PruittHealth spent 2019 celebrating its 50th anniversary in the post-acute and long-term care space, but second-generation CEO Neil Pruitt, Jr. says his company — along with the rest of the industry — must focus on novel and creative strategies for surviving into the future.
Pruitt sees potential in a variety of forward-thinking initiatives, from the Norcross, Ga.-based skilled nursing provider’s in-house Medicare Advantage plan to increasing specialization under the new Patient-Driven Payment Model (PDPM).
“Folks that don’t change the way that they provide care, and try to operate like they did before PDPM — they’re going to be people that are going to be losers under the system,” Pruitt said.
The CEO and chairman sat down with SNN to discuss his outlook for the Norcross, Ga.-based PruittHealth, which currently boasts more than 100 skilled nursing and assisted living properties across the Southeast — as well as home health, hospice, and pharmacy business lines.
In addition to its Institutional Special Needs Plan (I-SNP), Pruitt expressed optimism about the company’s PDPM prep, as well as its novel staff-development process, which includes a training course for some of its top certified nursing assistants (CNAs) at Disney World.
How do you handle running a chain with more than 100 properties, especially in an era where the smaller, regional model seems to be dominating?
Well, we’re a family company — and it’s not the Pruitt family. Our mission statement is: “Our family, your family, one family committed to loving, giving, and caring, united making a difference.”
So we’ve really fostered that family atmosphere. We like to say that we’re your hometown provider, and have more hometowns in the Southeast than anyone else. And that’s our philosophy, is to create a great place to work, and a great place to live by being a part of the community — and we aren’t just focused on the skilled nursing facility.
The environment for skilled nursing facilities has been very tough lately. So luckily, we have other businesses that can offset that, and allow us to continue to invest in the business and continue to provide high-quality care. You know, we aren’t a public company; we aren’t owned by private equity or any of those nine yards. So I think our culture is fairly unique in the skilled nursing arena today.
How do you find those ancillary businesses really play into what you do on the skilled nursing side of the operation?
A perfect example is there was an initiative few years back to really drive down anti-psychotics. We had our consultant pharmacists that were part of that, and really helped to decrease them pretty dramatically. When we’re able to have the holistic picture, we’re able to really make some pretty dramatic improvements in quality. Where we’ve been successful with ancillary businesses, with our non-related customers, is we simply say that we’re pretty smart people, but we aren’t smart enough to run two systems.
So not only we do we try to create value during ancillary services for ourselves, we try to share that with our customers, and really show them that they can achieve superior quality outcomes.
In terms of the financial aspect of it, insurance companies are constantly decreasing lengths of stay, driving efficiency, and so forth. And that doesn’t always necessarily lead to better outcomes for our patients. So we said: If we were a provider-centric Medicare Advantage program, what would that look like — if the caregivers were really at the top of the pyramid, driving the best services for the patient?
It’s young in its maturity cycle as a business. But we were really excited that we’re going to be able to be a risk-bearing entity.
Tell me a bit more about your I-SNP.
It’s in Georgia and the Carolinas. So it essentially functions as a Medicare Advantage plan. We are paid by CMS to take care of all the needs of the patient. They’re primarily long-stay patients in our facilities. And then other services that they need — if they need physician services, if they have a hospitalization — we are at risk for that as an organization.
We’re paid one capitated payment. What it really let us to do is be real creative. We have nurse practitioners to monitor the patients in the building. We are piloting a physician services company where we have employed physicians. And what we’re seeing is that through care coordination, you’re really creating a better customer experience for our residents.
We’re also able to really maximize the amount of high-skilled folks that are overseeing a patient’s care. So it’s really been a win-win. We brought in some partners that have helped us really understand the insurance and claim processing side of it. People across the country are following suit, and the future of skilled nursing is going to be being able to bear risk and deliver superior outcomes.
It does seem like a benefit on both sides — you can have that continuum control, but also from a patient perspective, it’s one service provider.
Absolutely. I think that you’re offering a competitive product that’s available from insurance companies out there currently. So we’ve been really excited about it, and had a great response from our customers.
The other big issue that’s on everybody’s minds right now is PDPM. The early returns have shown more winners than losers, and I’m curious about your perspective in the Southeast.
We have always been a real proponent of PDPM. I’ve been excited about it since it was announced. We’ve been working on it for the better part of two years, really preparing our organization for it. We’re excited because payment is not based on the provision of services; it’s based on the characteristic of the patient. We’ve always had a higher-acuity patient; this system incentivizes providers to really staff up clinically and be able to take those more clinically complex patients — so it’s really shifted the incentives for providers to be creative.
