Amid huge structural changes in the healthcare system, population health management is quickly emerging as a way for skilled nursing and assisted living providers to improve the healthcare outcomes of residents and reduce costs.

“Population health management is an exciting trend,” said Mark Parkinson, president and CEO at the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), Washington, D.C., a group that represents long term and post-acute care providers. “Every major provider is developing a strategy around it.”

In order to help providers develop effective strategies, AHCA/NCAL will hold a population health management summit December 9-10 in Washington, D.C. Designed for long term and post-acute care leaders, the Summit will provide a gathering to discuss different population health management models, network with peers, and gain a deeper understanding of the role of the Centers for Medicare & Medicaid Services (CMS).

Population health management is being driven by two major trends that have impacted the assisted living and skilled nursing sector in both negative and positive ways, noted Parkinson. The first trend is the recognition that healthcare outcomes are more important than procedures. Providers should be paid based on value and outcomes rather than the volume of procedures that are performed—a plus for the healthcare system and the patient.

The other trend is the growth of Medicare managed care, or Medicare Advantage insurance plans. About 34% of Medicare eligible adults are now in Medicare Advantage plans, a number expected to continue to grow. This has had a negative impact on skilled nursing providers because payments under Medicare Advantage are less than those under the fee-for-service system. According to the NIC Skilled Nursing Data Initiative, revenue per patient day under Medicare Advantage has fallen from $510 in January 2012 to $432 in June 2019.

Population health management has emerged as a solution, noted Parkinson. Skilled nursing and assisted living providers can become managed care companies and apply to be a Medicare Advantage institutional needs plan, or I-SNP. This is a plan which includes residents who reside, or are expected to reside, in a long term care facility for at least 90 days, or require a nursing facility level of care but reside in assisted living or in their own homes.

But becoming an insurance company is a daunting task, admitted Parkinson. In part, it means taking on the full financial risk of residents’ Part A, Part B, and Part D Medicare benefits and creating a healthcare provider network.

I-SNPs Expand

Sensing an opportunity, a growing number of providers are introducing their own I-SNPs or figuring out ways to partner with other providers. In 2019, there are 62 provider-led special needs plans across the country, a number that Parkinson figures will double in the next five years.

Last January, AHCA/NCAL launched the Population Health Management Council to represent members that own Medicare Advantage plans, mostly I-SNPs. All 24 AHCA/NCAL member-owned plans are represented on the Council which advocates at CMS, develops strategies and shares best practices.

Parkinson attributes the growth of I-SNPs to the fact that the plans create a funding stream for innovation to keep residents healthy. Under the I-SNP arrangement, skilled nursing providers are paid a per member, per month payment (PMPM) to take care of the medical needs of a resident.

Eighty-five percent of the payment must be used for health care services. Fifteen percent is reserved for administrative expenses such as payment of claims, enrollment, sales, marketing, and profit. If the plan keeps members healthy through additional wellness services and/or reducing avoidable hospital admissions it can keep the savings it creates after all administrative and medical expenses are paid.

One example of the innovation that comes with owning a health plan is the application of an enhanced primary care team. Nurse practitioners are employed to see plan members and ensure they are receiving the right care, at the right time, in the right setting.

Typically a Medicare beneficiary has to spend three midnights as an inpatient in the hospital to access their Medicare benefit and begin receiving skilled nursing services. Providers that own a plan can choose to waive the three-day prerequisite.

This allows a nurse practitioner to “turn on” the Medicare benefit when a change in condition that requires skilled care is noted without the member/resident ever leaving the facility. In this scenario, an avoidable inpatient stay and corresponding expense is averted and the member/resident receives the treatment they need without the trauma of being transported to the emergency department and being admitted to the hospital.

“It’s a win-win,” said Parkinson. “Residents are healthier and providers take control.”

Early results are encouraging. A recent study showed that I-SNP members had 38% fewer hospitalizations than other Medicare beneficiaries, 51% lower emergency department use, and 45% fewer readmissions. Also, the rate of skilled nursing facility usage was 112% higher.

“The clinical outcomes are astonishing,” said Parkinson.

There are different ways to approach the provider-led I-SNP opportunity, he noted. Big providers have started their own insurance plans, while smaller providers are partnering with each other and with administrative firms that help set up the plans.

