This is an entertaining interview with Phyllis Shelton, President of LTC Consultants, as she explains to Mike Siegel how she built her business around her passion for the issue of long term care.

Her personal experiences in the health care industry prompted her to want to educate people about long term care and what they can expect under various scenarios. She terms it her "life's work" and explains why this issue is both person to her and how it drives her to teach.

About Phyllis Shelton:

Phyllis Shelton is the President of LTC Consultants, a Nashville-based company that she founded in 1991 specializing in long-term care insurance sales training, consumer education and marketing materials. She is widely considered to be the leading long-term care insurance sales trainer in the country. Phyllis’ organization has trained nearly 65,000 agents via live or web-based training and her company has conducted training programs for 10 of the top 15 LTCI insurance carriers. She recently expanded her business model to include assisting states with an educational outreach about the Long-Term Care Partnership, a new program that shelters assets from Medicaid spend down equal to the benefits paid by Partnership long-term care insurance policies.

Her newest online training venture, LTCiTraining.com, was developed to meet the new, mandated NAIC/DRA Partnership producer training requirements in all states.

Phyllis was profiled in Senior Market Advisor’s charter group of the top ten professionals in the long-term care insurance industry nationally and has spoken to literally every major industry group including MDRT’s Top of the Table and NAIFA 2010. She received the distinguished LIFE Foundation Client Service Award and her full page client story was featured in the September 14, 2009 edition of Newsweek magazine. She appeared in The Balancing Act, Lifetime Network’s early morning show for women, on July 14, 2010 to emphasize the impact of long-term care on women.

She has been featured extensively in the Wall St. Journal and appeared in a two-hour PBS documentary on caregiving. She has presented on Wall St. as well as CNNfn and National Public Radio. She is a consumer reference for such publications as Kiplinger’s Personal Finance Magazine and her interviews include USA Today, Business Week, Consumer Reports, Money, Smart Money, Bloomberg Wealth Manager and National Public Radio. Her consumer book, LONG-TERM CARE: Your Financial Planning Guide has become an industry textbook. Her newest book, Phyllis Shelton's LTCI Worksite TOOLBOX (LTCi Publishing, 2010), cracks the code on how to engage younger employees in the long-term care planning process.

While sharing the main platform at the annual NAILBA conference with former U.S. Senator Bob Dole, she was introduced as “the most prolific speaker/trainer in the long-term care insurance marketplace.”

Ms. Shelton sees Medicaid as the largest threat to the American economy. She speaks nationally on the role of long-term care insurance as part of the private sector’s solution by making Medicaid payer of last resort for long-term care, which will save jobs by rescuing state budgets and keep families together by providing caregivers when most needed.

Phyllis’ passion for the long-term care industry is unparalleled. Her motivational message has been delivered to over 8,000,000 Americans.

Transcript:

