Senior Living Providers Positioned For More Managed Care Partnerships

Independent living and assisted living providers today offer a host of ancillary services that can help residents maintain wellness and keep them out of hospitals and other high-cost health care settings. Having these capabilities should make senior living an attractive partner to Medicare Advantage and managed care organizations, but these relationships are still rare.

These are the findings from a first-of-its-kind survey of senior housing providers, undertaken by George Mason University’s Program in Senior Housing Administration, in conjunction with the American Seniors Housing Association (ASHA). Full results were recently shared with ASHA members through a Special Issue Brief.

“We’re the one industry that accesses older adults just prior to them requiring high-cost health care services,” Andrew Carle, founding director of George Mason’s senior housing program, told Senior Housing News. “This is a massive opportunity for senior housing.”

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Providers in good position

The survey was co-authored by Carle and John Cantiello, Ph.D. It was administered between mid-January and February 2018, with responses collected from 50 senior housing provider companies, including 16 of the 50 largest, as tracked by ASHA. That represents about 1,500 individual communities, with a total of roughly 138,000 units.

Senior living providers have been expanding ancillary services in recent years for a variety of a reasons. They are seeking additional revenue in the face of occupancy pressures, and also want to bolster resident wellness and become more important players in the health care system writ large.

So, unsurprisingly, the vast majority of survey respondents—78%—said that they do offer access to at least one ancillary health care service in a formal way, such as through ownership or a written partnership with a third-party provider. The survey defined ancillary services as those not included in the resident agreement.

There were some surprises when looking at trends in assisted living versus independent living, Carle said.

“It was pleasantly surprising to see the extent to which independent living providers are working hard at keeping people independent [through ancillary services],” he said. “They should get credit for that.”

Overall, 86% of independent living providers said they offer at least one ancillary health service. The most commonly available were rehab, at 84%, and private duty home care, at 81%. In addition, 38% of IL providers said they own their own private duty agency. Rehab was the most common ancillary service provided via a third-party lease.

In assisted living, 88% of providers said they offer at least one ancillary health service. Rehab and pharmacy were both offered by 88% of respondents, followed by primary physician care, offered by 74%. All three services were most often provided via third-party service agreements.

In both IL and AL, the least-reported ancillary service was adult day care.

To forge partnerships with managed care systems and payers, it will be important to not only offer an array of services but to collect data showing that resident health and wellness outcomes are strong—and to have the right electronic health records (EHRs) to share that data.

Among AL respondents, 98% reported tracking at least one of 21 common health outcomes, including falls with injury and medication errors.

Only 54% of IL respondents reported tracking at least one measure. Falls with injury and falls with ER visit were the most commonly tracked at this level of care.

Overall, there is a high level of EHR use, with 86% of all respondents using either partial or full EHRs. About half of EHR users reported an ability to interface with other health care organizations.

Partnerships still rare

The findings suggest that senior living providers are well-positioned to partner with managed care systems and payers, such as accountable care organizations (ACOs), Medicare Advantage insurers and hospital networks, said Carle. However, very few senior living providers are currently involved in these third-party relationships.

Among all 50 respondents, only 14% reported a formal, written relationship with an ACO, 12% reported this type of relationship with a hospital or physician preferred provider network, and 10% reported this type of relationship with a Medicare Advantage plan.

Informal relationships were also rare across the board.

However, it’s important to keep in mind that even within a single company, it’s hard to make generalizations, noted Jerry Frumm, vice chairman and chief investment officer of Chicago-based Senior Lifestyle Corp., one of the largest providers in the nation. Frumm is also chairman of ASHA’s public policy committee.

“In some communities, we have a more robust schedule of [ancillary] services and deeper relationships with health care providers, and in some areas we’re not so far along,” he said, speaking of Senior Lifestyle.

This gets at the fact that ACOs and MA have greater penetration in some markets than others.

However, there are some steps that the senior housing industry could take to drive more third-party relationships across the board, Carle and Frumm said. One big step could be developing standardized health outcome measures.

A “gatekeeper” at, say, a Medicare Advantage insurer will want to make apples-to-apples comparisons between different senior living providers, in order to partner or contract with the best ones, Carle said. While some measurements are straightforward, such as the percentage of residents who fall and are hospitalized within 30 days, there is variation in how providers measure other things, such as average length of stay or acuity at move-in.

“We might begin to provide a system that creates standardization, and that would allow us to have those conversation with ACOs and MA organizations to be able to say, this is what we can do, this is our track record, this is how we can help you decrease re-hospitalizations or initial hospitalizations,” said Frumm. Developing standard benchmarks has been discussed by ASHA’s public policy committee, he added.

There are some unknowns out there, such as the impact of a new rule that will allow Medicare Advantage to cover non-skilled in-home services starting in 2019. This could open up MA payments for services offered in senior living communities.

“I don’t think anybody knows what the MA connection is going to look like,” Frumm said. “We’re just starting to talk about those things … There’s a lot of conversation.”

Still, he believes that offering more robust ancillary services and care coordination is a smart move for providers. He points to Senior Lifestyle’s recent purchase of a Chicago-area home health company as just this type of investment.

Carle is even blunter, saying that senior living providers ultimately will be “in or out” with health systems and payers, which will increasingly drive referrals. Partnering with these entities is therefore not only a huge opportunity but a mission-critical one, he believes.

“Everybody is out there fighting over occupancy, and my response is, if you want to address that, start getting yourself positioned for this data-driven decision-making environment, not only with payers but consumers,” he said. “Consumers are going to be doing their homework, and they’re more interested in whether you’ll keep their mom out of the hospital than if you have a chandelier or baby grand piano.”

Written by Tim Mullaney

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