum number of patients of about 10 before this regulation kicks in. This would allow for only 10 percent of space to be reserved, instead of the 33 percent in our case.

We plan to research this matter further and seek a solution. We are nothing like standard nursing homes and we refuse to stand by and be treated as such. Hopefully we can see our dream come to life without our government implementing a regulation that will hinder our intentions.

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