Inside the Senior Living Industry’s Value-Based Care ‘Arms Race’

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If the speed at which senior living operators were adopting value-based care models accelerated last year, in 2024 the effort has kicked into an even higher gear.

Within the last two months, senior living providers including 12 Oaks, Benchmark Senior Living, and Epoch Senior Living all announced various partnerships tied to value-based outcomes through primary care alignment, technology integration, or care coordination. And the nation’s largest senior living operator, Brookdale Senior Living (NYSE: BKD) is currently on the hunt for a new gerontologist who will in part focus on “the integration of value-based care principles into assisted living and memory care settings.”

“To some degree, it’s a bit of an arms race,” 12 Oaks Senior Living President Greg Puklicz told me regarding value-based care structures in senior living. “We have stabilized occupancy, we’ve stabilized staffing—what’s next? We’re looking at the future.”


This comes as the Centers for Medicare and Medicaid Services (CMS) is pushing to have all Medicare beneficiaries in a value-based arrangement by 2030. But government agency urging aside, I believe it’s even more important for operators to participate in the industry’s health care-driven future given the opportunity at hand.

In this week’s exclusive, members-only SHN+ Update, I analyze the current pace of value-based care in senior living and offer key takeaways, including:

– Data from a recent “pulse survey” of SHN readers reflects accelerating VBC involvement and top challenges


– How variety in value-based care is spurring growth

– What challenges remain for operators seeking resources to support value-based care growth

Variety of VBC approaches

An ever-present topic du jour at industry conferences, value-based care transitions in the industry are increasingly becoming more common as operators deal with truncated margins and increased care costs. Outside of the senior living industry, the broader health care landscape is evolving in regard to value-based care.

There are now over 11 million beneficiaries in the Medicare Shared Savings Program and another Medicare accountable care program, ACO Reach.

In April, the National Association of ACOs and other groups released a “playbook” on best practices for advancing value-based care in the private sector, and last Wednesday the U.S. House Committee on Energy and Commerce Subcommittee on Health met on value-based payment models.

In public comment to the Congressional subcommittee, the American Hospital Association noted that the shift toward value-based modes was “slower than anticipated and more needs to be done” to drive change through an “on-ramp” to accepting risk, risk adjustment and “upfront investment incentives” to support value-based payment.

These recent developments paint a picture of value-based care’s expansion as well as the ongoing challenges in getting these models right. The same trends can be seen in senior living.

With regard to the pace of change, a recent SHN pulse survey of 20 senior living operators found that 80% of respondents reported growing value-based care models in the last 12 months.

In terms of what these models consist of, one operator touted the rollout of a “predictive EHR” platform related to resident outcomes and care delivery, along with another operator’s journey partnering with fee-for-service providers to track health outcomes to “get our data aligned” with value-based benchmarks.

Another operator highlighted their company’s growth with a third-party primary care group. Other recent growth noted in the survey included the ability to better align care and costs as “frequency, intensity, and severity of medical and psychiatric problems are monetized by increasing care level charges.”

One operator mentioned incorporating value-based care elements with lifestyles based on “various wellness concepts” across active adult and independent living residences.

In addition to our survey results – which were anonymous – there are numerous examples of what particular providers have been doing to expand in value-based care.

Recent examples include 12 Oaks partnering with technology and electronic health record company August Health to enhance the company’s care and compliance based around value-based care goals.

A longtime player in the value-based care space, Juniper Communities, is a partner with Curana Health – a provider-led primary and post-acute organization AllyAlign Health—giving senior living operators access to Medicare Advantage (MA) plans.

Last year, St. Louis Park, Minnesota-based Lifespark conducted a review of its senior living portfolio and found that site leaders that practiced its health technology and home-based care model, Lifespark Complete, saw a 30% decrease in hospital readmissions within those communities.

“It takes a change, both mindset and in leadership at the site level to really move the needle in a meaningful way,” Lifespark Vice President of Growth Matt Kinne told me last August.

Last year, Serviam partnered with Curana to launch a value-based care alliance in Virginia.