Parkinson hopes the upcoming Summit will offer something for everyone, those just getting started and those with an existing plan looking to succeed. “We will cover the spectrum of options,” he said.

The Summit will feature speakers from CMS to provide its perspective, and providers that have created plans to discuss the pitfalls and pluses. “It’s an opportunity to learn and hear about the latest best practices,” said Parkinson.

The Population Health Management Summit for Long Term and Post-Acute Care Leaders will be held December 9-10, 2019, at the InterContinental, Washington, D.C., The Wharf. For details and to register visit PHM.ahcancal.org.

Workforce recruiting and retention efforts in the seniors housing and care sector are particularly challenging today. During a panel discussion at the 2019 NIC Fall Conference, representatives from leading operating companies shared their strategies for attracting and retaining top talent.

Moderating the discussion, Jacquelyn Kung, CEO, Activated Insights, noted that “Better workplaces lead to better performance.” She opened with examples of companies in other industries that have succeeded financially by focusing on workplace culture, including Southwest Airlines and Hilton Hotels. Hilton tops the Forbes 100 best companies list currently—a list compiled by the Great Place to Work® Institute—and has seen tremendous growth in stock price over the past five years.

Great Place to Work began an initiative in the senior care industry two years ago, and this year surveyed almost a quarter million employees at more than 3,000 locations. Kung highlighted survey findings showing lower employee turnover in companies with higher trust index scores. She noted the data showed higher occupancy rates and higher charge rates in those companies as well.

The panelists shared moments of inspiration from their careers and how those experiences impact their work with their own employees. Common among the stories was the timing; all had experienced moments of inspiration very early in their careers. Kung noted that almost half of workers in senior care are very young adults and the importance of creating moments of impact to inspire the young workers to remain in the industry.

Audience members then submitted questions around staffing challenges for insights from the three panelists: Tom Grape, founder, chairman & CEO at Benchmark Senior Living, Manny Ocasio, chief human resources and compliance officer at Asbury Communities, and Ahkira McPherson, RN, staff development manager at Vi Lakeside Village.

When asked whether the industry’s biggest issue is recruiting, retention, or engagement, panelists all agreed that the three are equally important and intertwined. From Ocasio’s perspective, engagement allows you to attract more staff, “If you focus on engaging, you’ll get results on both retention and recruitment.”

Next, the panelists shared ideas on how to show return on investment (ROI) for workforce strategies. Tom Grape from Benchmark noted that culture can be an amorphous concept, and the ongoing pressure on wages and benefits in today’s hiring environment is tricky. But, data like that collected by Great Place to Work offer a compelling place to start. Ocasio added that some initiatives at Asbury have demonstrated measurable reductions in turnover, and that can directly affect the bottom line: “It costs about 1.1 times the salary per year of every nurse that you turn over.”

The discussion then turned to staff training. McPherson shared that Vi places a priority on management and staff development programs, and support from the top down. “From our corporate office, we have ongoing support down to our managers. And then we filter that down to the other stakeholders within the company and to the other employees.” The three panelists shared that training in their companies is primarily handled internally, with managers coaching staff directly. “Every manager has been trained in both being receptive to feedback and in being able to provide feedback that’s meaningful,” noted Ocasio.

When asked about hiring practices, Grape shared Benchmark’s success in reducing staff turnover through use of a predictive analytics tool, Arena, during the application process. He also noted the enthusiasm generated by the 3-day onboarding orientation program in Benchmark headquarters for new department heads and above. Ocasio talked about the use of behavioral interviewing in Asbury’s hiring process and the in-house culture program that helps tie behaviors to the organization’s values. McPherson noted that Vi recruits students and veterans, and offers apprenticeship and mentorship programs, “We are adamant about developing our own employees and promoting from within through leadership programs.”

Having advanced through the leadership programs at Vi herself, McPherson understands the importance of communication and connecting with staff at all levels, “Every day I’m encouraging someone.” Ocasio noted Asbury’s results in developing an app to improve communications with staff, and the nearly doubled message open rates versus email, “It’s really changed the way we communicate.”

Kung then asked the panelists about what she called “the elephant in the room:” workforce pay. Ocasio described Asbury’s living wage strategy, “Nobody makes less than what in their particular jurisdiction would be a living wage.” Grape noted Benchmark’s competitive market studies, recognizing that they are competing for workers with not just other senior living providers but with other local employers. Kung highlighted the importance of drilling down market studies to the local level, “The metro area is really important.”

