Value-Based Care Can Help Drive Occupancy, Valuations, Outcomes in Senior Living | #seniorliving | #elderly | #seniors
Senior living’s shift toward greater clinical capabilities and integration across the care continuum is opening opportunities for providers to partner with primary care networks, physician-led accountable care organizations (ACO) and Medicare Advantage networks. Participating in value-based care could drive better outcomes for residents and their families, operators and investors.
Covid-19 will only accelerate the push toward a value-based care model, and providers with such systems in place will find it easier to return to pre-pandemic levels in occupancy, lead generation and net operating income (NOI), according to speakers on a webinar on value-based care on Wednesday, hosted by the National Investment Center for Seniors Housing & Care (NIC).
Additionally, having a clinical component on site will reduce man hours lost to readmitting residents to communities after hospital visits or emergency room stays, and allow providers to strengthen relationships between staff and residents.
The webinar highlighted three perspectives on value-based care, with testimonials from an investor, a community leader and an executive of a nonprofit network of continuing care retirement communities (CCRCs). It was moderated by AllyAlign President of Special Needs Plans Amy Kaszak and James Lydiard, Vice President at Strive Health.
Prior to joining Phoenix-based Strive Care last January, Lydiard spent a decade as senior vice president at CareMore Health, which provides health care services to around 180,000 members across the country. Of those, around 7,000 live in long-term care settings – approximately 1,200 communities – and half of those communities qualify as middle-market senior housing.
Lydiard believes that more providers will explore value-based care solutions in a post-pandemic landscape, but many will not know where to start or believe it will take a huge financial commitment to implement. The opposite is true, he said.
Providers can experiment with phased approaches to value-based care, or research partnerships requiring little to no financial investment on the part of the provider. And a growing number of health systems and primary care networks are actively seeking ways to gain a foothold in senior living, which will make it easier for providers to identify a partner.
“This is not a binary decision,” he said. “An all-in-one solution is unrealistic; patients deserve choice.”
Improved staff efficiency
Value-based care generally refers to the principle that providers and payers should be incentivized to drive costs down while keeping health outcomes high. For example, a Medicare Advantage plan might partner with various types of providers to ensure that high-risk beneficiaries — such as older adults residing in senior living communities — have ready access to health services, preventing hospital stays and other costly interventions that can also affect a patient’s health negatively in the long run.
Bringing clinical care services into a senior living community holds many tangible benefits. It can drive better long-term clinical outcomes for residents, which will extend lengths of stay, further stabilize occupancy and drive NOI, particularly during extreme events such as Covid-19.
For larger campuses such as CCRCs, having a care provider in-house gives providers a focal point as residents transition through the care continuum, Lifespire of Virginia President and CEO Jonathan Cook said. The Glen Allen, Virginia-based nonprofit operates four CCRCs in the commonwealth.
Lifespire partnered with AllyAlign to provide care in its campuses, which has helped in assessing declines in acuity and whether residents needed to move forward to higher levels of care, while freeing up frontline staff to tend to the daily business of running the community and building relationships with residents.
Cook estimates that hospital readmissions cost nursing staff an average of five hours of lost time, between preparing documents to send a resident to a hospital or ER, and readmitting them to the community.
“Being able to take that [time], and put those nurses and team members back on the floor to provide more direct care, is a huge win for our clinical teams, [as well as] for our residents not having to go to the hospital,” he said.
Lydiard estimates that some providers may actually lose more time, depending on other factors including the distance between a community and a hospital, and communicating with families on a move to a hospital setting. Having a care provider on-site is a backstop against unnecessary trips to acute care, and gives confidence to residents and their loved ones that the community has their best interests at heart.
Furthermore, residents that undergo lengthy hospital stays risk disruptions in basic care needs such as medication reconciliation and wellness practices.
“It’s nice to give that family and your wellness, med tech, and caregiving teams the option to say, ‘You know what? I’m not going to be tied to this phone for five hours,” he said. “I’m going to be doing all the other things that my other residents need.”
Care providers in smaller communities also become a more integrated component of overall operations, Mountain View Retirement Village Executive Director Tim Nelson said.
The Tucson, Arizona-based assisted living facility partnered with CareMore Health three years ago and has seen significant improvement in hospital readmissions. Mountain View’s hospital readmission rate dropped from 16% before the partnership to 6.2% — a 62% decrease.
A CareMore physician is embedded four to five days a week at Mountain View, and is able to handle basic medical procedures such as IV drips, which providers cannot do under Arizona regulations. Mountain View staff can call CareMore physicians and support staff 24 hours a day, seven days a week to go over medication changes and other emergencies.
The partnership is also a selling point for Mountain View during tours with prospective residents and their families, Nelson said. Sales teams go out of their way to introduce prospects to the care physician.
Kaszak believes this will become more common in a post-pandemic environment, and will be used as a selling point.
“Anything that can quickly highlight that your community offers on-site health care, in addition to hospitality services, is going to give potential residents and family members one more reason to keep you at the top of their list,” she said.
Long-term investor value
Senior housing investors will be attracted to value-based care because it aligns the clinical component of the industry with the financial goals of the owner, Bull Realty Vice President-Senior Housing Shane Connor said.
Providers with clinical partnerships stand a better chance to tap into potential demand and return to pre-pandemic occupancy and NOI levels, because Covid-19 made prospects and their families more aware of the value of health care in a community.
“If a provider can show me their data before others in the market, it’s a pretty strong case for where I’m going to move my mom,” he said.
Having integrated care will improve outcomes of residents, as well as extend lengths of stay for residents as their acuity changes, which will have positive impacts on a community’s financial performance in the form of stabilized occupancy rates. A value-based care partnership also removes the financial burden of care from the provider, as a resident’s acuity declines, because the clinician will be the point person treating the resident.
Finally, a clinical partnership enhances value in the long term for investors, and can dictate hold times, exiting an investment, and bids on communities, because it adds stability to operations. And more investors are asking these questions, Connor said.
“You may be able to command a higher valuation, because this particular community has such a good integrated, value-based model, as compared to a competitor in that market that doesn’t,” he said.
With more primary care networks and ACOs seeking opportunities in the space, providers will not need to assume a substantial amount of risk in finding the right partner moving forward. Lydiard believes that, in a post-pandemic environment, the rewards outweigh the risks — however small.
“Think about value-based care as a trial,” he said. “Test; be curious.”