Each January, SNN tries to predict the top trends that will sweep the industry for the coming 12 months.
In 2021, the task has never been harder.
COVID-19 completely wiped out the predictions we had made for 2020, a year that began with the looming specter of clawbacks related to the Patient-Driven Payment Model (PDPM), further Medicaid strain, and the potential over-extension of organizations that had sought to diversify into new business lines.
After a 2020 that saw more than 100,000 deaths in long-term care — the direct result of an unprecedented pandemic that exposed long-festering flaws in our senior care infrastructure — we’re loath to make firm predictions about what the future will bring.
But leaders and regulators must approach 2021 with the knowledge that we can never repeat the disaster that we’ve lived through so far — and which remains far from over.
With that in mind, here’s a few of the trends that we think we’ll see in 2021 and beyond as the nation looks to rebuild a system that had needed structural reform for years, and now more than ever.
Regulatory changes abound
In what should be the most obvious trend to anyone who has followed the sector this year, regulatory changes at all levels of government will — and must — begin to reshape nursing home care across the country.
As 2020 came to a merciful close, states had already begun to take steps to apply the fatal lessons learned during COVID-19, and also right long-standing wrongs.
Illinois implemented stricter enforcement guidelines around minimum staffing levels and the inappropriate use of psychotropic drugs in nursing homes. New Jersey will begin requiring lower resident-to-nursing assistant ratios in February, while also investigating ways to develop a stronger workforce in the space.
On the federal level, President-elect Joe Biden’s selection of California attorney general Xavier Becerra to head the Department of Health and Human Services (HHS) signals a pending culture change at the Centers for Medicare & Medicaid Services (CMS).
Under the Trump administration, CMS indeed implemented a variety of new rules for nursing homes before and during the pandemic, including a controversial “warning icon” for facilities with histories of abuse and neglect on Nursing Home Compare, stricter standards for achieving top staffing grades, and higher fines for infection-control violations.
But administrator Seema Verma often accompanied the nursing home regulations with a side of business-friendly language about reducing paperwork and compliance burdens; Mark Parkinson, CEO of top nursing home lobbying and trade group the American Health Care Association, appeared on CMS calls with the administrator during the crisis this past year.
Trump and Verma’s CMS also delayed the implementation of a sweeping overhaul to the Requirements of Participation, the baseline set of compliance targets that every facility must meet to receive Medicare and Medicaid certification; the softening of a rule requiring a full-time infection preventionist drew particularly harsh criticism in the wake of COVID-related infection control failures at facilities across the country.
As California’s top prosecutor, Becerra was a vocal opponent of Trump’s nursing home policies, including the RoP delay and the administration’s attempt to reverse an Obama-era ban on mandatory arbitration agreements for residents.
A Democratic administration was always going to bring with it a stronger preference for direct regulation than the outgoing GOP regime. But in the wake of a national disaster with nursing homes at the epicenter, the sector must prepare for greater scrutiny than ever before.
And while the industry has long decried the heavy hand of Washington in its affairs — I wouldn’t have to work if I had a dollar for every time I’ve heard the old “regulated almost as heavily as nuclear power” saw — leaders must be ready to accept that change to the old ways of operating are coming, and mean it when they commit to working with regulators to improve the baseline areas of care that failed before and during the pandemic.
Staffing levels, worker pay, infection control, communication with family members, and visitor access — these are the blocking-and-tackling areas that must improve if we are to provide the kind of care that our elders deserve, and if the nursing home sector wants to rebuild trust with the public.
Quality of life focus
For me, one of the most enlightening moments on the nursing home beat came during my September interview with Melody Taylor Stark, whose husband Bill spent years as a long-term care resident.
As someone who covers the space from the 40,000-foot level, tracking changes in reimbursement and investment and regulations, it’s easy to lose sight of the fact that there are countless real people — both residents and loved ones — who end up dealing directly with the consequences of big-picture decisions.
The stories of isolation and loneliness during COVID-19 have hopefully brought that human impact front and center to everyone who follows long-term care policy and finance. But on top of that, Stark’s experience showed the very real ways that nursing home residents and their families can find normalcy in a situation no one ultimately wants — having to live apart from someone who requires around-the-clock nursing care.
For every heart-wrenching detail of Stark’s struggles to secure a safe and comfortable home for her husband, there was an equal grace note about the people in LTC who went above and beyond for the couple: the tech-savvy CNA who could troubleshoot a faulty phone, or the dining staff who set up a special date-night area so they could simulate their trips out to dinner.
Operators and the federal government have stepped in to provide some of those touches during the pandemic, with grants to purchase tablets for video chatting and create safe areas for outdoor visits.