Siegel: Well folks, welcome back in. Good to have you with us here at the BOSS Business Brief. My name is Mike Siegel. As we get into the conversation, as we do along with a variety of other conversations, talking with small business people about their motivation to get into what they do and the trials and tribulations that they have dealt with in terms of government regulation and many of those things, and kind of getting a profile on people with small business who are doing remarkable things. One of those is Phyllis Shelton and she has become involved in a very committed way in the field of long term care. So, I thought it would be fascinating to find out about her motivation, her background, and how she started this small business that has become a very important element of this whole field of long term care, which we will talk about as we go along. Phyllis, thanks for being with us. How are you today?
Phyllis: I am great. How are you, Mike?
Siegel: I am doing very well. What I would like to do is go back with you to what in your own life caused you to want to be committed to dealing with this long term care issue, and of course today it is coming to a head with Medicaid and all of those problems. But more importantly, sometimes people get into small businesses that become passions rather than just clinical business functions. What about in your case? How did that come about?
Phyllis: I think you could say that is about 200% true. I smile when you ask me that question, because I got a call from a US Today reporter a few years ago and they said, "what was it like starting a business in the middle of a recession?" I said, "What do you mean?" He said, "Well, you started your business in 1991, didn't you?" I said, "yeah." He said, "well, what was it like?" I said, "I don't know. I didn't know it was a recession."
Siegel: There you go. That is a good tip, by the way. Maybe even today with all the troubles people might use the tact of thinking, "I love doing this and I am going to start a business." Was it out of a labor of love that you started in 1991?
Phyllis: It was out of a compelling need. Boy, I had been in health insurance like 11 years and I was a home office marketing manager for Blue Cross and Blue Shield of Tennessee at the time and I was just a middle manager and I had no power and I just didn't feel like I was making a difference. Do you ever get that feeling? You don't because you make a huge difference, but at that time that was my motivation. So, I am looking around, you know, saying a lot of prayers, and I was drawn to long term care insurance. It was 1988 at the time, in its infancy, and I decided to give it a try because I had a personal experience, as most of us do, and it just got inside me. I could see the need for this product.
Siegel: Could you tell us a little bit about that personal experience?
Phyllis: Yes. In fact, in my original book, "Long Term Care of Your Financial Planning Guide," it was so important to me that I started on the very first page. My mother was a nurse and she worked nights to take care of my grandfather, who was my very best friend, and he was blind diabetic, and he lived with us for 10 years. I just loved him more than anything on this earth. So, she worked nights to do that as my dad would be home during the night. Then, the last few years of his life he still had to go to a nursing home because we just couldn't do everything. So, then my mother would work double shifts so that she could pay the bill. She died at 54 years old, which I thought was old at the time, though I don't think that now. I look back on all that and I think, wow, all those years of her giving, you know, it took a toll. It took a toll, period. So, I look at families today and I think, if I can make a difference and give them something meaningful to hold their family together so that they don't have to argue and, you know, somebody doesn't have to quit a job or get sick and pass away early, then I feel like I am making a difference.
Siegel: You know, that is a very interesting point, because I can relate to that in a sense. From the other side of the coin, because my mother went through, after my father passed away, over the years a debilitation medically, as I guess all of us do, and she was living in a condominium. I had purchased a condominium in New Jersey so that she could be on her own. My brother and his wife lived about one mile from her and it was my brother's wife who would actually, in the end because she was not able to get out and do her own things, would have to do the shopping, etc. She even had difficulty getting up into the cabinets to get food out of the cabinets, so they kept the food more accessible. It got to the point where the consuming time for her daughter-in-law became very stressful. It turned out that there was an opportunity for my mother to get into assisted living and it right next door to where she was living, it was kind of a senior citizen condominium development. Right next door was the assisted living. I guess that would be considered the next step and that is why it was right next door. But it was a very highly respected facility and it did very well and it was people of means that were there, but my mother was fortunate, getting to the point we will perhaps talk about, because she was able to get approved for Medicaid to get in there, and lived out her years with great care. Of course, with all of the meals taken care of, and they got out occasionally to have lunch or drive down to the New Jersey shore (this was about one hour from the New Jersey shore) and those sorts of things periodically, but she was comfortable and had a great life, as good as it could be under the circumstances, but I wonder if her daughter-in-law had to keep taking care of her in the condominium how much additional stress that would have been and what debilitation it might have been for her daughter-in-law, my brother's wife. So, I can see the difference where your mother was forced to deal with the situation to her end and my sister-in-law was able to be relieved of that burden because of the assisted living situation.
