Lorien, the ‘Nursing Home Company That Doesn’t Like Nursing Homes,’ Sees Home Services as Vital to Success

As the population of the United States ages, it’s becoming imperative for long-term care operators to come up with solutions to deal with the coming demographic wave — across a variety of settings.

For Lorien Health Services — which offers a range of services from skilled nursing to assisted living to dialysis across nine facilities in Maryland — that means making sure patients know that they’re coming into their facilities for therapy, care, or other treatments as a means of getting back home. To that end, the company offers Lorien at Home, which it provides free to patients within a short distance of its facilities.

That strategy gives Lou Grimmel, Lorien’s CEO, a unique view of the company’s role to patients.

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“My analogy is: I want to become their hairdresser,” he told Skilled Nursing News in a wide-ranging conversation on the sidelines of the Senior Care 360 conference in National Harbor, Md. last month. “There’s a million hairdressers out there, but people go to the same one because they know the good son, the bad son — they know you and you know them, and you have that comfort level with them. So establishing that comfort, to get them what they need to be able to get back home.”

While there will be a percentage of patients who need to be in the nursing home setting, the rise of technology has enabled more patients to receive care at home, he explained. And he sees the Lorien at Home program as a way for the company to prepare for the future of post-acute and long-term care.

This interview has been condensed and edited.

How did you develop the Lorien at Home program?

Well, my industry’s been talking about home programs for a long time. I haven’t. I’ve always said, [for] 30 years, if I had the same information on a patient at home that I did in the nursing home, I could take care of a lot more people at home. So the electronic medical record (EMR) gave me that ability to have the same information for that patient at home that I have [in the nursing home].

Now that patient needs oversight, so with all the new technology for home monitoring systems, now I can really watch over that patient at home, be in tune to every physician’s order, all the medication. Everything that I do for that patient in the nursing home, I can do for them at home. And nobody’s paying for the brick and mortar, the building and stuff. They’re in their home.

Now the way that we do it, is that every one of our homes, we do a hub and spoke. So what that means is our Lorien at Home program starts with that nursing home, and then we will only go within a 10-minute radius of that nursing home. Because the important thing is that person needs to know if they need us, we’re coming, no matter what time, if it’s Christmas, New Year’s, Hanukkah, whatever, just like in a nursing home. And we try to send the same staff that they know and feel comfortable with. With the technology, and them being able to talk to us with the technology, and us going to visit them, their comfort is there. I can’t do it for the whole state. I can’t get there within 10 minutes.

So the Lorien nursing homes are where the patients in this program begin?

Right. We offer the service free for people that were discharged to go back home. Technology is opening the doors to caring for seniors, and seniors aren’t just the seniors that they used to be. Our life expectancy is greater now — I say ours because I’m a senior, and whatever we do, I’m doing basically for me. What would I accept, you know? What are my expectations?

My expectation is: I’m going to come because the doc says I need to get intense rehab for the next two weeks. So don’t come up and not give me rehab on Sunday because your therapists don’t work [that day]. If I don’t get rehab on Sunday, I’m leaving. I’m not staying in the nursing home and watching the football game in a nursing home. If I’m there, I’m there for a reason, and you’ve got to be all in on that reason.

How many patients are in the home program, roughly? Obviously it would vary from time to time.

Yeah, it does vary, but I’m going to say probably just shy of 100.

Has that always been the number of patients, approximately?

No, we’ve had to grow to that. It’s interesting, even when you want to give somebody something free, a lot of people just don’t want you in their home. Even if it’s free. Medicare home health comes in and Medicare pays for it, but for whatever reason, they don’t want you in their home. So it’s hard to give things, even free. But once they have it and they’ve built their confidence level up, then they don’t want to live without it.

You say you provide this for free — is Medicare reimbursing for it?

No.

This is a blunt way to ask, but how does this program not lose money?

That’s a perfectly valid question. Health care, specifically nursing homes, is probably the only industry I know that has no research and development budget. They just do things the same way, and when somebody drops more money out of the sky, we’ll react to it.

I know what the next customer wants: The next customer wants to be at home. Why aren’t we developing that now, and learning from that now? Because the next customer is more than willing to pay for that. And by the way, it’s a heck of a lot less than assisted living or a nursing home.

So it’s our research and development. We’re in for the long run, we’re going to be there, we’re perfecting our product and we know the users and the families, because every time we get notified, if the family wants to, they can be notified too. They can stay in total control with us. They can hold us accountable, that’s the whole thing. That’s why I can’t do it for all of the state. They don’t want to hear that I got stuck in an accident or traffic jam.

Which does happen with longer drives.

Exactly. That’s why it’s a 10-minute radius, when we have to go. That’s not what we want to do, because every time we send somebody out, it increases the cost. But they know if we can’t get a response from them, we’re going.

If this is your R&D, for the future, then it sounds like you expect the population in facilities to decline over the next several years.

Yes.

By how much? Because like you said, there’s a percentage of people who need that type of care.