But that raises the question: Why did it take a global disaster to make the facilitation of virtual interactions for nursing home residents a top priority? Grandparents and friends have lived thousands of miles away from their grandkids and old coffee buddies for generations. But only now are we collectively understanding that nursing care means not just IVs and wound care and medication, but maintaining the bonds that make people feel loved and human.
Stark’s mantra about her experience navigating the system, “quality of life is medically necessary,” has stuck with me since our conversation.
We’ve seen the effects that loneliness and isolation have taken on nursing home residents, even those who managed to avoid COVID-19 infection and death. The best operators will embrace that mantra fully in 2021, and realize that visitation — both in-person and virtual — is as vital as dialysis and ventilator care. The little touches that make a health care facility feel like home, from a sitting area that feels a cafe to sorely needed private resident rooms, will go from a flashy marketing pitch to the baseline level of care provided at properties across the country.
That almost definitely won’t happen to the extent it should over the next 12 months alone, but the pioneers that pave the way will be remembered as the ones who most fully embraced the lessons of post-acute care’s annus horribilis.
Home health swipes volume — with government support
In general, the idea that home health can completely replace institutional post-acute and long-term care will likely remain a pipe dream for years to come.
The vision of hospital-at-home services, while obviously promising for quality of life, makes plenty of unlikely assumptions. Perhaps most prominently for the types of people who require Medicaid-funded long-term care, the very concept of what home looks like represents a stumbling block: Some may not have a home where aging in place is viable, and others may not even have any home of their own in which to receive treatment.
As is the case with so many medical advances and breakthroughs, high-acuity home health innovations will first benefit those with means, and eventually trickle down the economic ladder.
But for now, there’s much lower-hanging fruit for home health providers looking to capitalize on shifts in consumer sentiment amid the pandemic: the 10% to 20% of post-surgical patients who could either go home or elect for institutional skilled nursing care.
As early as this past summer, leaders at top home health providers announced their intention to target such “jump-ball” business.
“Even if everybody this time next year is on a vaccine, I think the idea of wanting to be home, to the safer, to be away from places of infection [will remain],” Paul Kusserow, CEO of home health giant Amedisys (Nasdaq: AMED), said in late June. “It’s going to be a long haul back for the SNFs.”
Bruce Greenstein, chief strategy and innovation officer at fellow home health heavyweight LHC Group (Nasdaq: LHCG), told our sister site Home Health Care News that SNF diversions to home were already “picking up more steam” that same month.
“This is something I hope sticks around long after COVID is over … whether home health is engaged formally in a SNF diversion program or unknowingly participating,” Greenstein said.
Those predictions have already borne out in reality according to a September analysis from Avalere Health, with home health discharges seeing swift recovery from declines during the first peak of the pandemic — without a similar bump back for skilled nursing facilities.
“The analysis further indicated that the skilled nursing industry has experienced a more drastic and lasting decline in patient volume relative to total hospital volume and discharges to home health (where rebounds were observed beginning in May),” Avalere observed.
Home health providers themselves saw evidence of the effects during the summer, with admissions at Amedisys remaining steady despite declines in surgeries, a primary source of referrals.
“We have not seen a material recovery in elective procedures, yet we have seen a significant recovery in our admissions, which means we are winning market share and new referral sources,” Kusserow said in late July. “Our admissions would also suggest that we are starting to realize the trend of patients wanting to avoid admission into SNFs and other facility-based settings. It is without a doubt that the home is the safest place to care for patients.”
Encompass Health Corporation (NYSE: EHC) experienced a similar pattern, with referrals coming in at 98% of normal during the second quarter.
“All of that would lead us to believe that we’re getting some SNF patients that we wouldn’t have otherwise gotten, particularly directly from physicians,” April Anthony, CEO of Encompass’s home health and hospice business, said this summer.
Even a home health partisan like Kusserow acknowledges that the short-term impact of the siphoning effect may be limited.
“We think now, obviously, that business is going to shift into the home,” Kusserow said. “We also think there’s actually another 10% to 20% — probably close to 10% — that, if we could add some custodial care to it, we can take care of these patients quite well. We need to be able to figure out how to add that custodial piece, and there’s a big ability to steal share.”
But in an era where occupancies already sit at record lows, and even a vaccine may not restore patient confidence in safety at nursing homes in the near term, an additional 10% to 20% decline over the coming year could have substantial effects on nursing home operations.
What’s more, potential residents and their families aren’t the only ones who have lost faith in SNFs: State governments around the country, seeing the death tolls and the infection control failures in nursing homes, are beginning to question why Medicaid typically favors institutions over community-based services and supports.
While the federal government looks to flex its enforcement muscles under a new administration, states will start to take a hard look at the incentives baked into their Medicaid-funded programs for the elderly and people with disabilities.
If nursing home operators don’t take seriously the mandate for change from outside the space, that 10% to 20% diversion target could start to get a lot larger this year — and in the decade to come.
