It seems as if every year there are a handful of ‘proclaimers’ who dub the coming 12 months as ‘the year’. It’s ‘the year’ for longer hemlines, whiter whites, Keto Diets and the Cubs! Always the Cubs. Yet in the healthcare world, in particularly for those in the long-term care industry, 2019 might actually be THE YEAR when major changes are made to our way of providing extraordinary care to all those we have the honor of serving.
One catalyst to the changes this year is Medicare Advantage (MA). MA plans are a type of health insurance plan that provides coverage within Medicare Part C. These plans pay for managed health care based on a monthly fee per enrollee (capitation), rather than on the basis of billing a fee for each medical service provided (fee-for-service, FFS), which is the way original Medicare Parts A and B work. Most such plans are health maintenance organizations (HMOs) or preferred provider organizations (PPOs). MA plans finance at a minimum the same medical services as “Original” Parts A and B Medicare. Part C plans, including Medicare Advantage plans, also typically finance additional services, including additional health services, and most importantly include an annual out of pocket (OOP) spending limit not included in Parts A and B. For the consumers, this can (but not always does) mean better coverage at reduced prices.
For traditional Skilled Nursing Homes, MAs often mean lower reimbursements. In Q3 2018, SNFs received an average of $515 per patient day from Medicare compared to $427 per day from managed Medicare plans. Clearly the ‘old way of doing things’ needs to change for SNF communities to stay ahead of the game.
National Investment Center for Seniors Housing and Care (NIC) founder and strategic advisor Robert Kramer, during a webinar hosted by Aging Media Network, suggested innovations is the key to future SNF success. Innovative providers can survive, Kramer predicted, by leaning into the industry transformations and opening their business model to changes that leverage the MA environment changes rather than fight against them.
One possible solution, changing the SNFs typical focus of long-term care facilities into standalone medical-surgical facilities that take the place of similar units in referring hospitals. These newly focused short-stay health care facilities will thrive in the growing MA environment.
“There’ll be every effort, as there already has been, through home- and community-based services to empty out nursing home individuals that are only there because there is no other option for them”, stated Kramer. “But having said that, there are going to be complex care individuals for whom it is going to be less expensive to care for them in a well-staffed, well-run nursing home than to bring the care into their home.” The long-term custodial care scenario will never completely go away but, as Kramer predicts, it is entirely likely that SNF says of 10-12 days will be considered lengthy in the not too distant future and that average stays will likely be in the 3-5 day range.
By adjusting the focus of the SNF community, SNF operators and MA plans could partner to develop programs to provide the services normally seen in a hospital setting. These programs, which would require the staffing of highly trained individuals, could then target the acute needs of patients with chronic conditions such as diabetes, COPD and congestive heart failure.
Refocusing, specializing, and targeting future shorter-stay residents may be the change SNFs have been looking for, and quite likely will be the change their future success depends on.