“We’re learning that this is not a one-size-fits-all approach because the value is very nuanced and contextual, because at the end of the day it’s about high-performing local networks gaining access to risk,” Bickford Senior Living President Andy Eby told me.

Other senior living providers have joined the likes of value-based care initiative Perennial Consortium, an effort co-founded by Juniper Communities, Ohio Living and Christian Living Communities to access a share of value-based care benefits.

In the last four years, the largest operator, Brookdale Senior Living, has grown its operating platform to align with value-based care.

Brookdale continues to grow its HealthPlus program in preparation for a time when “virtually every senior will be on a Medicare Advantage plan,” as CEO Cindy Baier told SHN earlier this year.

Alignment and differentiation

But while the shift toward value-based care is speeding up, these examples show the great variety in approaches that are being taken. This again mirrors the various VBC models that have proliferated across the entire health care continuum, and also speaks to the desire of providers to differentiate themselves from their competition. Within these various approaches, however, there are a few themes that are emerging around core goals that providers are pursuing and that will be necessary for success. These include alignment of interest and realistic timelines.

With regard to alignment, this involves alignment between senior living providers and other providers and payers within value-based systems; this is no easy feat to accomplish, as health care and senior living have been “chronically misaligned,” Eby recently told me.

Puklicz told me that operators must be “differentiating themselves” within the broader health care ecosystem as care needs rise. That is mirroring skilled nursing industry sophistication in the last two decades, according to Nick Gesue, founder and CEO of Alder View Capital.

While senior living operators and health care providers continue to grow partnerships and find alignment in reaching value-based care goals, significant challenges remain in ensuring that such structures are fair and beneficial to senior living providers.

Priority Life Care CEO Sevy Petras told me “something’s gotta give” in health care providers and senior living operators growing relationships to reap mutual benefit. Some of the biggest challenges operators face in adoption of value-based care are cost and additional staffing required to meet new goals.

“My concern is we don’t have a seat at the table currently to establish the guidelines for how to alleviate care costs and additional expenses,” Petras said.

And she’s not alone: In our recent survey, 35% of operators said “finding viable payment sources” was a key challenge in adopting value-based care models, followed by 28% of operators noting “staffing shortages and lack of training” as another obstacle.

Still, there are new VBC frameworks that show promise for senior living’s involvement.

The recently-announced CMS GUIDE model aims to help older adults who have dementia stay healthy at home longer while trying out a new payment for participating providers. Even the structure of the GUIDE model, which will reimburse for care assessments, care planning, and educating caregivers—includes components that many senior living operators do well.

“We are doing a lot of what CMS is reimbursing providers for that are part of GUIDE and it will ultimately provide bonuses for the providers that can deliver better outcomes,” Solera Senior Living CEO Adam Kaplan told me.

Kaplan also made the point that in addition to these moves to position senior living within the broader health care landscape, the shift into value-based care also demands that senior living owners and operators get aligned on objectives, timelines and returns.

Earlier this year, Kaplan noted that the value-based care model in senior living was “evolving” and how operators could in the future see reimbursements in assisted living and memory care to offset care costs.

Kaplan is right in saying value-based efforts made now in senior living would take between 5 to 10 years to bear fruit, a cycle much slower than traditional real estate investment—making the shift to value a steeper hill to climb if capital and operators can’t align.

“The shift from fee-for-service into value-based care is high octane and higher risk,” Kaplan told me.

Operators like Solera and Benchmark partnered with “payvider” Curana Health to provide direct primary care to residents, rather than seek a Medicare Advantage-based arrangement. Kaplan told me that was due to the “heavy lift” in asking residents to switch from traditional Medicare to a MA plan.

“We’re focused on laying the foundation,” Kaplan told me. “We want to prove the value creation, and we believe the economic benefit will follow.”

All these efforts by senior living providers to lay foundations are important, and I think will help operators that embrace value-based care elements to stand out from their competitors. One of my upcoming SHN+ articles will dive into the nuance and nature of the varying value-based care approaches–stay tuned!

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