“I would say you can pay better wages and have lower costs of labor,” said Ocasio, noting that higher wages reduce turnover.

An audio recording of the entire panel discussion is available to conference attendees on the conference recap page on NIC.org.

The Labor Department reported that there were 136,000 jobs added in September, below the consensus estimate of 145,000. For the nine months through September, the average monthly increase in total employment has been 161,000, below the average monthly gain of 223,000 in 2018 (note that this will likely be revised down based on the recent preliminary benchmark revision estimate). Health care added 39,000 jobs, in line with its average monthly gain over the past 12 months.

Revisions added 45,000 to the prior two months. The change in total nonfarm payroll employment for July was revised up by 7,000 from 159,000 to 166,000 and the change for August was revised up by 38,000 from 130,000 to 168,000. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

The September jobs report is important to the Federal Reserve and analysts because it is the first major piece of data for the fourth quarter. While not entirely consistent, data through the third quarter suggest that both the global and national economies are slowing. Indeed, the U.S. manufacturing sector is weakening as evidenced by a contraction for the second consecutive month in September in U.S. factory activity to its lowest level since June 2009. Expectations for GDP growth in the fourth quarter have also slipped to less than 2%. Global trade is slowing, and business investment is weakening due to mounting concerns about trade-related weakness associated with rising tariffs and geopolitical strife around the world. In fact, the Fed lowered interest rates on July 31st for the first time since 2008 and then again at its September 18th FOMC meeting as it reacted preemptively to concerns of a potential economic slowdown. The fed funds rate is now targeted at a range of 1.75% to 2.00%, down 25 basis points from its prior target range. Until July and since late 2015, the Federal Reserve had been gradually raising rates following six years of virtually 0% interest rates (2009 through 2015).

The August unemployment rate fell 0.2 percentage points to 3.5%. The last time the rate was this low was 50 years ago in December 1969. A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—fell to 6.9% from 7.2%.

Average hourly earnings for all employees on private nonfarm payrolls fell in September by one cent to $28.09. Over the past 12 months, average hourly earnings have increased by 2.9%, but this marked a 14-month low. For 2018, the year over year pace was 3.0% and in 2017 it was 2.6%.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work was unchanged at 63.2% in September, very low but up from its cyclical low of 62.3% in 2015. The low rate at least partially reflecting the effects of an aging population.

Life expectancy rates over the past century have nearly doubled. And as Terry Fulmer, president of The John A. Hartford Foundation, sees it, increased longevity is the greatest success story of the 20th century.  

Speaking to an audience of seniors housing and care leaders gathered for NIC Talks at the 2019 NIC Fall Conference last month, she said “Here’s your moment, your inflection point, your opportunity to think about how we celebrate this wonderful success and take a look at how we can maximize these additional years in life.”  

Fulmer believes with this extended lifespan comes a call for age-friendly health systems that adapt to the needs of the older population. Age-friendly health systems celebrate and maximize longevity, provide the best care, offer greater customer satisfaction, and at a more reasonable cost, she noted.  

The World Health Organization (WHO) launched an “age friendly cities” initiative in 2006 to, among other things, bring focus to ways cities could become more accommodating to older adults and their families. AARP then brought focus to age friendly communities, described as those that are inclusive and considerate of the perspectives of all residents, of all ages and all persuasions.  

Without age friendly health care systems in those communities, Fulmer noted, older adults may not be fully served. “You’re not an age friendly community if you can’t get someone the care they need, the way they want it, in the time that it should be delivered,” said Dr. Fulmer.  

She then presented the 4Ms framework health care providers can use to inform their work with older patients.  

Developed in partnership with the Institute for Healthcare Improvement (IHI), the 4Ms framework was based on research into “the 70+ care models that we know, based on science, improved care for older adults,” said Fulmer.  

The research resulted in identification of four elements of senior health they labeled the 4Ms: What Matters, Mobility, Mentation, and Medication. According to Fulmer, these four elements need to be working, and in balance, for the older adult’s health to be working, “Any one of those off kilter will set the others into a cascade of problems.”  

What Matters 

“Healthcare providers should be asking ‘What matters to you?’ instead of ‘What’s the matter with you?’,” said Fulmer. This, she said, will fundamentally change the clinical encounter. It allows care providers to focus on patients as individuals, thinking about their wants and needs, for more personal care. 