In terms of if it’s going to be positive or negative — we’re working through that. The initial returns are looking like it’s not going to be detrimental to us. What we’re really excited about is the creativity that it allows us in caring for our patients.
There are incentives there to really take those respiratory patients. We’ve always had vent units, but we’re being more creative in our respiratory programs and things along those lines. So whether it’s going to be positive or negative, it’s too early to tell, but it definitely is going to create incentives for providers to be creative and staffing their buildings to then take those clinically complex patients.
I’m curious to see where providers are going to start branching out, in terms of specialty services, once we get a little more visibility into PDPM.
I think you’re going to see buildings — and we’re doing it with ours — really develop clinical niches, and really specialize in certain disease states. If they do that, and they really focus on it, you could see different facilities as specializing in different complex medical conditions.
I think those people that are willing to do it will thrive and will be rewarded; folks that don’t change the way that they provide care and try to operate like they did before PDPM, they’re going to be people that are going to be losers under the system. So it inspires creativity. And I hope it will continue to work with CMS as we refine the system going forward.
What’s your outlook and strategy on the long-term care side of the business?
Our policymakers must do something about the long-term care side. Every provider that I know of — with the exception of a few states — [but] I can say for our organization that we lose money on every single Medicaid patient. And there’s that historic hydraulic between Medicare and Medicaid, and it desperately needs to be fixed. You can’t survive by being a Medicaid facility. I know some people do it, but we haven’t figured out how to. That’s really not creating a good incentive to maximize outcomes with that population.
\The other item that really, really concerns me with that population is: liability costs are outrageous. So what the state is paying us, a good portion of that goes to protect ourselves against trial lawyers. And that’s really a shame. So until Washington gets serious about tort reform, providers are going to continue to struggle. The states that are doing the best are those states that have had meaningful tort reform. So I would encourage states to continue to look at that. But more importantly, I think it’s time for the federal government to get involved.
We’re entering that time of year where we’re looking into next year, and some the biggest challenges and opportunities. What the top things on your mind as you’re looking into 2020?
Well, I think PDPM, and PDGM on the home health side, offers the biggest opportunity. Providers that can discharge patients, and follow them into the community, really could do well and create a value proposition that really could lead to some great financial outcomes and quality outcomes. So that’s what excites me the most.
The biggest fear I have is finding qualified nursing staff to deliver the care that we need. I serve as a regent on our university system here in Georgia, and as institutions, we aren’t producing enough nurses — and then the nurses that are produced, it’s all-out warfare to try to win those nurses’ hearts to deliver care.
We need to do a better job producing qualified staff. We need to do a better job retaining qualified staff and really letting them know how rewarding it is to care for our population. The staffing in this economy is really difficult, and I’m hearing it from my peers across the sector.
There’s so many people who want us to staff our buildings higher, and report it through CMS. But it’s not that providers don’t want to staff their buildings — it’s that they can’t find the staff. So we really need to come together and be creative with that staffing solution solutions.
I’ve been covering the space for almost three years now, and I feel like that’s been at the top of everybody’s mind for a long time. But there doesn’t seem to be an easy solution to that problem — what are some creative examples you’ve had?
One thing that we’re most proud of is our senior CNA program. We take two of our top CNAs from every one of our buildings, and we have buses that start at the outer edge of our service territory and they work their way down to Disney World, and we pick up two CNAs along the way.
They undergo the Disney Institute customer service training, and they also complete modules and advance and they get certified as one of our senior CNAs, which comes with a $2 increase in their wages. They’re able to help be a leader among their peers in the facility, and really help us drive the culture that we want. So we’re real proud of that program.
Another program that we’re proud of is our Caregiver the Year award. I mentioned this year was our 50th anniversary, and we had a big event and a great venue downtown with a band and lights, and really made a big deal out of it. Caregivers were nominated throughout the company, and were voted on by the administrators of our buildings.
The top one won $50,000, the second place got $25 [thousand], the third place got $15,000, and the winners of the different regions got a $1,000 bonus.
But it’s not about the monetary reward; it’s about really focusing what we do on those caregivers, and it was really positive. We’ve just got to keep telling our story and keep reinforcing what good people we have delivering good care. That’s how we’re trying to combat the problem — really focusing on the folks that do such great work in our buildings each and every day.