Eric Mendel took a gradual road into the skilled nursing space, but the Avenir Healthcare CEO believes that his experience in other parts of the continuum could help create new and better pathways for residents to receive care in the right setting.
Mendel has served as the CEO of the Queens, N.Y.-based Central Assisted Living since 2002; five years later, he expanded into the home health care space with Prime Home Health Services. Mendel and his team decided to enter into the post-acute and long-term care space in 2015, and has since begun to probe some of the key gaps he’s observed along the continuum — including a lack of memory care services for lower-income seniors who can’t afford the pricey private-pay buildings that have populated the landscape over the last decade.
In recognition of his work in the senior housing and care industry, New York City mayor Bill de Blasio this summer appointed Mendel to the Age-Friendly NYC Commission — a group of civic leaders and experts tasked with developing new services and programs for the aging population — for the 2019-2021 term.
SNN called Mendel to learn more about Avenir’s strategy in the space, as well as his vision for the future of aging in New York and beyond.
Tell me a little about how you see your company in the overall senior living and care space.
My goal, even though we went into the nursing home space, is to keep the individual most independent and in the least restrictive environment. One of the innovative programs that we’re starting now: Memory care is big throughout the United States, private-pay memory care, but there actually is no memory care for the low-income, Medicaid population, right? They fall between the cracks. The assisted living program, which is a Medicaid-funded program, doesn’t take care of people who need a locked unit because they’re wanderers and so on.
What I began to see, when we got into the nursing home space, is that most people who actually want to go to a nursing home, it’s not from the acute-care side. We get inquiries on our website, and about 95% of them are: My mother or father has dementia. They’re on Medicaid. Do you provide services for these people? A lot of time, they’re high-functioning — they don’t need a nursing home. They need a locked environment, dementia safe spaces, things of that nature.
We received a grant from the New York State Department of Health to build one of the first assisted living programs for the dementia, Alzheimer’s, memory care population. So that’s something that I’m very excited about.
The traditional pipeline for the nursing home, or any kind of institutional care, goes through the hospital — Medicare is usually the way in.
It breaks my heart. You see a lot of these people that don’t need to be in a skilled environment.
It’s a new model of care. Everything in health care works at a snail’s pace. If you stay a journalist, I think we’ll talk about this over the next couple of decades, actually.
The post-acute care industry can be incredibly siloed.
Yeah, and if there’s no communication between the various companies, it’s a problem. Obviously, the patient has choice — if they don’t want to go to an affiliated agency, by all means … nobody pressures them.
There’s some good nursing homes out there, but we wanted to create a real continuum and provide a high quality of care. So we were looking for nursing homes first in New York State that we felt are in good strategic locations, and we made a deal with an operator, and purchased three nursing homes. Two of them were five-star facilities with a high quality of care.
One of them, Brookside, which is in Smithtown [N.Y.], is a very large, 353-bed multi-care center. It has Long Island’s only pediatric unit, and it has a dementia unit; it has a short-term sub-acute unit. I saw a lot of potential. It was a one-star facility at the time, and it’s 18 months later, and we’re already at five-star quality measures.
We hope to be a four- or five-star facility very soon. We’re providing five-star care, but the CMS rating system takes time to get your scores up.
What do you look for when evaluating properties for expansion?
I take a look at the competition. I definitely look at their quality mix, if it’s a nursing home. The three buildings I bought in New York, they happen to all be in great strategic locations, and they all have their unique set of attributes that make them a quality facility.
It’s a lot more complex than evaluating a deal in, say, senior living.
It’s totally different. A lot of times, especially with assisted living, if you have a non-CON [certificate of need] state, you build a nice building, and across the street, a developer can build a nicer one.
At least in New York, we have a high barrier to entry in all sectors of the senior living industry. It’s almost impossible to build a nursing home or assisted living facility — not only because you have to go through the whole CON process, but the community usually rises up, and development costs and land costs are high. It’s different in each state.
A lot of people talk about site-agnostic care — providing services at the site that makes the most sense for the individual patient or resident. Is that how you view your companies?
Everything is consumer-driven, and that’s what’s good for business. If you’re a provider, and the consumer knows that there’s a place for you after you’re discharged from skilled nursing, I think they would choose that provider. I mean, that’s what I would choose.
For many decades, somebody is discharged from a nursing home … who knows what happens? The way that I look at it, health care, long-term care, has to be consumer-driven — and the consumer’s getting younger and more tech-savvy, and it’s changing. Now people are working into their 90s, so it’s a much different environment.
How do you attract consumers in a skilled nursing world that’s dominated by transfers from hospitals or recommendations from physicians? It’s not the same as me deciding where I’m going to eat lunch.
It’s tough, but you have to analyze your competition and see how you can set yourself apart — anywhere from your foodservice to your case management or concierge services, to your physical appearance.
My background is assisted living, so the whole assisted living movement has that more home-like environment where a person ages in place, and you see a lot of the skilled nursing facilities — and even acute-care hospitals — are taking that assisted living, hotel-like services model. That’s what the consumer wants.
Tell me more about your home health company’s managed long-term insurance plan, and whether you see opportunity for skilled nursing.
I think that states turn to managed care to save money, and I understand from the state’s perspective why they want to do that, because they want to get out of the business of Medicaid.
New York State was aggressively turning toward managed long-term care. I think that they were very aggressive in the beginning; they wanted all people in some kind of managed long-term care program, including residents of skilled nursing facilities. I think now, things have changed a little, where maybe their approach was a little bit too aggressive. They had issues with the implementation of FIDA [Fully Integrated Duals Advantage, for both Medicare and Medicaid], this fully capitated program. They felt that was the future of managed long-term care, and then everybody would choose FIDA.
The problem was that it was a voluntary program, and who would want to give up their Medicare benefits voluntarily to join a managed care plan? People don’t have a good taste in their mouth — they work their entire lives for their Medicare card. So that fully capitated program was a bit of a flop.
But this partially capitated managed long-term care plan, I think, is here to stay in New York State. Maybe it doesn’t work well in the sub-acute environment, and in a nursing home environment, but it makes sense to manage the needs of the consumer in their own home. It saves the state a lot of money, because the plan is getting a capitated monthly rate. They have to provide services, home care services [within] that rate, and they’re incentivized to be efficient. The home care system in New York, it used to be that you got paid by the hour, so it incentivized providers to have more hours.
I think managed long-term care is definitely here to stay. In the nursing home setting, I think that you’ll see more I-SNPs [Institutional Special Needs Plans] and more large providers starting their own I-SNP programs — because I-SNP works well with the whole PDPM movement, of providing efficient care.
Speaking of PDPM, what’s your outlook on the future of senior housing and care moving forward? Will it remain siloed in the future, or are we going to see truly site-neutral care and payments?
I think the mom-and-pop shops will slowly disappear, and there’ll be sophisticated providers — not the “focus factories” that are just looking at one sector of the continuum.
I think you’ll see more providers saying: “The consumer, we have to take care of them throughout the process, and that can start with them living in independent living, and then going to assisted living, and then skilled nursing if they have to, and then back to assisted living” — and really taking care of a person in the environment that they want to.
Not everybody wants to be taken care of in their own homes. Some people like the congregate care environment. But the demographic is definitely changing. There are people working well into their mid-80s and 90s now, and a lot of them are savvy with the Internet and research, and figuring out who your competition is.
I think it’s a more sophisticated consumer that demands more. Technology will play a big part as well. In 10 years, the long-term care system will look a little different than it does now. Everything takes a long time. We might be having the same conversation in a decade.
This interview has been condensed and edited for clarity.