Within just three years, $265 billion worth of health care services for older adults could shift from facilities to the home, without reducing quality or access.
That’s based on a survey of physicians conducted by McKinsey & Co., with results shared in a report issued Feb 1.
The report is a must-read for senior living leaders — at least, for any senior living leaders who are interested in capturing a share of that $265 billion and remaining relevant in a health care system based increasingly on what McKinsey calls “Care at Home.”
In this week’s exclusive, members-only SHN+ Update, I analyze the report and offer five key takeaways for how senior living providers should adapt to the rise of Care at Home:
— Claim a seat at the table as a residential setting
— Focus on the cohort of people with high-risk, chronic conditions
— Invest in necessary Care at Home technology
— Expand the types of care in senior living
— Participate in new payment models
Claim a seat at the table as a residential setting
In explaining the rise of Care at Home, McKinsey points to several factors. Many are related to technology, including the explosion in telehealth usage during the Covid-19 pandemic. But one factor in particular should capture the attention of senior living leaders: More patients with post-acute and long-term care needs may be evaluating their options.
The report explained:
“As baby boomers age and families contend with the ongoing impact of the Covid-19 crisis, a growing number of patients and families may be considering their options for post-acute and long-term care. Ideally, eligible individuals would receive care in the most appropriate setting, whether that is at home or in a facility for rehabilitation, assisted living, skilled nursing, or long-term care.”
The distinction between receiving care at home or in a “facility” for assisted living reflects that no matter how much senior living providers have worked to banish the “f-word” from their vocabularies — referring to “communities” instead of “facilities” (and “residents” instead of “patients”) — AL is still lumped in with more institutional levels of care.
But there is good news. Older adults and their families are indeed considering their options in a new light due to Covid-19, and robust and steady demand in recent quarters suggests that many are finding senior living an appealing option — not dreaded “institutions” but desirable alternatives to remaining in their single-family homes.
Indeed, they are even willing to pay premium prices to move in, according to sources such as Welltower CEO Shankh Mitra. Providers are becoming more adept at selling the core value proposition of senior living as a residential setting with plentiful opportunities for social engagement, as well as care.
To take advantage of the Care at Home shift, providers must build on this recent success in their messaging to consumers. They must also drive the same message home to policymakers at the state and federal level, to remain eligible for new funding streams and policy provisions meant to encourage and facilitate more home- and community-based services.
Focus on the high-risk, chronic conditions cohort
To demonstrate how the shift to Care at Home could change how services are delivered, the McKinsey report describes “hypothetical journeys” for six different “patient archetypes.”
The “high-risk chronic conditions” archetype is particularly relevant to senior living providers. This hypothetical patient is 80 years old, divorced with no children and has congestive heart failure, diabetes and depression.
In his “current state” — with today’s health care system — he is struggling. He has difficulty remembering to take medications, changing his lifestyle and keeping appointments, and he has no psychologist.
In a future “Care at Home” model, his primary care physician would assign a care manager, set up remote patient monitoring and provide a referral for telebehavioral-health.
That vision of the future is an improvement over the current status quo, but it still seems pretty bleak, if you ask me. This patient is still living on his own, with technology to keep tabs on him but no real, live human interactions. The McKinsey report does not explain why this hypothetical patient is depressed, but it describes an isolated and lonely existence. Virtual therapy sessions are not going to solve for that.
Clearly, an assisted living community — or an independent living community with access to health services — seems a natural fit for this patient archetype. But the McKinsey report doesn’t postulate that this patient will be in senior living due to the rise of Care at Home.
If senior living providers want a different future — want their communities to be the sought-after, natural destination for people like this hypothetical 80-year-old as Care at Home rises — they have to make an even more convincing case than in the past for why an older adult should not be content with a life of remote monitoring and remote connections, and should move from their single-family home.
