As property construction increasingly impacts more markets amid a rapidly changing health care payment and delivery model, the seniors housing and care industry is evolving and charting new territories. The 2016 Spring Investment Forum addressed a wide range of issues—from the market’s challenge to absorb the growing number of new units coming online to the impact of the rapidly evolving health care payment and delivery model for seniors. Featured speakers included:
- Dan Mendelson, CEO & Founder of Avalere Health shared his perspective on how the changing health care reimbursement and delivery model and access to data are driving changes in all aspects of seniors housing and care
- Richard Fisher, former president of the Federal Reserve Board of Dallas discussed what’s happening in the economy and what changes could mean for the availability and cost of capital
- Volunteer leaders of the industry’s major trade groups—Argentum, AHCA, ASHA, and LeadingAge—spoke about what they are doing within their own companies and their associations to prepare for the changes being driven both by a new and more demanding consumer and by the new health care delivery model for seniors.
Take a look at what was discussed on each day of the conference.
NIC Spring Investment Forum—DAY 1
Teeing Off with Connections, Construction, and Care Coordination
The 2016 NIC Spring Investment Forum kicked off Wednesday, welcoming over 1,450 attendees to Dallas.
Connecting Capital Seekers and Capital Providers
Returning for a second year, Capital Connections was held on Wednesday afternoon. This NIC-facilitated networking opportunity connected capital seekers with select capital providers.
This year’s Capital Connections had a golf theme, and advisors were on hand to act as “caddies” who assisted capital seekers in determining which of the capital providers had offerings that best suited their needs. Capital Connections was well attended, with representatives from over 40 capital providers educating and connecting with the capital seekers in attendance.
Participating in a Care Coordination Model
The Forum’s educational programming started in the afternoon. “There’s a lot of work to do in the industry,” said moderator Brian Fuller in his introductory remarks for the “Participating in a Care Coordination Model” session. While CMS is pushing for increasing participation in value-based care from the traditional fee-for-service model, hospitals are preparing for the transition but are far from full rollout. Panelists spoke about value-based care and what SNFs need to think about as they move forward.
There are three top priorities for creating preferred provider networks, said Tom Coble, president of Elmbrook Management Company. First is using electronic health records (EHR) for interoperability with hospitals and for evaluating the SNF’s own performance. Second is adding nurse practitioners in buildings to make the care coordination process easier. Finally, SNF providers should consider extending their business model into services such as home care, hospice care, and Medicare Advantage plans.
In terms of innovative approaches to care coordination models, Geoff Teed, principal of Paradigm Provider Partners, emphasized focusing on what produces the best outcomes for patients. The best approach, he said, “is low tech and high touch.”
Looking to the future, Dr. Ken Kaminski, a total joint surgeon with Azalea Orthopedics, speculated that physician-owned assisted living facilities are a possibility. As physicians hold greater responsibility for patient outcomes, owning these facilities would be a good way for physicians to control care throughout the patient’s recovery.
Show Me the Data: Technology in an Outcomes-Based Industry
Providers face both opportunities and challenges as technology becomes vital to operational success in the seniors housing care industry, according to a panel of experts who discussed the role of technology in their organizations in the “Show Me the Data” session.
Panel moderator Andy Edeburn provided context by defining the four trends underlying the technology push: industry consolidation; payment for outcomes; market disruptions; and a focus on post-acute care where a large proportion of spending occurs. “Providers have to prove ‘quality’,” said Edeburn, vice president, GE Heatlhcare Camden Group.
Speaking as an assisted living operator, Lynne Katzmann, noted the importance of collecting quality data, including measures such as hospitalizations and length of stay. “We are pioneering a new model,” said Katzmann, president and CEO of Juniper Communities. Called “Connect for Life,” the initiative is a high-tech high-touch approach that integrates data with real time services. If a resident falls, for example, an alert generates an evaluation. And therapy can start the next day. “We have the ability to communicate right away with real time data,” she said.
Hospitals are changing how they view skilled nursing operators, notes Daniel Hirschfeld, president, Genesis Rehabilitation Services. Hospitals realize the role skilled nursing plays in reducing costs and improving outcomes. But, “We need more data,” he emphasized, adding that data will be crucial as the system evolves to risk-based sharing.
The transformation of the health care system from a fee-for-service to preventative system represents a big opportunity to create a better quality of life for seniors, noted panelist Arnold Whitman, chairman, Formation Capital. “The only way to get there is through analytics and data.”
NIC Spring Investment Forum—DAY 2
Major Themes Start Emerging
Partnerships, data, risk, and quality . . . these are the primary takeaways emerging at the 2016 NIC Spring Investment Forum, said NIC CEO Robert Kramer during the Opening General Session on Thursday.
