The U.S. long-term care industry as we know it is on its last legs, and innovative new communities are about to redefine extended-stay, residential senior living. So say two high-profile leaders in the sector, who recently teamed up and have ambitious plans.
Zeke Turner is the founder and CEO of Mainstreet, a Carmel, Indiana-based development and investment company that some say essentially invented post-acute, transitional care as a standalone offering. Bill Thomas, M.D., is the man behind the Eden Alternative and The Green House Project, in which small groups of residents live in more homelike settings with greater autonomy than in traditional nursing homes.
Now, Mainstreet is getting into the operations side of the business with Mainstreet Health, and Thomas is coming on board as director of innovative healthcare. Turner and Thomas recently spoke with Senior Housing News about how this meeting of the minds came about, why the long-term care system is broken, and their approach to creating an innovative new offering.
SHN: What’s the backstory behind Dr. Thomas joining the Mainstreet team?
Turner: In about 2007, when we launched the [Mainstreet] development company, my intention was to reinvent the nursing home. We took those old 1960s designs and said, let’s throw them in the trash. In the process of doing that, we uncovered an entirely new demand, for a new product in what is now called the transitional care space. That is, people who needed to go somewhere for fewer than 20 days, get well, and go back to the rest of their lives. It’s totally different from the long-term care population. We honed in on that population.
But stuck in the back of my mind was, there’s a population out there that needs longer-term medical care. I wanted to come up with a solution that could change their life as well. Change the residential component of care. As we began seriously looking at this, people over and over said, have you met Dr. Bill Thomas? A few months ago, we had a chance to go down and see Dr. Thomas on his Age of Disruption [book] tour.
We were hooked. We were aligned in our thinking, about moving [long-term care] from the intolerable to desirable. So we said, let’s come together and bring our best ideas together.
Thomas: I would add a couple of things. For a long time, I was committed to working on the inside of long-term care. I’ve done everything I knew how to do to persuade incumbent providers to adopt new models, adopt new practices, and though I’m pretty proud of the success I’ve had, there’s a long way to go.
A couple of years ago, I started thinking about a new phase of my career, where instead of working with existing providers, I would tie up with somebody who wanted to create the future from scratch. I did not know that would be Mainstreet. But it turns out Zeke and I share a commitment to a three-letter word: New. That’s what’s called for, that’s what we need. New. When I had a chance to add my voice to the Mainstreet chorus, I jumped.
SHN: So you’ll be creating something new with Mainstreet Health, not bringing the Green House model with you?
Thomas: I’m incredibly proud of Green House, of the hard work and courageous adopters and success it’s had. It’s a lifetime thrill and achievement for me. I’m also interested in going further.
If you can, think of me as a car designer, and I’ve got the next model under a sheet, a Tesla or something.
SHN: Can you give us a peek under that sheet?
Thomas: Here’s something I can share: The thing I’m working on for Mainstreet as a revolutionary new is product is under the code name TNG. The Next Generation.
Next year, we’ll be pulling that drape off an entirely new model that will build on all kinds of innovations. In science, technology, neurology, kinesiology.
As [Mainstreet] did building rapid recovery centers, or [myself] with Green Houses, we want to bring new models into the marketplace and experience competition and have the market do what it does best, which is improve the quality of our lives.
SHN: Sounds like an ambitious timeline to create a revolutionary product.
Turner: This is not a five-year R&D process. We expect within a year, properties are moving and coming out of the ground, and we are taking it to market. We want people to tell us what they love, what they hate, we want to be in the constant learning environment, to keep getting better and better. So we’ll get those properties out there, do it again and again, keep learning and improving.
One important point of all this is we realized Dr. Thomas’ expertise and the work he’s done is related to medicine in general, as it relates to the consumer experience. Our expertise is on the design, development, scale, the programmatic piece. It’s like gears interlocking well.
We have built the kitchen and have let other chefs come in, and they’re doing great things. But there are some things we think we can innovate in, so now we can start with a blank sheet of paper and say, what should this be? It’s perfect timing for Dr. Thomas to come in, before we build something that’s scaled. A big ship doesn’t turn easily.
