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Facing Uncertainty, Looking to Opportunity

Jerry Doctrow Previews Session with Public Operator CEOs

As featured in the August NIC Insider Newsletter

Post-acute care is an industry in flux. While it takes in $59 billion each year in Medicare payments alone, payments are declining, and providers in the space are feeling pressure on their operating profits.

“It’s a big business,” said Jerry Doctrow, principal at Robust Retirement®, LLC, “but it’s struggling.”

The post-acute care strategies four leading public operators are employing will be discussed at “Somewhere Over the Rainbow: Where Winning Post-Acute Strategies Attract Investors,” a session Doctrow will moderate at the 2016 NIC Fall Conference next month. It’s a session, he said, that post-acute and traditional private-pay seniors housing providers alike should not miss.


On the post-acute side, providers are facing reduced volumes, reduced lengths of stay, and lower revenues primarily as a result of the transition to Medicare managed care and other initiatives designed to control costs. At the same time, the transition from fee-for-service to a bundled payment system has produced a lot of uncertainty. “Nobody quite knows how that’s going to play out,” said Doctrow.

These are issues most private-pay seniors housing operators typically have not concerned themselves with in the past, but that’s changing, Doctrow indicated. Assisted living as well as post-acute most likely will see an increase in short-stay clients from what he calls “younger seniors”: the 65- to 75-year-olds beginning to develop hip, knee, and cardiac issues. Over the next 5 to 10 years, Doctrow predicts this population will grow significantly, thanks to the baby boomers. Clients will not be old enough to move into seniors housing, he explained, but will be “increasingly users of both acute and post-acute services.”

Operators are recognizing the growing opportunity by serving short-stay patients, either by offering post-acute services or bringing in other providers to provide them. The session’s panel consists of four CEOs of “major, sophisticated” public operating companies that brought in $4.6 billion collectively in the second quarter, Doctrow said. The CEOs are: Benjamin Breier of Kindred Healthcare; Larry Cohen of Capital Senior Living Corporation; George V. Hager, Jr. of Genesis HealthCare; and Andy Smith of Brookdale Senior Living. The panelists will share their companies’ diverse strategies for addressing the changing reimbursement environment and senior population.

Ultimately, Doctrow said, attendees on both sides of the industry—private-pay seniors housing and post-acute care—should leave the session understanding the issues, the range of strategies, and the right strategy for their organization.

And it’s a session that capital providers will want to take part in, too. Doctrow said that in the past, there have been “pivot points” of great change in seniors housing and care, where those who had positioned themselves well experienced financial success. He believes the industry is reaching another pivot point in post-acute care.

“Everything looks very negative and uncertain,” he said. ”But you’ve got underlying demographics that look very strong, and it’s a great opportunity financially to invest.”

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