How Senior Living Providers Can Crash the Health Care Party

The U.S. health care system is changing in big ways, and senior living companies have much to contribute in the dawning era—but it hasn’t been easy for them so far. They have not been allowed to participate in some of the emerging models of care affecting their residents, and now is the time for senior living providers to invite themselves in and prove they belong, according to some industry leaders.

The new models were ushered in after the Affordable Care Act passed in 2010, and sometimes are lumped together under the term “pay for performance,” in which reimbursements through Medicare and similar programs are tied more to quality outcomes than simply to services performed.

In fact, the Centers for Medicare & Medicaid Services (CMS) put forth a goal of having 30% of Medicare payments tied to these new models, such as Accountable Care Organizations (ACOs), by the end of 2016. That goal already had been met as of March.

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As the pendulum has swung toward these new models, senior living providers have seen skilled nursing facilities, home health agencies, hospitals, physician practices, and other parts of the senior care continuum start to form partnerships to better coordinate care, sharing in the potential financial rewards for doing so and the financial risks of failing. However, with independent living and assisted living being primarily private-pay rather than part of the Medicare ecosystem, this industry has been largely excluded from the new partnerships, at least in an official capacity.

That’s problematic, because many of the Medicare beneficiaries who are being cared for in these coordinated care models reside in senior housing communities, said Stephanie Handelson, president and COO of Benchmark Senior Living, at last week’s Post Acute Link Care Continuum Conference in Chicago. Based in Waltham, Massachusetts, Benchmark operates senior living communities in seven states, covering the full continuum of independent living through skilled nursing, as well as memory care.

Furthermore, because of the way assisted living has evolved in the last three decades, these residents have complex care needs that the senior living provider is addressing, making these companies important health care players as well as housing providers, she pointed out.

“They are highly acute, frail, need three to five ADLs [activities of daily living], average length-of-stay is 22 months,” she said of typical AL residents. “We’re caring for a very frail resident who was a custodial long-term care resident previously.”

In addition to providing care for these seniors, assisted living companies in many cases are acting as care coordinators, facilitating the movement of their residents through other settings as needs arise, pointed out Steven Littlehale, executive vice president and CCO of PointRight Inc., a predictive analytics platform for post-acute providers.

“We know you weren’t invited to the party, but it sounds like you want to crash the party,” Littlehale said to Handelson, who confirmed that she does want to play party crasher. And in some ways, Benchmark and other senior living companies already are playing that role.

Seizing the opportunity

In terms of what senior living companies can contribute in new coordinated care models, Handelson emphasized the role that they can play in reducing rehospitalizations. This is a primary concern in new care models, given that they often reduce Medicare reimbursements for hospitals and other providers if readmissions are too high.

If seniors have two or three days of oversight with 24-hour observation and medication management after leaving the hospital, the likelihood they will return decreases, Handelson said. Senior living providers potentially could play a larger part in providing this sort of post-acute care for all Medicare beneficiaries, but the most obvious opportunity is for those seniors who are returning to the senior housing community.

“We could have a better partnership between the hospital and home health and the hospice, and have everybody actually working together,” she said. “We’d have better outcomes.”

It’s a welcome message at least for home health providers, said Tracey Moorhead, president and CEO of the Visiting Nurse Associations of America (VNAA), a major association for the home-based care industry.

“My members need to hear that they have an opportunity to partner with organizations like yours, based on their quality scores and outcomes,” Moorhead said.

Benchmark has indeed formally partnered with home health agencies and physician practices at all 52 of its properties, after putting them through a rigorous vetting process, said Handelson.

“The way we pick our providers is unbelievably picky. It’s like getting married,” she said. “We’ve had people we’ve dated, and we ditched them because the way they provide the service is so critical to the health and wellness of our residents. If I couldn’t get home health to come quick enough if I needed an IV, I’m going ot have to send that resident out [to the hospital].”

The other side of the coin is that once a company like Benchmark commits to becoming more integrated with the changing health care system, it not only has to carefully select partners like home health agencies, but meet the needs and preferences of the entity that is most responsible for controlling the patient’s care, said Handelson. In Benchmark’s markets, that is the physician or the ACO that the physician belongs to.

That’s because these groups have scale—a single ACO can cover multiple senior living properties and as many as 1,000 residents at a time, she said. As such, they have their own preferences with regard to home health and hospice providers and other terms of the partnerships.

“Although this is so complex, there’s opportunity for us one way or another, but everyone needs to figure out who the new master is,” she said. “I personally think it’s the physician.”

However, senior living providers should not necessarily be resigned to ceding control to an ACO or similar entity, some other leaders suggested. It was not party crasher but another metaphor, “general contractor,” that Peter Kress, vice president and CIO of Acts Retirement Life Communities, invoked. In the general contractor role, the senior living provider would be the primary manager of residents’ care, enabling maximum control over cost and quality.

“In long-term and post-acute care, the biggest danger we run is that we’re going to be bricklayers instead of being the general contractor, being the person who owns the customer relationship,” he said. “And yet practically every setting has a significant opportunity to own customer relationships.”

The data dilemma

To succeed in owning the relationship, the key is having the most information and insight into those customers, Kress said. Technology investments therefore should be targeted to support this goal, he argued.

This is not necessarily the approach that many providers are taking, considering that the federal IMPACT Act is defining more standard data collection for post-acute providers, as part of an effort to compare different settings and set payment rates accordingly. But putting too much emphasis on meeting these uniform standards may not be wise, according to Kress.

“[When we] shift our mind from how we get paid to customer-centricity, we set a way higher bar for the information we gather,” he said. “As soon as we set that higher bar, the quality of information we gather, it all of a sudden becomes straightforward for us to comply with the information sharing partner to partner.”

This is a compelling vision, but “CMS is not making it easy to achieve that Nirvana,” said Moorhead. Despite the IMPACT Act, the agency is imposing different regulations on different areas of post-acute care in such a way that it challenges the ability of providers to have interoperable technology and efficient data sharing, she said.

While she did not weigh in specifically on the question of being CMS-centric versus customer-focused, Handelson said some senior living providers may have to shift the way they think about themselves and the tech supporting their business.

The assisted living industry is built on customer relationship management (CRM) software that was put in place in the early days, when a more pure hospitality focus could be successful, she said.

“We’ve made a huge investment over all this time, and now we’ve got to take that and reinvent ourselves if we want to play in this … health care space, whether we’re part of the payer mix or not,” she said. “We have to be able to communicate in the same language [as other providers], and now it’s all very care-centric whereas before it was hospitality-centric.”

This may be one of the most important steps for a senior living provider to make inroads with health care partners, because having the right care-related metrics will enable providers to demonstrate that they can help achieve the goals of lowering costs while improving outcomes.

As PointRight’s Littlehale put it, “You have to bring a lot of the data with you to be welcome at the party.”

Written by Tim Mullaney

Photo Credit: “Red, Blue & Orange Balloons,” by Knar Bedian, CC BY 2.0

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