To make that case, senior living providers need to expand on current capabilities to present a more “comprehensive offering.” Doing so is critical to expanding the consumer base and increasing revenue over the next few years, as the McKinsey report illustrates in this graphic:
Invest in Care at Home technology
The right technology will be essential if senior living providers hope to turn today’s capabilities into tomorrow’s comprehensive offering.
Remote patient monitoring is the most obvious technology in this bucket; tomorrow’s older adults will have remote monitoring in their single-family homes, so obviously the same technology should be in place in a senior living apartment. By capturing real-time health metrics via monitoring, providers should be able to catch potential issues and intervene to prevent costly hospitalizations or other complications.
Telehealth is another obvious technology that senior living communities must be able to leverage effectively. This type of tech made huge strides in adoption during the Covid-19 pandemic, and many providers increased their telehealth use and refined their operational practices in this area.
I would argue that senior living communities will have an edge on single-family homes insofar as they can integrate many different technologies into a single user-friendly platform. Such platforms could enable residents to check and track their key health metrics and medications, communicate with care teams as well as friends and family, and access engagement opportunities at the community that are personalized for their interests and goals.
On the backend, such a system could be crunching data to create business intelligence and predictive analytics to guide providers’ decisionmaking on care planning and operations.
Expand care offerings
The evolution of technology also is paving the way for increasingly sophisticated health care services to be provided in non-hospital settings, including in people’s homes. The hospital-at-home movement marked a watershed moment in Nov. 2020, with CMS’ “Acute Hospital Care at Home” waiver program.
Post-acute rehab, dialysis and infusion therapies already are being provided in the home, but tying these and other services together into comprehensive at-home offerings is the next step, the McKinsey report proposed.
To keep pace, senior living providers will need to facilitate such treatments in their communities by expanding their own capabilities and strategically partnering with groups that can deliver such services.
Already, the trend toward more robust and coordinated care is underway, as I described in my SHN+ Update last week. Today, providers are focused largely on bringing more primary care into senior living settings, with more sophisticated and specialized care sure to follow.
This evolution will bring challenges, including maintaining a residential atmosphere while more advanced clinical procedures are performed on-site. And there’s a long road ahead, considering roadblocks to more basic care that must be addressed.
For example, just this week, Massachusetts State Rep. Smitty Pignatelli penned an op-ed arguing for his “common sense health services in assisted living” legislation, which would allow AL nurses to administer injections, manage oxygen, treat wounds and undertake other essential care.
Participate in new payment models
The home is of interest to payers as a lower-cost site of care than hospitals or other facilities. Payers also see potential to reduce costs and improve quality by preventing adverse health events through more continuous care for people in their homes.
The McKinsey authors also proposed potential revenue benefits for payers through Care at Home, including from more clinically appropriate risk coding and improving the patient experience.
Clearly, payers have significant incentives to propel Care at Home, and they are doing so in several ways. These include designing benefits packages to support Care at Home, developing networks of Care at Home providers, and expanding reimbursement policies or adopting innovative payment models such as those that offer shared savings based on total cost of care. In these efforts, they are increasingly supported by federal and state policies, such as expansion of Medicare Advantage benefits to include more options for at-home chronic care management and support with activities of daily living.
Anyone who reads SHN on a regular basis knows that Medicare Advantage is increasingly supporting services that senior living residents receive, with a growing number of plans owned at least in part by senior living providers.
One example is Lifespark Senior Living, part of value-based care company Lifespark, which is owned in part by Medicare Advantage company UCare.
Lifespark acquired Tealwood Senior Living last year in part because the company recognizes that senior living communities are people’s homes, so serving senior living communities dovetails with Lifespark’s model of delivering more at-home care in value-based arrangements, CEO Joel Theisen told SHN.
Despite the well-documented growth of MA and its inroads in senior living, some providers that have achieved success in a private-pay model are reluctant to adapt. But with the Care at Home trend gaining steam and so much money to be claimed in just the next few years, the line between a cautious strategy and foolish adherence to the status quo is becoming razor-thin.
