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.
The NIC Conference opening panel “Underwriting Health Care in Private Pay Seniors Housing” used the story of Mary, a fictional seniors housing resident, to illustrate how the broader health care system is starting to impact seniors housing net operating income (NOI). By increasing length of stay and by providing medical care in a lower-cost setting versus the hospital, 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.
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 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.
Day two of the 2019 NIC Spring Conference launched with the highly anticipated breakfast keynote given by former Speaker of the House, Paul Ryan.
He gave an encouraging perspective on the state of the U.S. economy, listed Congress’ accomplishments of the last few years, and reminded his audience of 1,500 decision-makers in seniors housing & care of the enduring strength of the American system of government – and the American dream. He also was critical of those in Washington, D.C. who employ divisive politics, rather than working together, across the aisle, to seek solutions.
In the following fireside chat with John J. Kelliher, the conversation turned to policy, and what this sector should look for in the coming few years. The two policy experts discussed how Medicare Advantage programs will continue to grow as we move towards a value-based system, and how the immigration system must be reformed, among numerous other topics of interest.
The discussion continued with a follow-up session moderated by Kelliher. Joined by policy experts Chris Jennings and Charlotte Ivancic, Ryan’s remarks were discussed in more detail, with an emphasis on the behind-the-scenes policy discussions that will likely result from the political realities described by the former Speaker.
A full day of educational sessions ranged from traditional discussions on valuations to taking on risk, forging new partnerships, managing workforce issues, underwriting healthcare, and even the first NIC hackathon, which focused on innovating for baby boomers.
Another NIC first was the use of video to replay yesterday’s “Underwriting Healthcare in Private Pay Seniors Housing” session, for the benefit of those who missed it live, or wished to ask questions of some of the original panelists.
In the lunchtime keynote, Futurist Ian Morrison compared health care in the U.S. to single-payor systems in other countries. “We don’t get much more stuff for our health care spending, we just pay much much much more for it,” he said. The average American family cannot afford to pay the annual premiums on the average American health insurance plan. And for many health systems, Medicare and Medicaid pays for 70% of the patients, but private insurance payments generate 70% of the profits.
So how can we fix our broken system? Technology will allow for greater population segmentation. Risk-sharing payment models will incent players to get smarter and more efficient. Data analysis will allow us to focus on the 5% of patients who account for 50% of all spending, and payors will increasingly cover non-traditional services – including housing and other social determinants of health – to keep these “frequent fliers” out of the hospital.
In a follow-on conversation session after his keynote, Morrison continued his comments on the U.S. healthcare system. He pointed out that shared savings plans can be problematic for companies that only offer a single service – for instance, a standalone SNF – because if your great work keeps people healthier longer and consequently generates savings for their hospital, you may not see any value from that work.
What is driving valuations? The session, “Valuation Methodology Revisited: The Impact of Change” covered a wide range of factors: inventory, labor pressures, investor interest in the sector, and the availability of capital. Pricing varies, of course, depending on the asset. The biggest risks going forward, according to the audience poll: competition—both labor and new supply.
Debt financing is readily available. The session, “Real Estate Secured and Cash Flow Lending: Navigating Financing Options to Meet Your Business Need,” covered the basics: HUD, Fannie Mae, Freddie Mac and bank lending programs. Adam Sherman of Live Oak Bank introduced attendees to some options that sometimes get overlooked: SBA and USDA loan programs.
A long-standing debate is whether senior living is a hospitality or healthcare model. But it’s both, said panelists at “It’s Not Room Service, It’s Healthcare…Or Is It? Forging Partnerships in a Value-Based World.” New technology and new building design are bringing together the two concepts. Panelist Maria Nadelstumph, Brandywine Living, said, “We provide beautiful amenities and a lifestyle, but also care. It is the perfect marriage of hospitality and healthcare.”
The standing room only hackathon involved attendees in a high energy brainstorm on creating models for boomers and investors. The fast-paced session included throwable NIC mics, white boards, 2-minute pitches, actual boomer judges, and some truly innovative thinking, both from the three competing teams, and from the attendees themselves.
Those considering taking on healthcare risk gained deep insight through facilitated small group discussions – and the insights of Lynne Katzmann and Anne Tumlinson in the “Path to Healthcare Risk: Do You Have a Decent Roadmap and Proper Footwear?” session.
Panelists in the “Medicaid Managed Care in Seniors Housing and Skilled Nursing: Opportunity or Threat?” session said that Medicaid Managed Care represents a significant opportunity for assisted living companies to generate new revenue on the services they currently offer – but for the same reason it is a significant threat to skilled nursing, as people migrate to lower cost residential settings.
Over the last decade, payors have steadily pushed more and more risk onto providers, and are actively seeking partners in the seniors housing industry who will accept some of that risk. In “Beyond the I-SNP: Future Opportunities for Participation in Value-Based Care” panelists cautioned that you need to prove your value through data and outcomes, to gain a seat at the table.
The last day of the 2019 NIC Spring Conference wrapped up with a networking breakfast, newbie meet-up and four educational breakout sessions.
In the session, “Location Matters: Winners and Losers in Local Markets,” NIC Chief Economist Beth Mace walked through the latest NIC MAP data and analyzed key findings for the seniors housing and care sector, including occupancy rates, local markets, labor, demographics, and much more. Lana Peck introduced the new rate tier report and walkability score data, available now on NIC MAP, then took a deep dive on local market data.
In a follow-up session, NIC Chief Economist Beth Mace analyzed macro-economic conditions impacting the seniors housing market. She highlighted some concerns about the economy which have recently been tempered by a halt in the rise of interest rates. Supply is still outpacing demand, though it is on the upswing and new construction is slowing. “We’ve had significant demand growth,” noted Mace, adding that supply/demand dynamics vary greatly by market.
Strategic up- and downstream networks are critical for survival for post-acute providers, panelists at the Post-Acute Survival Guide session said. Payors and hospital systems use data to select those they invite into their networks, and operators must “lean in” and engage with them for continuous improvement.
The session, “Implications of PDPM for Skilled Nursing” drew an engaged audience of investors and operators eager to understand the ramifications of the new Medicare reimbursement system. PDPM represents a real opportunity for the best SNF operators to weed out weaker competitors along the path to full capitated risk-sharing, said speaker Steven Littlehale of PointRight. But RNs and therapists must be encouraged to “think clinically” rather than just clocking minutes of therapy.
Thank you for attending the 2019 NIC Spring Conference. Mark your calendar and join us next September in Chicago for the 2019 NIC Fall Conference.