Phyllis: Yes, and my mother was the youngest of six children, but there was five older brothers, you know, they were all boys, and she was a nurse, so, it naturally fell on her. Well, I would say this Mike, you were lucky because most states do not cover assisted living on Medicaid. My college roommate in Virginia is having to go through this with her parents and she is an only child. They didn't buy long term care insurance. I encouraged them to and they did not. Now, her mother has Alzheimer's and they have $600,000. So, my friend is, you know, talking to an elder law attorney and she will probably pay him $22,000 and then $1500 a month to hide this money, you know, so that her mother can get Medicaid because she feels like she has got to take care of her father. Well, what is that doing to the taxpayer? Her mother is going to be in a Medicaid nursing home…. I mean, it is such a bad end for a couple that was frugal, they planned, they did everything right except this one thing. The stress on my college roommate with her own family, three kids, it is unbelievable, and she is a full time teacher.
Siegel: Now, your mother passed away at a very young age as a result of all of that stress. Did this become a cause for you, so to speak?
Phyllis: It did. It did become a cause. I also was going to mention, look at Diana Reeves. She died two years after Superman of lung cancer. The woman never smoked, so you have to look at that. Yeah, it became a cause and so I think I went about it totally differently. I mean, I was an educator not necessarily a salesperson in the beginning and I just did lots and lots and lots of seminars around my community and educated people. It took me about three weeks to figure out I needed to go to younger people, which I did, and I was selling this to 40 year olds, which is the youngest you could buy it in 1988-1990. Now, it goes down to 18. But I just educated people and when I educated them, Mike, they just said "oh, okay, they need to do this."
Siegel: So, as a result would you s ay you just kind of evolved into this?
Phyllis: Yes. What really happened was within a year and a half, I guess, I was very successful and because I was selling to all this young people, I would start getting calls from agents around the country wanting to know how I was doing it, because they couldn't figure it out. I thought, "Whoa, that is my ticket." If I want to make a big difference, I figured this out so why not empower somebody in Omaha, Nebraska, to do what I am doing in Chattanooga, Tennessee, or in New Jersey, or in Maine. So, I started my company in August of 1991. I worked with the former communications director at Blue Cross and we put together an amazing marketing system; you know, sales presentation, seminar, all of that. It didn't fly off the shelves, though, Mike. You know, I was just blown away because I called the insurance companies and they a re like, oh no, we already do all this, which they didn't, right? So, I thought, well I will take it on the road and I had this vision, I guess you could say, in early 1994 and I took my process, and I had an interactive workbook in the same order as the sales presentation. So, by the time they got down they not only knew the presentation, they knew how to answer all the questions. So, I did 23 cities in 1994 and didn't make any money but didn't lose any money, broke even. From that, I got my first consulting contract and now I have worked with 10 of the top 15 carriers and about 65,000 agents have gone through my training, either live or web based. So, that is what it took and I mean it was a bootstrap because I didn't have any money. I had a 12-year-old car, I am in an apartment. I sold my condo to raise money to do this and, you know, nobody would talk to me about a loan because I had zero collateral. So, it was very interesting times, but I was determined. You know, I just wanted to get this word out.
Siegel: Was it because of your personal experience with watching your mother take care of your father?
Phyllis: My grandpa. Yes, it was. I mean, and again as I had sold it and heard all the horror stories, you know, from the people I was talking to and what a difference it would have made if they had had money to pay caregivers. The more I did, I mean, the more stories you hear, and now I hear more and more stories about people in their 40s. I know two women right now, their husbands were healthy, then one had a stroke, one had a brain tumor at like 45 years old/50. You know, this would destroy their families if they didn't have the insurance. So, the more I do it, the more….I would have in the beginning just talked to consumers, but I didn't have a way to do that. I didn't have that kind of money. So, I thought, okay, if I can teach the insurance professionals how to take this same message to the consumers in their area, that is the way I will have an actual impact, and that is what has happened.
Siegel: So, you just had that idea and then actually went and carried it out and, as you point out, really didn't make any money with it but obviously it then worked well. Did then the insurance companies start to listen? Because you said before that they insurance companies said, "we are already doing that, we don't need it." Did they become convinced by the work you were doing with the agents and helping to train them?
Phyllis: That is exactly what happened. Because the agents…. It was a grassroots thing. They slammed the phones in their home offices and they said, "this is what we need. We don't have this." So, I remember my very first consulting contract, the two top executives came to my San Francisco meeting and it was right at the end of the tour and we sat down at lunch and they said, "Okay. What will it take?" Well, to me, you know, the only number I could think of every time I opened my mouth was $50,000. I priced everything at $50,000. So, they said, "Go around the country, do like maybe 40 meetings for us for $50,000." And then I said, "But wait, you need my tools. You need the presentation, you need the seminar and all of that." They said, "Well, can we just, you know, buy it and manufacture it." So, I am like "okay, what do I charge, what do a charge?" So I realized I need to make more money here, so I go "send me $5000." Well, they had 3000 agents and I thought I can do that for you and it would be the equivalent of three 12 packs of Diet Coke, something like that, ridiculous. So, they laughed and said, yeah. So, that was my first consulting deal.
Siegel: So, the message that you spread then led to actually a growth in your own business as well as in the awareness and consciousness of this product. Now, did the insurance companies begin selling this product as a result of your work or did they already have it and refined it? How did that work?
