When Considering a Specialty, Providers Need to Think Big and Small

As the incentive for operators to take on residents with more complex health issues grows, major skilled nursing players see a path forward in boosting their clinical capabilities.

Custodial long-term care is on the way out, Sabra Health Care REIT (Nasdaq: SBRA) CEO Rick Matros said last year at a major industry conference. Meanwhile, skilled nursing provider The Ensign Group (Nasdaq: ENSG) has seen success in keeping therapy in-house and maintaining ancillary services that allow its buildings to take on higher-acuity patients.

But there’s more to specialization than adding new equipment and more to boosting clinical capabilities than adding new technology, according to Marc Zimmet, managing director at Greystone and Zimmet Healthcare.


“When it comes down to the question of thinking about moving into higher acuity, why [is the provider] doing it?” he told Skilled Nursing News. “The stakes are so high that it’s really got to be thought through.”

The first hurdle is always the staffing and nursing costs related to adding a specialty or boosting clinical capability, he explained. After that, the variable costs, such as those of equipment and pharmaceuticals, have to be considered.

There’s also the costs associated with the patients — the current Resource Utilization Group (RUG) system for Medicare reimbursement is still driven by therapy, rather than high medical acuity, Zimmet said, though that will change in the coming years.


“It’s really the big picture of the patient: Who’s paying, who’s going to stay long-term, do you have the staff capacities and quantity to provide the care, what are the variable costs associated with that care, and how does the state handle it?” he said.

Thinking local

Once SNFs have done some self-examination, they have to look outwards and focus specifically on their their local hospital’s pain points and which specific conditions the hospital needs help handling. The goal of focusing clinical enhancement capabilities on those programs, while keeping an eye on the variable costs, has to be to increase referrals, Zimmet said.

“We always recommend evaluating the local market,” he said. “What are their needs, and building around that, as opposed to ‘If you build it, they will come.’ That is where the analytics come in.”

And when SNFs meet with their local hospitals, they will have to bring data.

They also have to send their clinical directors, W. Steve Love, president and CEO of the Dallas-Fort Worth Hospital Council, stressed at the National Investment Center for Seniors Housing & Care (NIC) Spring Investment Forum in Dallas.

A SNF that can prove clinical expertise and agree to quality metrics would stand out as one a hospital would like to have as a partner, Love told SNN.

“When you look at skilled nursing, you look at quality,” he said. “Quality metrics and the clinical treatment [capability], and the quality of their clinical treatment, really underscores the skilled nursing that hospitals want to deal with.”

Written by Maggie Flynn

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