Ohio Living CEO: Operators Must Have ‘Greater Appetite’ for Risk in Value-Based Care 

Senior living and care providers in the future must consider building a greater appetite for assuming risk when it comes to joining value-based care initiatives in order to spur growth, according to Ohio Living CEO Larry Gumina.

Ohio Living has been a long-time proponent of the value-based care effort, having worked as one of the partners of the Perennial Consortium, a value-based care initiative that includes Christian Living Communities, Juniper Communities and Ohio Living with AllyAlign Health founded in 2019.

“Scale is going to be more important to providers to assume risk from a value-based perspective, not only with the existing lives that they have in their ecosystem, but to grow beyond,” Gumina recently told SHN at the 2023 LeadingAge conference in Chicago. “If you have a larger base, that makes you more efficient in terms of spreading your cost structure out.”

Ohio Living collectively decided to walk away from its potential affiliation talks with Brio Living Services, a Michigan-based provider operating 24 properties in the state. In January, the deal had originally looked to improve services and optimize workforce efficiencies to prepare for new growth within various aspects of senior care.

“Part of the mega-trends that are taking place in the industry regarding operational complexities—leadership, turnover, access to capital—those are going to continue,” Gumina said. “The scaling within our industry segments will continue to go forward, but at the end of August, we discontinued those discussions.”

‘Continue to scale in Ohio’ and beyond

In the near-term, Gumina said Ohio Living would continue to seek growth via increased scaling in Michigan, Ohio and Pennsylvania.

Ohio Living is in the process of opening enrollment for a general Medicare Advantage (MA) plan for independent living residents across its 12 life plan communities through the Perennial Consortium. As it stands, Ohio Living has the needed framework in place across 18 counties in Ohio, with plans to introduce a Perennial Advantage plan in Pennsylvania in 2025. 

“We’re saying that as we bring primary care onto our campuses through our joint venture with Curana Health, if we can improve access to care for IL residents and assume that Medicare payer risk for them, any additional excess at the end of the year can create a revenue stream right back into the campus to offset future increases.”

This pursuit of value-based care comes out of what Gumina sees as a necessity for the industry’s evolution, and he added that Ohio Living wants to leverage its experience in managing value-based care efforts.

“More and more of these value-based, innovative strategies can be more important for sustainability,” Gumina said. “If you have a small organization, it’s hard-pressed to jump into that space.”

In the short-term, Gumina said that the independent living MA plan has “been met with a lot of interest” this year. In January, Otterbein SeniorLife joined as a partner on the new MA plan for independent living residents and plans can be introduced in January of 2024.

That’s where Ohio Living can step in with its scale to continue to grow regional partnerships, Gumina added.

“We can continue to fight the tide that’s coming in or jump on the wave, and we jumped on the wave,” Gumina said. “We’ve been able to save some of those dollars…We were able to reinvest savings back into the mission of the organization. We want to jump out first.”

In terms of community growth in 2023, Ohio Living opened a new, 57-unit mid-rise community as part of a $43 million project. Outside of its traditional footprint, Ohio Living’s home-based services grew by 19% this year, but that was coupled with a reduction of revenue in communities. That dip in revenue was attributed to the company jettisoning 350 skilled nursing beds.

During the height of the pandemic, Ohio Living had a pivotal leadership meeting to discuss future growth. Ultimately, the company decided to push forward with its growth plans in the greater Columbus, Ohio market, which resulted in the $43 million mid-rise project in Westminster that recently opened.

Future growth to continue despite challenges

With the effort for the MA plan for independent living residents well-underway, Gumina said he expects Ohio Living to continue to grow.

That could look like growth in the Columbus metro area and greater Cleveland market.

“We’re going to continue to proactively position ourselves to partner with others, whether it’s on the home-care service front, the campus community front because mega trends are not going to decline,” Gumina said. “We want to proactively position ourselves with others.”

Those challenges won’t diminish anytime soon, Gumina said, noting that the organization would continue to seek to improve leadership turnover, while continuing “to support other providers” to spur growth across the senior care landscape.

Through investing in the workforce, while widening care offerings, Gumina said Ohio Living could make a dent in the broader industry headwinds all providers face.

“We have to continue to invest in our workforce, from a retention perspective, we’re proud of our culture…and we’ve got to recruit and create opportunities to introduce new talent into our industry,” Gumina said.

While there’s no magic silver bullet to solve staffing issues, Gumina said success for Ohio Living would be predicated on creating a trusting environment while supporting staff in their roles across the company’s 2,400 team members. Frontline workers on the environmental services and culinary departments remain challenging to fill, a common refrain heard as of late across the industry.

But with the challenges at-hand, Gumina remains optimistic based on the industry’s strong demand metrics based on demographic trends.

“We’re moving health to home and we’re caring for more people and while the labor market is going to get more challenging, I think there’s opportunity,” Gumina said. “It’s challenging, but it’s a very exciting time to be in our industry.”