Symphony COO: Moving Beyond ‘Fool’s Gold’ of Orthopedic Residents Vital to SNF Success

Joint replacements and orthopedic patients were once the bread and butter of the skilled nursing world, but as acuity rises and value-based care gathers momentum, it’s not a business SNFs can bank on having in the future.

Instead, they have to be hyper-aware of the needs of their specific market and respond accordingly. For Symphony Post Acute Network, that strategy has taken the form of adding units in its Chicago-area SNFs to take patients with behavioral needs, chief operating officer Michael Munter told Skilled Nursing News on the sidelines of the LTC 100 conference in Naples, Fla., last week.

Symphony, which has 24 buildings across Illinois, Indiana and Wisconsin, has made medically complex care a major focus of its business. But it has its fair share of long-term care patients, and as the skilled nursing world continues to shift, the company is actively moving to make sure it’s ready.

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SNN caught up with Munter to talk about Symphony’s patient mix, its plans for the future, and how it’s adapting to the changing skilled nursing world.

Can you talk about Symphony’s current patient mix, and whether there’s been any change from last year, when the focus was on short-term, high-acuity patients? I know you have long-term patients as well.

So the answer is yes. And why I say that is: We have 24 buildings today, and if everything goes right we should be very close to 30 buildings, I’d say certainly by the end of the year. That’s what’s been keeping me busy.

In terms of patient type, which is what you’re asking me, we really have two different businesses within the Symphony umbrella. We have the traditional — not that that really means anything because it’s changed so much — but the traditional higher-acuity SNF, which has what’s called an 80/20 complement, give or take. So 80% long-term care, 20% short-term.

[The pure post-acute patients] have really been our focus for the past three to four years in terms of growth, development. [They] are almost what’s called the perfect quality mix — which, it’s all short-term and private pay.

So all of our Indiana properties, all three fit that. Our Evanston facility does very nicely. We have buildings up in Buffalo Grove [Ill.], for example, that do a phenomenal job from a clinical perspective in returning folks to home. Because 92%, 93% of folks, give or take — it’s a moving target month to month — come to us and 20, 25 days later return home successfully.

In some ways this sounds like an ideal mix of patients for the Patient-Driven Payment Model, but I know that that was recent enough that that wouldn’t have been driving decision-making on Symphony’s part. So how did you end up focusing on this type of patient?

So to give just a bit of historical perspective that I think is important here: Symphony was founded over 40 years ago. And our company is the largest owner/operator in the city of Chicago. So we do business with pretty much every health system from University of Chicago to North Shore … you get the idea. So we’ve always taken that higher-acuity patient.

For us, PDPM is just natural — we are actually really excited by the fact that we’re finally going to be compensated for the acuity of our patients. And PDPM is very much in line with case mix on the Medicaid side. That’s how we see it. For us, it’s obviously a nice benefit from a reimbursement perspective, but does it really alter our business model? Not really, because we’ve always had that business model.

You’ve talked about the Indiana facilities; are they all private pay? What portion of Medicaid patients would you say you have overall?

At our Indiana properties — imagine under one roof there’s two stories. Top story, you have either a 30-, 36-unit assisted living that runs pretty much full, which is all private pay. And then call it downstairs: You have either a 70-room or a 100-room, all private room SNF. where 95% is all short term, managed care, Medicare, etc.

The reason I bring up Medicaid is that there was a pretty dire report from the Health Care Council of Illinois (HCCI) on the state of Medicaid funding in the state, and Symphony has a pretty big presence in Illinois.

We do, but we’re looking to sort of hedge ourselves out of it. Our CEO, David Hartman, is very active with HCCI. And there’s a lot going on in terms of working down in Springfield; we’re trying to get some sort of a payment bump. What that payment bump is remains to be seen, but hopefully we’ve got some good news by the end of the year. Because you are correct, what you’ve read is true.

If you look at it just as a patient-specific type, it’s a very tough place to be financially, in terms of the absolute dollars that we receive. And also sort of the payment cycles themselves, which can be delayed three, four, five months sometimes.

One thing I wanted to dig into is your patient mix. You’ve got a focus on the high-acuity, post-acute, short-term patient; do you plan to expand that focus? Or will you always have a mix of that ‘traditional’ long-term patient, if you will?

You’re asking: Sort of strategically, what does that optimal mix look like? The answer is there, again, yes. First of all, we’re a fairly large company, so we’re able to juggle internal financials and things like that, even though this is not something I handle — this is something our CFO handles. We’re able to deal with it. Is it fun? No. Is it challenging at times? Yes.

But to answer your question in terms of what the future outlook is, the future product we’re looking at is more of a private-pay model and the skilled nursing model outside the state of Illinois. Honestly, we have enough Illinois risk, so we’re looking at other business models. Me personally, being charged with operations, I’ve run assisted living, I’ve run independent living, I’ve run memory care — so, for me, it’s a natural extension in terms of just operationally building that team and just driving.

Those other service lines, they’ll be things other than skilled nursing, it sounds like?

We’re going to be looking at assisted living. And higher-acuity memory care.