Facing a rapidly changing health care landscape, seniors housing and care providers are positioned to play a vital role in the post-acute environment. “We all respond to financial incentives and that’s where the change is happening,” said Dan Mendelson, CEO and founder of Avalere Health, at the opening general session of the Forum. He outlined how the changing payments and managed care systems are impacting long-term, post-acute and assisted living providers, and detailed a series of practical ideas for success. A panel of industry executives then joined the discussion, identifying the “building blocks of happiness” that not only create a high quality of life, but also serve as the basis of the health outcomes sought by health care payers. Panelists agreed that the future of the industry under the new health care model revolve around the Forum’s key takeaways: partnering, data, risk and quality. “We have the ability to grow and participate in health care plans,” said panelist James Thompson, senior director, Synovus Bank.
Quality was top of mind in a panel discussion about how the industry is using technology to improve quality. What’s important to remember, said Katy Fike, co-founder of Aging2.0, is not technology itself but what problems can be solved with technology as part of the solution. “Technology is not just a really cool gadget,” said panelist Lori Alford, COO of Avanti Senior Living. Increasingly seniors, their adult children, and their care providers know how to use technology and expect it in senior living properties. But piloting on a small scale and in a stable environment is crucial, said Jeremy Ragsdale, CEO of Thrive Senior Living. It’s easy to get sidetracked by the “shiny objects” that look great but won’t produce the outcomes you’re looking for, he said. Kari Olson, chief innovation and technology officer for Front Porch, told attendees to account for training and support. But ultimately, she said, what’s key is putting “technology in the hands of seniors to help them live well.”
Technology also was the focus of another afternoon concurrent session. Stephen Johnston of Aging2.0 moderated a panel of leaders from four startups whose products are supporting the transition from reactive to proactive care. To be proactive, Johnston said, a product must be customer-centric, connected, continuous, and coordinated. MedZed provides virtual house calls, where care providers bring analytical tools that give doctors insight into the living environment and assist in examinations of patients who are unwilling to go to the doctor. Sensassure is an incontinence technology that helps improve quality of life and reduces unnecessary work for care providers by providing a sensor that detects when the patient is wet. CarePredict is a wearable device that detects movement of the dominant arm and tracks activities of daily life in order to reduce or replace less reliable human observation. And finally, Caremerge is a cloud-based platform that breaks down silos by providing a communication channel across the various systems throughout the care continuum.
Data took center stage in the “Valuations in Today’s Seniors Housing & Care Market” session. As property valuations level out, a panel of experts at the Forum provided observations and predictions about the seniors housing and care property market for the remainder of the year. They agreed that valuations have already peaked, though they expect continued robust sales activity primarily due to the entrance of new investors in the market. Buyers prefer properties in locations with high barriers to entry, in particular locations with long municipal approval timelines. The biggest risk factors are the cost of funds, labor cost, and oversupply of product. Another risk is the lack of experienced executive directors. An audience poll taken at the session showed that attendees expect cap rates to remain level or rise. No one expected cap rates to decline.
Richard Fisher gave a frank, yet entertaining, talk on the global economy during Thursday’s Conference Luncheon Session. The constant chatter about China, he said, is a distraction from other global economic news. Overall, the world’s second largest economy should not be the concern the media makes it out to be. China’s goal going forward is to transition from producing output, which traditionally has been its aim, to achieving operational efficiency. Moving a little closer to home, Fisher said that the powerhouse of Mexico, the U.S., and Canada makes North America “the epicenter of economic growth.” He told attendees that he was pleased with the state of the U.S. economy, saying we are “on the verge of becoming Secretariat at Belmont,” who went on to win by over 30 lengths.
In a panel discussion following Richard Fisher’s comments, moderator Beth Mace, NIC’s chief economist, led a discussion with Kevin and Peter on current economic trends and how they affect seniors housing and care. Kevin agreed with Fisher that the “disruptions we have today are important to analyze.” He predicts that a rise in interest rates is more likely than further decreases in the coming months. On the general outlook for the economy, Peter said Fisher’s positive predictions for economic growth were more demonstrative than recent data has been showing, and that he was left with “more hope that the economy is okay.” Mace pointed out that the economy is bifurcated right now, with consumers benefiting from job growth and low gas prices, while manufacturing is weak because of the strong dollar.
Reducing costs, decreasing average length of stay, and lowering the risk of hospital readmissions are aims of many in the industry. In the “Synergistic Partnering” concurrent session, moderator Torey Riso led a discussion of one partnership that is achieving these goals. Interlude Restorative Suites is a collaboration between Allina Health, Benedictine Health System, and Presbyterian Homes & Services to provide a full continuum of care, from hospital care, in-patient rehab, and transitional care. This collaboration has experienced a high rate of patient satisfaction, and others are beginning to replicate the model. But there have been some challenges and lessons learned along the way. Rocky Chapin of Benedictine Health System said that “creating a single brand with three partners is hard work.” While the branding is the same, slight nuances have emerged between the three partners. Dan Lindh of Presbyterian Homes & Services cited the importance of establishing a firm, fully detailed blueprint that is “ready to be implemented, not reimagined.” A standardized onboarding plan is also necessary in an environment where “staff retention is so important,” added Dr. Penny Wheeler of Allina Health. But overall, they’ve seen success. “The joy of this partnership,” said Chapin, “is that it’s always green” in terms of the quality dashboard measures.
