INNOVATIVE BUSINESS 

APPROACHES FOR AREA AGENCIES 

ON AGING: OHIO AAA’S LIMITED 

LIABILITY COMPANY, DIRECTION 

HOME 

ACL Learning Collaborative 

October 2, 2013 
Ohio Association of Area Agencies on Aging and 

Direction Home, LLC 

 Larke Recchie 

 CEO: Ohio Association of Area Agencies on Aging and 

Direction Home, LLC 

 Past experience: 

 AAA Director 

 Senior housing developer and management, 

 Home care agency director 
What you will learn 

 Ohio’s Area Agencies on Aging experience 

with developing a Limited Liability Company 

(LLC) to expand business opportunities 

Why Ohio AAAs did a LLC 

Structuring a LLC 

Lessons learned 

Potential business opportunities 
Why Did Ohio’s AAAs create a LLC

 The Aging Network’s Changing Paradigm 

 Managed Long-Term Services and Support (MLTSS) 

have changed the paradigm: the AAA traditional role is 

being altered and usurped 

 Business practices must evolve to stay relevant. 

 New business lines may be necessary. 

 Collaborate and strengthen brand. 

 Harness power and innovate. 
Core Competencies of AAAs 

 Recognition of skill base is critical in any enterprise 

 AAA Advantage: draw on power that does not exist 

in the for profit organization: 

 sense of community, 

 altruism - motivate community volunteerism 

 40 year successful history built enormous goodwill 

 collaborative 

 transparent 
Conflict between MCO and AAAs 

 AAAs inhabit the LTSS space – cost containment with 

successful community based approach that MCOs 

wish to profit from 

 AAAs already know how to do what MCOs are 

promising to deliver in the future 

 AAAs are needed in the short run for their core 

competence but can be an impediment in the long 

term to MCO’s maximizing profit

 Government doesn’t go back when policy is a 

mistake 
Comparison of Nonprofit/Quasigovernment vs For Profit Organizations 

 Mission inspires altruism 

MCO can't provide the same mission driven impression: 

“What Money Can’t Buy” – Harvard Professor, Michael 

Sandel – “How Markets Crowd Out Morals”

 AAAs call on caregivers to contribute much –

consumers/caregivers more skeptical of contributing 

when the funder is making a profit 
Steps to Successful Transformation 

 Harness power and think about innovation. 

 Collaborate and strengthen brand 

 Structure for success in different market arena 

 Focus on Interdisciplinary Collaboration 

 Develop innovative funding streams 

 Price services for success 
Structure of Direction Home, LLC 

 Direction Home, LLC 

Rebranding of AAAs for new markets 

Limited Liability Company owned by 12 

AAAs: “For-Benefit” organization

Operates as one entity selling statewide 

services of AAAs 
 Legal Structure 

Area Agencies on 

Aging 

Ohio Association 

of Area Agencies 

on Aging 

Direction Home, 

LLC 
 Management Structure 

CEO 

Ohio Association 

of Area Agencies 

on Aging 

Direction Home, 

LLC 
LLC Enterprise Management 

CEO

COO/Legal Contracted Financial 

Management 

Contracted 

Development/Management 

Services 
Structure for success in different market 

arena 

Direction Home, LLC operates as a “For Benefit” company 

 Any profit is distributed to AAAs for mission related activities 

(nontaxable) 

 Can provide other important benefits: 

 Borrowing 

 Surety Bonding 

 Letters of Credit 

 Centralized contract compliance and accounting 
For Benefit Company 

 For benefit company can be fashioned out of 

these legal entities to achieve its objectives: 

 LLC, 

 Limited Partnership 

 L3C 
Focus on Interdisciplinary 

Collaboration 

 Hospitals 

 Physician practices 

 Insurance companies 

 Managed Care companies 

 Retirement Systems 

 Housing 

 Other community based organizations 
Lessons Learned 

 Initial investment makes life easier 

 Plan for legal costs, marketing costs, insurance, back 

office 

 Innovation means starting small sometimes 

 MCOs will want your activities to fit into their design 

 Product pricing is essential 

 Willingness to talk through tough issues and to help out 

– weigh when something is AAA opportunity and when 

beneficial to act as statewide contractor 

 Friendly competition is okay but collegiality is most 

important 
Quality of services. Continue to innovate. 

Virtuous cycle 
Thank You 

 Larke Recchie 

 Ohio Association of Area Agencies of Aging 

 recchie@ohioaging.org

 614-481-3511

 http://directionhomeohio.org/ 

 http://www.ohioaging.org/default.aspx