Skilled Nursing Providers Need Steady Vision to Survive Value-Based Struggles

While skilled nursing operators have increasingly faced stresses related to the ongoing shift to value-based care — primarily the threat of decreased reimbursements — at least one observer says the industry hasn’t seen anything yet.

“You’re just entering the value-based dynamic right now,” Mountasser Kadrie, a health care management consultant, said during a presentation at the American College of Health Care Administrators’ annual convocation in Orlando last month. “By 2019, when all the programs are online and kicking in, you have to make sure that your facility has something to do with this.”

In his work as a consultant, Kadrie said he’s routinely surprised to hear that executives in health care systems are unfamiliar with the Centers for Medicare & Medicaid Services’ so-called “triple aim” for improving U.S. health care going forward: improving individual patient outcomes, cutting costs, and boosting the overall health of the population.


“I am absolutely shocked that I see people on the executive level who don’t really have a good understanding of this,” said Kadrie, who has served as an executive clinical administrator at the University of Texas Medical Branch and an adjunct professor at the University of Texas Health Science Center at Houston.

Data dilemmas

That lack of understanding can also trickle down to the facility and caregiver level, Kadrie said, which can scuttle efforts to align an operator with new payment initiatives such as the skilled nursing facility value-based purchasing (SNF VBP).


Under that model, which takes effect in October — the start of fiscal 2019 — SNFs will see their Medicare reimbursements automatically reduced by 2%. By meeting certain benchmarks, such as lower readmission rates, individual facilities can earn back that cash — or risk losing that money entirely if they can’t improve performance.

The value-based payment landscape also includes the rise of Medicare Advantage, which has been increasingly gobbling market share away from traditional Medicare — and forcing providers to adapt to a landscape in which private insurers dictate Medicare terms.

To face both of these new challenges, top thinkers have increasingly preached the importance of using data to prove individual SNFs’ worth to Medicare Advantage plans and increasingly narrow referral networks. In addition, solid data can help identify issues ahead of the VBP rollout later this year.

But there are pitfalls, and Kadrie specifically pointed to the experience of the University of Texas’s MD Anderson Cancer Center in Houston as an example of what could go wrong.

That leading hospital lost hundreds of millions of dollars after it implemented a new electronic health record system in 2016, forcing management to lay off hundreds of workers — and proving that a technologically advanced data collection means nothing without a unified vision behind it.

“It’s not the tools that you use — it’s their alignment with the organizational goal you’re trying to achieve,” Kadrie said.

Part of the problem, in Kadrie’s estimation, is the lack of consistent leadership at the executive level. Two decades ago, health care CEOs spent about eight and a half years at the helms of their companies, he said, while now it’s down to around four.

“[If] I am a new CEO, I put a grandiose plan that’s going to take 10 years to implement. But the data says that I’m going to stay at my job for four years,” Kadrie said. “I move on, they get a new CEO, and he says: ‘This is not me.’ What is the commitment here? This is really the biggest issue.”

Instead, Kadrie said leaders should focus on making sure a value-based vision trickles down to the lowest rungs of every organization, ensuring that physicians and caregivers understand the reasoning behind the new emphasis on data collection and quality outcomes. CMS’s goalposts for specific quality metrics can and will change over time — some experts say the United States won’t have a fully value-based health care landscape until 2030, according to Kadrie — but a clear vision can help providers weather the coming changes.

“This requires a significant shift in the way we do things,” he said. “Measures are not goals. They are not perfect — they are evolving and they change. What we need to do is focus on what your patient and population want.”

Written by Alex Spanko

Companies featured in this article: