How Senior Living Providers Can Start To Adapt For Managed Care

Managed care partnerships are gaining steam in senior living, and although many providers are well-positioned to forge those kind of relationships, not all of them know how, or where, to take the first step.

Managed care is an umbrella term that can refer to a variety of arrangements among health care providers and/or payers. Generally, managed care is about coordinating services to lower overall health care costs while improving outcomes for a patient or beneficiary population

Recent Medicare Advantage changes are one driver for bringing more managed care into senior living. Under new policies floated this year, these insurance plans will be allowed to cover non-skilled in-home services for the first time, opening the door for MA to pay for services commonly offered in senior living settings.


However, there’s also a growing appreciation of the role that senior living can play generally, in keeping seniors thriving and out of more expensive settings such as hospitals. In the not-too-distant future, more senior living providers will link up with health systems, primary care and specialist physician groups, rehab, home care, hospice, social services and other organizations to drive up quality outcomes and help set appropriate prices.

Savvy operators will be able gain a competitive advantage by raking in higher reimbursements and enjoying better economic sustainability, but those companies will also have to balance their technology usage and foster strong relationships with their partners. In general, the senior living industry has a lot of unrecognized value with regard to managed care, according to Will Saunders, CEO of managed services partner AllyAlign.

“The senior living industry is definitely stronger together, and partnering with peer providers in certain markets makes a lot of sense,” Saunders, whose company helps providers start their own Medicare Advantage Institutional Special Needs Plans (I-SNPs), told Senior Housing News. “The issue is, how do you … get recognized for your value?”


Saunders spoke about managed care during a session at the first-ever Ziegler LinkAge Funds Symposium in Chicago earlier this year in July. He was joined by Neil Borg, a senior managing director at Ziegler; and Steve Wermuth, partner at Strategic Health Care, a health care consulting firm.

While the session’s discussion was wide-ranging and covered a variety of in-depth topics related to managed care, one big takeaway emerged: it’s definitely not going away.

First steps

To begin down the road to managed care success, senior living providers must first take note of their strengths and assess their weaknesses to see how ready they are for this model of care delivery, and to get a sense for how they can best drive value within a managed care framework. This will enable providers to persuasively make their case for inclusion in managed care networks.

Specifically, senior living operators must learn to highlight the things they do well, such as their relationships with patients, payers or provider alliances; and minimize their shortcomings, such as their limited scale or market penetration. They should also know the quality and cost of their care for benchmarking purposes.

“I would do a self-assessment and look at it from two lenses,” Saunders said. “Where are my most profitable revenue lines where I have the biggest moat? And where do I have opportunities to partner and take risk?”

For example, senior living providers are well-advised to compare their length of stay and readmission rates to local and national averages. If a senior living provider can show that its residents are less likely to be readmitted to a hospital or transfer to a higher level of care, that could make them an attractive partner to a managed care network.

“Understanding where your market is is really important,” Saunders said. “The managed care game is all about being faster than the average bear.”

Marquis Companies, based in Milwaukie, Oregon, has been an early mover on managed care. The company offers its own Medicare Advantage plan, created in partnership with AllyAlign. Marquis operates skilled nursing facilities, assisted living communities, home health and pharmacy, and this diversification across the continuum has helped it move into a managed care world. Whether a senior living company diversifies into other service areas or partners with others, managed care demands having the ability to serve seniors as their needs fluctuate.

“[Operators] should focus on their entire continuum of care,” Wermuth said. “A provider with a good skilled nursing facility but poor home health program and weak assisted living will not be as attractive as a provider who shows great quality across their continuum.”

And senior living operators can’t afford to ignore technology. In particular, analytics are critical to understanding patient needs, and can help providers close gaps of care, drive proactive interventions and create long-term preventive health management strategies. With good analytical tools, providers can more efficiently use emerging innovations such as telehealth, remote monitoring, and virtual care, while driving better care coordination and outcomes.

One point of caution, however: senior living organizations should make these assessments, and agree to changes, slowly and with purpose. Specifically, they should take their time working with management teams and boards to educate and inform them about the benefits, risks and economic models tied to managed care.

Written by Tim Regan

Companies featured in this article:

, ,