Where Walmart Meets Health Care, Senior Living Must Find Its Place

Senior living leaders recognize the importance of forging strong ties with hospitals and health care systems, but it appears many operators have been complacent and might now lack the tools to seize on partnership opportunities that would give them a competitive edge in a brand new health care landscape.

International design, planning and consulting firm Perkins Eastman recently surveyed about 200 senior living stakeholders, including industry consultants and leaders at major not-for-profits, primarily continuing care retirement communities. Nearly 80% of respondents said that health system reforms will cause senior living and health care to converge, and 50% said that partnerships will be the most important type of relationship for senior living operators to have with health care systems such as hospitals and physician groups.

However, only 10% of respondents said they currently have a partner relationship. About three-quarters said they have either no relationship or only get an occasional referral from a hospital.


Policies implemented under the Affordable Care Act are meant to transform the U.S. health care system to better manage population health. New Medicare payment mechanisms incentivize providers across the continuum of care to partner up and coordinate services, with the goal of improving beneficiaries’ health outcomes and lowering costs of care.

Post-acute providers that rely heavily on Medicare and Medicaid reimbursements, such as skilled nursing facilities, have been on the “leading edge” of this trend toward partnering with acute care providers, Perkins Eastman Principal and Executive Director David Hoglund, FAIA tells SHN. Now, the entire senior living sector is grasping the implications of health care reform.

“I think people are realizing that the entire continuum is going to be impacted,” he says. “I think there will be other unique opportunities for senior living providers.”


Win Partners with Metrics

One ACA policy that already has affected senior care providers is the Medicare penalty tied to hospital readmissions. If a hospital sees too many patients returning within 30 days of discharge, its Medicare payments get docked.

With this in mind, hospitals increasingly want to work more exclusively with post-acute providers that can keep patients from returning. SNFs have been lining up to show they excel in clinical areas such as medication management, infection control and pressure ulcer care, which ultimately means they send fewer people back to the hospital.

Assisted living providers, CCRCs and other senior living operators also will have to show positive metrics to forge health system partnerships, Hoglund stresses.

“It’s going to be not just about bed sores and days in a rehab bed,” he says. “Senior living organizations are going to have to make the case for why they’re a good partner by keeping people out of hospital through good population management.”

Hoglund is concerned that even though there now is widespread acknowledgement of the need for partnerships with accountable care organizations (ACOs) and similar multi-provider collaborations, senior living operators might have trouble advocating for their inclusion.

“I don’t know that senior living providers have figured out how to make their case to ACOs, about the value they have through their community-based services and geriatricians,” he says. “They’re providing savings already. I don’t know they have the metrics to demonstrate that.”

The Retail Opportunity

Given that many respondents to the Perkins Eastman survey were affiliated with a CCRC, where skilled nursing and post-acute rehabilitation often are important services, it might be unsurprising that so many viewed health care and senior living convergence as a major trend.

However, even senior living operators that don’t have as much intersection with hospitals and physician groups might be shrewd to look at the bigger picture and pursue partnerships with some other types of emerging health care providers.

“We’re already seeing the Walmart-ization of health care,” Hoglund explains. He notes that retailers such as Walgreen’s have begun offering health care services in stores, and says that senior living providers might partner with these businesses.

“We’ll see new co-location of services,” he predicts.

He paints a picture of a senior clinic and an adult day care center and a pharmacy, and maybe even a Starbucks, all under one roof.

“That may be out there, but it’s going to come,” he says. “It’s clearly going to come.”

Hogland’s vision of a blended retail-senior care setting might seem farfetched, but providers themselves acknowledge the need for such outside-the-box thinking. About 60% of respondents said that the traditional CCRC, which offers life care and charges an entry fee, is “endangered.”

While this was the first year that Perkins Eastman polled providers on the convergence of health care and senior living, a survey from five years ago also posed the CCRC question — and garnered the same response. This might be related to another finding that has remained consistent across the two surveys: A majority of respondents continue to believe that the economic crisis that began in 2008 has permanently changed people’s approach to senior living.

If people still are resistant to sinking large sums into CCRC entry fees despite having more disposable income and better performing investments, the need for innovation has become all the more pressing, even if it is difficult to envision alternative models of care.

“I think we have to see more models that are unique and different,” Hoglund reiterates.

Other notable findings from the survey were that memory support programs are booming and household models of care continue to catch on. Almost 70% of respondents are creating new programs with an assisted living focus and nearly 25% are addressing memory care throughout the continuum. Household models of care are gaining ground equally for long-term care and assisted living/memory care purposes.

Click here to access the complete findings.

Written by Tim Mullaney

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