The 2019 NIC Spring Conference is Underway
Focused on the theme, “Investing in Seniors Housing & Healthcare Collaboration, the 2019 NIC Spring Conference kicked off on Wednesday afternoon. The Conference drew more than 1,500 attendees, including investors, seniors housing and care operators, and healthcare providers.
A reception was held for first time attendees. “Our company has six projects coming out of the ground,” said first time attendee Gary Elam of Carefield Living. “We are here to find capital.”
The afternoon included three well-attended educational sessions.
Meet Mary. She’s 86 years old, with arthritis, osteoporosis, hypertension, and COPD. Her story gave the NIC Conference opening panel “Underwriting Health Care in Private Pay Seniors Housing” a platform to illustrate how the broader health care system is starting to impact seniors housing net operating income (NOI).
Mary’s care cost Medicare over $60,000 during her time in assisted living. Seniors housing operators on the panel described how their staff traditionally handled medical episodes, cooperating with medical professionals but receiving no financial consideration for the care they provided (other than standard monthly care charges).
The panel then fast-forwarded five years, playing out the same scenario in a community offering a Medicare Advantage plan. As a member of this plan, Mary stays healthier longer, so pays less in monthly care charges. But Mary increases her length of stay, and by providing medical services in a lower-cost setting compared to the emergency room, the company is able to keep an average of $500 per month in “gain sharing” – receiving some of the money Medicare might have had to spend on hospital care, but didn’t. Overall, the community realized a 20% increase in net operating income with Mary participating in the medical services revenue model.
How realistic is this? John Rijos of Chicago Pacific Founders, and Chris Winkle of Sunrise Senior Living, shared their real-world experience with Medicare Advantage plans, and said it is very realistic. Jerry Taylor, of Solera, had not yet implemented a MA plan, but agreed with the concepts. And all panelists agreed that communities risk being “disrupted out of the business” if they’re not on board. 86-year-old Mary has a typical profile, but her experience, and that of her eldest daughter, Sue, changes with coordinated care. Using two scenarios, one from today and one from 2025, the panel, moderated by Joel Mendes of JLL, got specific and detailed in order to illustrate key points that investors should be considering as the healthcare system increasingly influences how communities operate – and perform financially. Coordination of care will make a big difference for Mary, but it will also drive new revenue streams and improve NOI.
In “Equity in Senior Care: Understanding the Players” NIC injected some levity with a “Dating Game” format, complete with the famous game show’s theme music and a healthy dose of tongue-in-cheek dating references. Underlying the fun, however, was real insight into how capital seekers and providers find a match in the real world. In two different “games” two very different capital seekers asked tough questions of three potential suitors, eventually choosing a partner, but not before attendees made their wishes known with an instant poll.
The session yielded some fun moments, too, such as when John Stasinos, in the role of an investment management platform, said of a rival suitor (a private equity firm), “she’s gonna want to buy you and change you. I’m different because I’ll understand you. You’ll be comfortable with me. I won’t bring an investor to the table that doesn’t share your time horizon.” The session delved into numerous considerations, and many good questions that capital seekers should ask, before they commit to a new relationship.
The last session of the day, “I-SNPs: Why Providers are Becoming Payors in a Value-Based World” addressed the question: Is setting up a Medicare Advantage plan for residents the right strategy for your company? A panel of experts, already involved in that process, discussed I-SNPs, or Institutional Special Needs Plans. These programs provide Medicare coverage for residents of long-term care facilities.
“The process is complicated,” noted panelist Steve Fogg, CFO at Marquis Companies, a provider based in the Portland, Oregon, area. Marquis already has 500 long-term care residents in its program, not all of whom live in Marquis buildings. Panelist Lynne Katzmann, CEO of Juniper Companies is putting together a plan for assisted living residents that will be rolled out next year. Peter Longo, principal & managing partner, Cantex Continuing Care Network, commented: “Find a good insurance partner. That’s key to success. “
The 2019 NIC Spring Conference is just getting warmed up. Tomorrow will feature remarks from Paul Ryan, the 54th Speaker of the United States House of Representatives (2015-2019), and a full schedule of educational sessions. Follow NIC on Twitter for live-tweets of every session, and more.