One thing I wanted to ask about was the possible issue of overbuilding when it comes to short-term rehab, especially given that Mainstreet, which had that model, ran into problems. Given that focus at Symphony, do you see any danger of this happening?

For what you’re speaking to, Indiana is an interesting dynamic because it’s a non-[certificate of need] state. And so if you have the land and the capital, you could theoretically build a building anywhere. Thankfully, our three buildings there all do very well, they all operate well above industry norms in terms of occupancy rates and things like that. But you have to pick your markets very carefully, and so if you don’t pick your markets carefully and you don’t really understand your referral base, etc., could you run into problems? The answer’s very much yes.

But we did our homework ahead of time, and so thankfully our buildings for the most part on a stabilized basis run well north of 90% occupancy, which is good.

At the end of the day, we’re in the business of caring for people. Obviously no margin, no mission, right? But our entire team is really dedicated to taking care of patients, and so every day of the year on average we’re caring for 4,000 to 4,5000 patients, and what goes along with that — some of which are probably some of the most complicated clinically. And on the South Side, West Side of Chicago, socioeconomically, it’s tough.

There are more challenges to health than just the medical conditions.

Exactly. And so I’m in awe of my team every day, certainly at the regional level, at the center level, of how good a job they do. Because it’s not easy and with diminishing dollars, it’s not simple.

With that as a backdrop, I know Symphony was looking at services and new programs for new patient populations, such as those with substance misuse or mental health needs. Can you talk about some of the new patient types Symphony has added?

In some parts of the city, we have what’s called dual diagnosis, which is what you’re speaking to. There’s a clinical element to their care, and a behavioral health element to the care. We have what’s called the Duet program to deal with that and to care for these folks. Normally what we do is we have to kind of separate them in separate units or parts of a unit, where we have very distinct care protocols for them. it’s a little bit different than dealing with a traditional skilled nursing patient.

One of the panels here talked about that, how you can’t just place such patients into the traditional skilled population.

No. If you do that, you could potentially put everyone at risk. So you have be very careful both on the front end in terms of screening, and be very careful around the behavior. They could be abusive or combative. There are so many things you have to take into account.

Is that a recent program or has that been in the works for a while?

It started within the past year on a formal basis. That is a direct result of the relationship that Symphony has at the highest levels with the hospitals themselves. The heads of discharge planning say, “Hey guys, we love you, but our patient mix is changing.”

I went into the field three weeks ago, I sat down with them and they’re telling me the same thing. I’ll ask the question: We want to be a good partner, what does the rest of ’19, what does 2020 look like?

And they’re saying, “We’re seeing a lot more of these patients, Mike, so if you could add capacity…”

What’s crazy is a few months back, we’ve put these units out. They’re literally filling them up. I don’t know if it’s a good or a bad thing. It is challenging. But is another example from earlier of just responding to the market’s needs.

Is this program in all facilities, or just a select few right now?

Select. Since we’re a large portfolio, each building, depending on market needs and the referral hospitals, will have different programs.

Thankfully, occupancy is very strong for us as a company. Really we review our strategy every quarter, and do our best to include our hospital partners in those discussions as well. So if you’re asking me just blindly: Do I see these, particularly the Duet program, expanding? Certainly in the city, certain parts of the city.

Do you have other programs and initiatives that are targeting such specific care?

We have our orthopedic program, but orthopedic … as I’m sure you’ve heard covering the industry, that business — I won’t say has come and gone, but certainly the acuity around the orthopedics, the co-morbidities and such are off the charts, right? We’ve built a business around it, but I’ve always told the team, it’s kind of like fool’s gold. You have it today but don’t count on it for tomorrow.

Donna [Sroczynski, president of operations at Symphony] and I spent a lot of time reading the Affordable Care Act, and we’re out in the field so often, and we see how the hospitals CFOs and CNOs are starting to think about ACOs. You can see what’s going to happen to those patients. So we’ve built a business much more around that higher acuity, which is more the cardiac, pulmonary type patient.

Can you talk a bit about the future, and where you see the skilled nursing world going?

The nursing home of the future: For us, acuity remains as is. Again, it tends to be higher.

Number two is I just think the acuity continues to ratchet up. I’ve been doing this for 20 years. I used to run buildings that used to be half private pay and half Medicare. That private-pay business has all but dissipated, with the exception of the highest acuity. That’s all gone to assisted living. It’s gone to memory care communities and stuff like that. So you’ve seen that area of the industry explode.

We’re implementing telehealth in a lot of our buildings. We’re working hand-to-hand with Advocate [Health Care, a Chicago-area hospital network] to better manage these patients. We’re trying to be very, very creative with even public payers around value-based care and stuff like that. They’re starting to recognize – because of our scale and our ability to bring data back to them, we can say: “This is what’s really going on. I know you want A, B, and C, but I need a little bit of help over here, because what you’re asking for $150 a day, I’m not sure I can deliver that to you.”

And believe it or not, because of the quality, they are sitting down with us and listening in earnest.

This interview has been condensed and edited.

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