Within each skilled nursing facility, leaders must balance the goal of providing excellent care with the financial constraints of the business, from low Medicaid rates to shifting discharge patterns.
By hiring Mark Weiss as its new chief financial officer this month, The New Jewish Home in New York got an executive who can do both.
Weiss comes to the Manhattan-based skilled nursing, home health, and senior living non-profit from Montefiore in the greater Cleveland area, where he worked for 17 years, primarily as CFO — as well as the certified administrator of Montefiore’s largest nursing home for the last eight years.
SNN called Weiss for the latest edition of our Bottom Line series, a regular feature in which we ask CFOs and other financial leaders about the challenges and opportunities they see on a daily basis.
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What’s your perspective as someone who’s held both financial and operational roles?
It was very helpful and useful, because as a CFO, I can create a budget, and I can send it out to the department heads and say: “This is what we have to live with.” But as the operator, I needed to make sure that we were hitting certain staffing levels. I needed to make sure that we were dealing with quality measures. I needed to make sure that we were dealing with resident and patient satisfaction. So I had to spend money at certain times, and I had to allocate my budget accordingly.
Additionally, if there were any challenges that came up, I knew that it was for the better good of the organization, that as the operator, I would needed to invest here, and I would have to put my CFO hat on a little later and figure out how to reallocate funds.
It really worked well. There wasn’t this disconnect where the CFO’s advocating to stick to the budget, and the operator’s saying, “I need money to go ahead and run a good operation.” I was doing both at the same time.
The best operators tend to be the ones that have that collaboration between ownership and operators.
Correct. If you don’t have the care, if you don’t have the quality, you’re not going to have an operation. So yes, you have to invest in the care and the quality, and generally business will follow you. You just have to be a good steward of those funds when they come in, and spend wisely.
Are there any challenges that are specific to non-profits in the skilled nursing space?
I’m not sure it’s really different for non-profits than for for-profits. It’s not really our tax status; it’s really our mission to provide good quality care for seniors, and it’s very costly. Unfortunately, the reimbursement is generally not going to cover the cost of the care — that’s primarily for the Medicaid population.
Most nursing homes — most — have a significant population that is covered by Medicaid. Medicaid is generally severely underfunded and doesn’t cover the cost of care. So nursing homes are always faced with that challenge, that they’ve got many individuals covered by a payer that’s not covering the cost of care. They try to make that up a little with Medicare, which has some positive margins, perhaps a little bit in private pay.
The benefit as a not-for-profit, is that you can structure your organization as providing a community benefit. You can get funding from private individuals, from institutions, from groups like the UJA [the UJA-Federation of New York, a local philanthropic organization] and so on, to help cover the shortfall as you’re providing that community benefit for your patients and families.
Medicaid reimbursements are major problem across the country, but the exact program structure varies so much among states. Do you see any differences between the landscapes in Ohio versus New York?
I think the challenges are generally the same in that there isn’t sufficient funding to cover cost of care — although, in New York, they might pay, let’s just say, $100 a day more than they do in Ohio, but the cost of doing business is significantly higher. So you’re still running a similar shortfall of many dollars per day, per patient day. It’s great that the nursing home here at the New Jewish Home is getting $100 a day more than maybe the average home in Ohio, but it’s costing at least $100 a day more to do the work in New York than it is in Ohio.
It’s similar challenges. The state government has to have a balanced budget; they can’t just print money. They’re forced to then focus on balancing their budget. One of their biggest expenditures is health care, and they look to different areas, particularly long-term care, where they could possibly see some savings.
They look to different ways of reducing that reimbursement. That’s the challenge that we deal with as far as advocacy: explaining to those legislators the good work that we do, the people that we’re taking care of. It might be their parents, their grandparents, their neighbors. And then inviting them into our facilities, explaining to them what we’re doing, so when they come to legislating, we can really help them understand the work we do so that we get sufficient reimbursement to really cover the cost of the care we provide.
From a financial perspective, are you optimistic about the Patient-Driven Payment Model?
I’m optimistic. It always gives us an opportunity, when a new reimbursement system is introduced. It happens every number of years — once we’ve actually figured out the old reimbursement system, the government decides it’s time to change the reimbursement system on us. But now it’s going to focus less on the minutes of therapy delivered and deal in more complex care cases, which we do quite a bit of over here. Internally, the staff for months and months and months have been working on PDPM preparation. It is a lot of work, a lot of effort, but ultimately it should pay off.
Of course, the government looks at it as budget-neutral at the beginning. Probably, as providers try to adapt to PDPM, there might be some areas where people may go down in reimbursement, or lose some money, but I think people will readjust, learn the system, adapt, and continue to provide the good care and manage within the PDPM system.
I think those providers that have invested early, or invested smartly in the time and talent and technology, should see possibilities for increased reimbursement.
What’s skilled nursing’s place within the senior living and care continuum? Your organization has multiple options, and do you look at the organization as one network, or individual discrete business lines?
I think we look at ourselves as having an integrated system of providing services to seniors. There are also services that we provide in people’s homes, like with home care solutions. That’s an area that probably will be a growth opportunity for an number of organizations, as individuals tend to want to be at home, and not institutionalized.
As we look in our organization, and I’ve only been here two and a half weeks, it’s my understanding that we have the different solutions as far as providing services at home, doing housing services, nursing home care, post-acute care. We’ll continue to evaluate what is best for our residents, our families, and for the organization, and adapt accordingly.
It’ll take some time to look at what is the best path forward. But I think there will be a focus on providing more services at home, which I think is a trend generally — at least in Ohio, where the state government has focused on moving people out of institutional care and into the community setting, where they believe they will get a better quality of life. We will need to explore that as well.