SHN: Zeke Turner and Bill Thomas sounds like a mismatch in some ways, to me. When I think Mainstreet, I think billion-dollar deals and high-end, hotel-like transitional care. When I think Bill Thomas, I think not-for-profit. I think small, homelike buildings.
Turner: That’s a bit of a misconception [about Mainstreet], popularized by long-term care guys protecting their own turf. Our properties are beautiful and look high-end. But Medicare and insurance is the primary payor, and urban, densely populated areas are some of our best-performing properties.
SHN: And, Dr. Thomas, nonprofits like Mississippi Methodist Senior Services helped pioneer the Green Houses. But I’m guessing you’ll say, that doesn’t mean you’re all mission and no margin. You already mentioned being market-driven.
Thomas: In my early years, I did a lot of obstetrics. Given my age, I was practicing on the cusp of an enormous change in maternity care. It was standard practice to secure a woman’s legs with leather straps during delivery. The facilities were very unappealing. The babies were separated from their mothers. On and on. And as I went into practice, all of this started changing for one reason. Competition.
The reason hospitals have upgraded in really beautiful, remarkable ways is because those that didn’t lost market share, lost customers. New designs, new facilities were needed.
In the last fifty years of long-term care, we’ve seen a vicious lack of competition. Antiquated buildings, an antiquated approach and message. And that’s led to a public that holds a dim view of what is essentially a very beautiful practice, taking care of the intimate needs of frail people. The problem, ironically, is that the industry, which suffers from underinvestment, seeks to maintain the lack of competition.
SHN: Certificate of needs (CONs) laws are one way to constrain competition, and you’ll be facing other regulatory barriers and obstacles in building these new types of long-term care facilities. How do you plan to overcome these hurdles?
Turner: There’s a near-term plan and a long-term plan. Long-term is easier. The CONs, the moratoriums are going away. Federally, with policies like site-neutral or Money Follows the Person, things will change. We long for that day. It’s going to be a great day as a company.
Short-term, we’re dealing with these existing laws, so we’re working state by state and having conversations about the consumer, the need for innovation, and we’re seeing success. States are filing repeals or revision of CONs. They are not all passing, but the dominoes are starting to fall. Time is on our side. There will be a time when legacy providers will protect their interests, but consumers are waking up and demanding something new. We think there’s a little push that’ll put that over the edge.
SHN: So you’re confident that the timing is right to launch this new Mainstreet Health offering?
Thomas: I think we’re seeing the beginning of the end for the long-term care industry. Time will tell.
It emerged in the middle of the last century as an attempt to solve multiple different problems with the wrong tool. It was using a screwdriver as hammer, and people have actually done a pretty good job with that. But what’s happening is, the transitional care model or meeting the needs of people in the peri-acute period is a distinct discipline. It takes different spaces, expertise, tools. Look at the needs of people living with long-term frailty or dementia, that is a different business. It requires different architecture, different roles and responsibilities. Those two things don’t go together.
Classic skilled nursing has been pickles and ice cream. They’ve been in the same dish, but they don’t go together! We want to make the world’s best ice cream and the world’s best pickles. What drives us is you can be good at this and good at that.
SHN: What are your first priorities coming on board with Mainstreet, to make all this happen?
Thomas: My number one priority is to make sure that everything Mainstreet does is evidence-based. Great design proceeds from a detailed understanding of the best research, and everything in the design process must connect back to the best evidence available, the best nursing research, all of it.
Number two, I’m going to push really hard and far. I’m going to push as far as I possibly can, and I know I’m working with a team that can take a crazy vision of the future and make it come to life. So, in some ways, this is a story of Dr. Bill Thomas ‘unbound.’ The reason Mainstreet is comfortable with that: It’s all about the evidence. I want to take the history and the record that I have and take it further.
Written by Tim Mullaney
Bill Thomas photo credit: Jon Reis / www.jonreis.com. All Rights Reserved.
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