Ice Cream and ACOs: How Senior Housing Can Tap New Revenue

When senior living executives approach a local hospital system or a powerful health insurance provider to discuss collaboration, they might want to act like they are entering an ice cream parlor.

At least, that’s the perspective of Bruce Chernof, M.D., one of the nation’s foremost experts on senior care and aging issues. He headed up the Congressional Long-Term Care Commission, which in 2013 turned in a 130-page report with recommendations on how to revamp the delivery and financing of long-term services and supports in the United States. He currently is president and CEO of The SCAN Foundation, one of the largest organizations in the country dedicated to promoting high-quality services for seniors.

Chernof recently sat down with SHN to share his thoughts on the recent White House Conference on Aging, a once-a-decade event bringing thought leaders together to discuss ways to improve seniors’ quality of life. The conversation turned to opportunities for improving access to affordable senior services and why providers need to “think differently.”

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SHN: The White House Conference on Aging took place Monday. Do you think it was a success?

Bruce Chernof: I thought it was particularly good that the president spoke, and as forcefully as he did, about the need to think about aging in the U.S. Aging generally is one of those issues that doesn’t get the kind of attention it needs to in Washington. The previous White House conference, the president didn’t attend at all. So White House visibility is an important part of the discussion.

It really took a different tack than previous conferences. At its core, the underlying theme was to reimagine how we think about aging in this country. I think that’s important, because often the discussion goes immediately to the poverty discussion, the ‘sick, poor and alone’ discussion, and we get deep in the weeds of Medicaid policy and those programs are incredibly important for the most vulnerable among us.

But the reality is, we’re all going to age and the vast majority of us will have needs as we age. That doesn’t necessarily mean nursing home care. It could be in the community or in an assisted living environment, a whole range of things, but we need to see aging as a positive thing, a part of life. The conference really showed the value of that broader discussion.

SHN: Do changes have to be made to ensure that seniors have access to that whole range of senior living options that exist?

BC: I do think that we need a broader solution to help people plan for their needs as they age. Just to keep looking at Medicare and Medicaid is too narrow. And the current long-term care insurance market is really broken. Those products are not accessible, affordable, and in many people’s lives, not reliable. Long-term care needs are clearly an insurable risk, but it’s likely going to take some public-private partnerships to get it there.

[SCAN] has funded modeling with the Bipartisan Policy Center to begin to think about those options. It’s a really good bipartisan mix working on it. It’s really clear we need to help working families plan better. We need a policy discussion and some new tools that will better enable families to plan.

SHN: So helping consumers plan and pay for senior living is one part of the puzzle. Let’s turn to the provider side. Do you believe private pay senior housing operators in particular need to play a part in improving the status quo?

BC: Senior housing providers need to think differently. It’s not going to be enough to just be a housing provider. They need to see themselves as part of a broader continuum of support.

At the end of the day, it’s about how providers think about their role in being supportive of their communities — do housing providers have a role in care coordination for folks who don’t live within their walls yet but in the broader community? Are they fostering coordination and connectivity with the medical support system? To the degree that good care coordination prevents hospital readmissions or improves outcomes in a new value-based environment, should housing providers have opportunities to be part of shared savings models, like accountable care organizations?

I think housing providers need to think beyond just the operating of the bricks-and-mortar building. They often don’t interface much with the medical system, but to the extent they do, it will open potential new revenue streams and new business opportunities in a much more connected world.

SHN: Senior living providers say they are having a hard time getting traction with ACOs and other types of coordinated health systems, in part because they’re seen as hospitality rather than health care providers. Any advice on how they can get a seat at the table?

BC: We work not so much with senior housing providers but we do work with community providers in California, like Area Agencies on Aging, to help them understand how to better link with health plans and other risk-bearing entities. There are a few points I believe are relevant for senior housing.

Health plans receive the capitated payment and are expected to share savings around the provision of medical services with whomever their partners are, including potentially the state and federal government. They’re not in the business of hospitality or housing, per se. I think it’s really important for housing providers to understand that it’s a completely different kind of client.

[Health plans’] primary focus will be around care coordination for very high-needs individuals, care transitions when people go from one area to another, and to the extent an assisted living environment can forestall the need for a skilled nursing environment, those are opportunities for a senior housing provider to improve outcomes and reduce costs. And that’s really where the ACOs and health plans are. It’s not just lower cost or better care, it’s both. For housing providers, it’s understanding that care coordination is the heart of it.

SHN: Are there specific programs or services that set up senior housing providers for success in this area?

BC: It’s a little like going into an ice cream store. There are a variety of different flavors and ways you can get it—in a dish, in a cone, with chocolate sauce. There are a variety of offerings [a health plan] might be interested in. It might be around readmissions, around a small subset of high utilizing individuals, early warnings around high-risk seniors.

My sense is, senior housing providers are still learning how to incorporate that care coordination that provides value in a contractual relationship. But it’s not easy, and it’s a two-way street. It’s not only a burden on the housing provider. It’s an evolving environment, and not everything is going to work out of the box. It’s an iterative process. But should housing providers continue to prep for an evolving future? The answer is yes.

Written by Tim Mullaney

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