There is a percentage of the population who will need it. So I couldn’t help but read your managed care article. We took our at-home product to a Medicaid managed care company in Baltimore. I happen to know the guy at the company. And I said “Give me your high-cost users, give me 10 of your high-cost users, pay me a fee.” And the fee was, I don’t know, it was $300 or less a month. “Give me this fee and let me show you what I can do with that high-cost user.”

We did that for like four months. He came, had a meeting and gave me his whole roll of patients. “Here they are, get as many on as you can.” Because it works. If they don’t have something like that, what’s their alternative? They’re going to the emergency room. And that starts the cycle.

Does the patient really need to be admitted? A lot of times, and all the statistics and studies will show you that they don’t. But there’s no alternative.

Many SNFs seem to be thinking about home health business lines as a way to fight census challenges — what is your perception of that strategy?

There’s a number of issues. First, home health is another industry that is driven by Medicare reimbursement. The example I told you about, the managed care company and how we took their patients and put them on our home product — Medicare couldn’t do that. Because since I’m not a licensed home health agency, I’m licensed as a resident service agency (RSA), which means I can do anything home health can do, except bill Medicare.

The issue I see with home health agencies: They’re driven by Medicare reimbursement. Let’s say Medicare pays $100. There’s probably $40 of that $100 involved with paperwork and stuff that you have to fill out in order to be able to bill. That paperwork isn’t really helping anybody … if you have a certified home health agency, you have to carry the financial burden of what we have developed through the years, through CMS and saying, “Here’s $40 you’ve got to spend on every one of these patients.”

If you’re an RSA, the only thing I have to do is answer to the patient, make sure I’ve got patient satisfaction, and prove to the payer, the managed care company, that yeah, this is saving us money. It’s not complicated stuff.

That’s something I’ve heard, the need to pay more attention to payers, because they’re the ones writing the checks.

Exactly.

So what other steps have you taken on that front, in addition to going to the managed Medicaid company?

We’re reaching out to our payers. That’s how we’re going to build that. We are not a Medicare-certified agency, and specifically we don’t want to be one … There’s enough home health agencies in the world, I don’t want to compete. I just want to take care of my population. They talk about population health — I view it as the population within my jurisdiction that I can help.

What’s been the payer response so far?

For as many steps as we’ve been taking, it’s been very good. It will take off. We still have our normal business to run and keep up with the [Patient-Driven Payment Model] and all the changes, and we can only throw so many people at it.

But how we act and perform as a nursing home to those payers will grease the way for our other programs. So we have to keep our eye on our core business, and that’s why people are so shocked when I say that we’re a nursing home company that doesn’t like nursing homes. That is our core business.

And I like nursing homes, because I can see what they can be. You have the low end, but I also see the high end. I also see taking care of patients in my nursing home that haven’t been taken care of before in a nursing home. I want the patients that were only treated in a hospital. Now we can take, say, a sepsis: High length of stay, high cost to keep them in a hospital, but we can build a sepsis unit, and we can get that cost way down because we’re going to narrow our focus, so we can do just as good but a heck of a lot cheaper.

Insurance companies, you can get a “three for one” sale: three days with us for the price of one day in a hospital.

Now we’re in Maryland, so I have to qualify that … if you’re Kaiser, or if you’re United and you have all these people and you go any other state, you can sit down with the hospital and you can negotiate your rate. You can say, “This what I’m going to pay you.”

In Maryland, you can’t. [Under] all-payer, the commission sets the rate, and they don’t care how big you are, or how small you are, that’s the rate you’re paying, there’s no negotiation. That makes it even more so a platform for us, because the big guys can’t negotiate a rate, so the only place for them to get some relief is if I come up with a program, and I can get their patients out.

To clarify, when the insurers can’t negotiate for the rates, that’s just for hospitals?

Just for the hospitals. And that’s what puts us in the catbird seat, because if if we can maintain our quality, with our quality ratings and our reputation and we can keep patient satisfaction up, that’s the winning combination.

For our core business, I don’t want nursing homes to go away. Nursing homes have played a very important function, but I think that function is changing. And they can play either an equally important or more important one to society overall. So they have opportunity. But they’ve got to stop thinking, in my opinion, “Give me money and I’ll try to react to it.”

My devil’s advocate response to that is they don’t have a lot of money to work with right now. At least from what I hear, the fact that Medicaid is the largest payer and in many states is not paying enough would be a challenge.

Good point. So if you know that and you see that, what can you do about that, if you’re a nursing home? Just sit back and say “I need more money, I need more money?” What are you going to do about it?

You’ve got to do things. You’ve got to come up with programs. You’ve got to understand that insurance companies, payers, are looking for equal quality at a lower cost. And I think nursing homes are in the catbird seat. But they’ve got to do something.

What do they do, then? Approach insurance companies directly?

Well, they have to first develop programs. And if, you’re a two-star or less facility, forget it. Get your quality up. It’s a whole process. There’s no magic wand, there’s no switch.

The issue is that you’ve got to think long-term, and I think my industry has gotten out of thinking long-term. They live month to month, and they focus so much on an Excel spreadsheet.

Nobody knows [the senior] population better than nursing homes. But what innovation have you seen come out of nursing homes? Don’t get me wrong; I love my industry, I’ve been in it for 42 years, I love most of the people I know in it. But I haven’t seen much change.

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