As managed care and a shift in payments criteria filter through the health care system, seniors housing and care providers are faced with a complex array of changes just now beginning to impact the bottom line. A panel of providers gave their perspective on how they are adjusting to the new landscape. Measuring quality is among the top priorities since partners, such as hospitals and physician groups, expect providers to be able to “prove” quality with data. “Quality as it relates to payers is huge,” said panelist Ed Kenny, chairman and CEO at Life Care Services. Panelists agreed that care coordination will be part of their services—a fact the industry should accept. Providers worry, however, that consumers and professional referral sources could become confused about the changing role of seniors housing and care. “We have a lot of opportunity,” said Stephanie Handelson, president and COO, Benchmark Senior Living. “It’s a new world.”
Researchers presented their findings on the evolving role of assisted living in the new health care delivery model at the Forum. David Grabowski, Ph.D., cited statistics that show assisted living residents have health profiles similar to those of skilled nursing residents. As a result, he expects payers to give increased attention to assisted living. He noted that care integration will involve more regulation and innovation, though progress will be slow. Grabowski also expects bifurcation of the sector as some operators adopt a more medical model while others maintain their hospitality focus. Dr. Kevin O’Neil, chief medical officer, Brookdale Senior Living, discussed the results of the company’s CMS Challenge Grant. In short, a care transitions program improves outcomes. Where should assisted living operators start? Create an IT infrastructure to collect and manage data, and start forming relationships with hospital systems and physicians groups. “Leadership and a sense of urgency are needed,” O’Neil said.
Seniors housing operators and skilled nursing operators will have to partner with each other under the demands of the new health care landscape. Panelists in the “Coordinating and Collaborating Care” session discussed how these one-time competitors are beginning to work together. “If we discharge our patients to assisted living, we want a provider who knows what we need,” said Daniel Hirschfeld, president, Genesis Rehabilitation Services. He emphasized that his service assumes the risk of the patient for 90 days and he expects partners to be able to provide follow-up care. Panelist David Stordy of Mainstreet explored the expanding arena of stand-alone rehabilitation facilities. The company’s new physical plants encourage sleeping, eating, moving, and healing. Lynne Katzmann, of Juniper Communities, noted that assisted living is already part of the post-acute continuum. “We have older people with chronic conditions,” she said. But, she admitted, it will take time to educate the marketplace about the changing role of assisted living.
NIC Spring Investment Forum—DAY 3
Timing the Wave
As the 2016 NIC Spring Investment Forum wrapped up on Friday, discussions revolved around the coming challenges and opportunities for seniors housing and care.
The growth of managed care organizations (MCOs) “has been the biggest change that I’ve ever seen in the industry,” said Joshua Kauffman, CEO of Boardwalk West and moderator of “The ‘New Normal’ of MCOs in Long Term Care” session on Friday at the 2016 NIC Spring Investment Forum. As managed care grows rapidly, the days of using perks to influence doctors to send patients to specific SNFs are over. “What now matters,” said panelist Mark A. Johnson of Hooper, Lundy, Bookman P.C., “is if you provide good care.” But when working with MCOs, warned Susie Mix, president and CEO of Mix Solutions, Inc., it pays to watch out for red flags in contracting and operationalizing, or “you’re not going to get paid for a patient.”
Traditional real estate investors and lenders are recognizing that housing is a platform for solutions to take care of frail seniors. That was the big takeaway from the session on how capital providers view the care continuum. “We need more coordination of health care in senior living buildings,” said panel moderator Anne Tumlinson, an industry consultant. Panelists agreed that the operator is key to investment success. In short, investors seek operators that center on the resident/patient. Underwriting of seniors housing now also involves taking a critical look at ancillary revenue streams, such as home health services, which generate a lot of cash flow. “We are transitioning from a real estate industry to a business industry with a real estate component,” said Zach Bowyer, managing director, CBRE.
One of the highlights of the 2016 NIC Spring Investment Forum was the Closing General Session. Facing an evolving seniors health care model, industry leaders convened to discuss the changing role of the industry. ”What models will prevail?” asked NIC CEO Bob Kramer. He was joined on the panel by the leaders of the sector’s major trade groups: Brenda Bacon of Argentum; Larry Cohen of ASHA; Tom Coble of AHCA; and Kathryn Roberts of LeadingAge.
Acknowledging a fair amount of uncertainty, panelists agreed that it was crucial to measure quality and create consistent measures. But they worry that assisted living could become a medical model that consumers have sought to avoid. Within their associations, each is looking toward the future, with LeadingAge seeking to change the funding model for long term care by running scenarios of seven alternatives. AHSA is working on several initiatives to increase penetration rates and improve the perception of senior living by elders and their families. There’s a focus on workforce development at Argentum, as well as moving toward self-regulation to avoid some regulatory restraints seen in skilled nursing. And at AHCA, quality, new payment models, and member education are top priorities.