Phyllis: It was in its infancy. There were just a few companies doing it, Mike. I do believe that, you know, after I worked with so many people over the years, I know they sold a heck of a lot more of it. We haven't sold nearly enough, but there are people that will come up to me and tell me that, you know, my training is the reason for their career, especially women, because women are just so caught up with this cause because they are mostly the caregivers and then they wind up needing care. So, yeah, I know it has stimulated and I feel like the last 22 years of my life have been very well spent. I know for a fact that families have stayed together because they had money to hire caregivers.
Siegel: So, they have vindicated all of the effort you have put into this?
Phyllis: Yes. I feel really good about it. I really do. They only thing I don't feel good about is, you know, I am one person and, yes, my business grew. At one time I had like 13 people because in 2002 we did the federal employee education, which was 2000 meetings around the country in 4 1/2 months, which was a big deal. So, I have had a wonderful staff over the years, but we are little. I look out today and, you know, there is half of our adult population over 50 years old and there are 8 million long term care insurance polices in force, yet we have got 230 million people over 18. So, the market penetration is so tiny and there are so many people that are going to slam that Medicaid program. The ramifications of that as has been reported, Mike, because Medicaid is out of control, states are having to pay that and they are cutting tuition on universities, they are raising property tax, state income tax, cutting back scholarships. So, people are getting this bad result but they don't know why, and I just wish I could do a megaphone (and so I appreciate this opportunity) to say, this is happening to you because Medicaid is out of control. So, we need long term insurance in place all the way down to 18. Employers need to offer it and that would make a big difference. So, my life work isn't finished because I feel like that message is not out there yet.
Siegel: Would long term care policies help solve the problem? In other words, is it too late for people in their 50s and 60s, and should we be focusing on people in their late teens, if they are going to work after high school, and 20s and 30s? Should we focus on that group?
Phyllis: Oh, no, it's not too late. I mean, I am looking at a plan right now that would pay, you know, two-thirds the cost of care which would make a huge difference in most families, for a 50 year old. Take about two-thirds of the cases in the last maybe 3 years or something like that. It is only $1000 a year for a married 50-year-old. So, it is affordable. It is just that if it is offered in the work place, people can get it with limited underwriting, you know, and most people would be able to get it. Sometimes even spouses have limited underwriting. So, it is just something that needs to be out there.
Siegel: What would you said, Phyllis, to people listening about what you learned, maybe as a formula, a rule, or a template, of principles that would apply to any small business in the way that you developed this one? If you could take something from what you did and your experience in developing this small business, is there any rule or principle that you can think of that would apply in most cases to small businesses?
Phyllis: I think the main thing, Mike, and I went to a small business class just the other night and it confirmed what I thought, you know, they were talking about all the failures of small business, but I would say the main thing is don't give up. There are always going to be people that will tell you that you can't do it. Always. But you can't give up. If you have a dream, if you have a vision, just because you can't get it done the one way, alright, you just go somewhere else and you get it done another way. I just believe God will send you the people that will help you, if you just hang onto that dream and don't let anybody talk you out of it. I don't care who that person is, it doesn't matter. You just have to do what the vision is in your heart.
Siegel: And I think the point you are making is that just starting a small business isn't the point. It is doing something that does become a labor of love. Maybe the ideal situation, as you are describing it, although you wouldn't have wanted to go through this situation with your mother, but it was an experience that evolved into your commitment to this lifelong change in American policy regarding long term care. I am getting the notion that what you are saying is that people who start a small business ought to start with something that they really have a passion about whether it is because of that kind of unfortunate experience or some kind of other experience that leads them into doing the work that they do.
Phyllis: Well, that is what will keep you. When you are exhausted because you have worked all night, because you just went somewhere and a negative person told you that you are wasting your time. I mean, in those dark, dark hours, Mike, that gut feeling that you are doing the right thing, that is what will keep you going. It is not the balance sheet. And let me just say this, I mean, my financials look like an EKG, they always have. So, I didn't have any seed capital. I didn't even know what that was. People need this insurance, but they don't even know they need it, but they need it. So, I guess as long as I am breathing, you know, I will be trying. I talk to people on airplanes. I talk to people anywhere I can, taxi drivers, plan for long term care. You know, most things in life you do much better when you plan, and if you don't, you are at the mercy of all the forces around you.
Siegel: Well, that is a great point to make, that that is the motivation for why you do what you do and the way you do it. I think what you just said about telling taxi drivers and telling others is a fabulous point. Phyllis, thank you very much. You have shared a great deal here. I appreciate that. It is about a small business, but it is really about a lot more than that, it is about a mission. For that we thank you and it is always a pleasure to talk to you. I look forward to talking to you again soon.
Phyllis: Always a pleasure, too, Mike. Thank you.
Siegel: That was Phyllis Shelton, who has a great mission and passion in her business. Of course, one thing that is very important is that there are certainly principles in a business that you need to follow, but it is also something that emanates from this great commitment, this passionate commitment, to make change, and in her case obviously she has been very successful doing it. Starting from scratch and then building this business over these years. Mike Siegel for the BOSS Business Brief. I thank you very much. Good to have you with us.