Medication  

Older adults typically take several medications, often prescribed by different doctors with inconsistent monitoring across the health care system. According to Fulmer, “about 80% of people in a given year have some sort of adverse drug effect, and that’s a problem.” Age friendly health care requires a better way to monitor a patient’s medications, both what is prescribed and what is taken. 

Mentation 

Despite common misperception, depression is not a normal part of aging, noted Fulmer. When evaluating older patients’ mental acuity, care providers should consider other causes that could contribute to an apparent decline in cognition. Is the patient’s medication causing cognitive changes, for example, or perhaps he isn’t wearing his hearing aids consistently? 

Mobility 

“Mobility is one of the things people want most in their life, and is so essential to our sense of wellbeing,” said Fulmer. Beyond preventing falls, age friendly health systems should work to enhance mobility. 

Fulmer and her team have partnered with the American Hospital Association (AHA) and the Catholic Health Association of the United States (CHA) to implement the 4M model. Their goal is to hit 20% of health systems by 2020.  

“But,” said Fulmer, “do not think of this as just a hospital problem. This is all of us— continuity of care across settings.” She challenged the audience to consider what they will do differently in their age friendly work tomorrow.  

To watch a replay of Dr. Fulmer’s 2019 NIC Talk, visit NIC.org.   

1. Occupancy decreased from first quarter, up from year-earlier levels.

2. Medicaid revenue mix over 50%, Managed Medicare revenue mix down from first quarter.

NIC released its second quarter 2019 Skilled Nursing Data Report two weeks ago, which includes key monthly data points from January 2012 through June 2019.

Here are some key takeaways from the report:

• Skilled nursing occupancy decreased 52 basis points to 83.3% in the second quarter of 2019 from the first quarter. However, occupancy was up 48 basis points from year-earlier levels, reflecting the stabilization pattern that has been evident over the past year. Since March 2018, occupancy has fluctuated about one percentage point. A quarterly decline is not unexpected as occupancy usually decreases from March to June due to seasonality. The decrease could be related to flu season coming to an end in the second quarter. The second quarter drop in occupancy was not evident in all geographic areas as occupancy increased slightly in rural areas, while urban areas experienced a decline.

• Quality mix decreased 66 basis points to a near seven-year low of 33.5% in the second quarter and was down 57 basis points from year-earlier levels. Quality mix fell due to declines in both private pay patient day mix and Medicare patient day mix. However, the main driver of the decrease in quality mix has been the decline in Medicare patient day mix, which fell 72 basis points quarter-over-quarter and now stands at a time-series low of 11.5%. Medicare patient day mix has fallen 525 basis points since January 2012. The quality mix trends vary when comparing geographic areas as rural areas saw an increase in the second quarter 2019, while urban areas decreased.
• Medicaid revenue per patient day (RPPD) increased from the first quarter to end the second quarter of 2019 at $215. It was up $6, or 2.7%, compared to a year ago when the RPPD was $209. Medicaid continues to be the fastest growing payor in terms of RPPD on a year-over-year basis, but the concern continues to be that Medicaid RPPD may not cover the cost of care for residents in some states. The growth in Medicaid RPPD is evident in both urban and rural areas as it increased on both a quarterly and yearly basis in both geographies. It ended the second quarter 2019 at $219 in urban areas and $198 in rural areas. Meanwhile, Medicaid revenue mix ended the second quarter 2019 at 50.4% which underscores the importance of following the Medicaid RPPD trend.

• Managed Medicare revenue mix decreased 218 basis points from the first quarter to the second quarter 2019 ending at 10.3%. It was relatively flat from year ago levels. The decrease in overall occupancy along with only a small decrease in managed Medicare patient day mix in the second quarter suggests that the decrease in revenue mix is likely due to RPPD pressure and patient admissions. Managed Medicare RPPD decreased on a quarterly and yearly basis to end the quarter at $432. Managed Medicare RPPD is down $78 since January 2012. The revenue mix trend differed between geographic areas as urban areas drove the overall quarterly trend, declining 231 basis points to end the second quarter 2019 at 12.1%. Rural area revenue mix was flat at 5.2% for managed Medicare.

To get more trends from the latest data you can download the NIC Skilled Nursing Data Report here. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form here. NIC maintains strict confidentiality of all data it receives.