It could be the next major trend in long-term and post-acute care, with benefits for both residents and operators: downsizing bed counts to better match demand and provide higher quality care.
Masonicare, a non-profit health system based in Connecticut, became the latest operator to make headlines with a plan to relinquish beds at its skilled nursing facility, as first reported by the Hartford Business Journal. If the provider receives state approval, it will see its bed count shrink by 97, leaving 260 remaining.
The goal, according to Masonicare CEO Jon-Paul Venoit, is to create as many private rooms as possible while also accelerating the organization’s pre-COVID push to provide care how and where people want it — whether it’s in their facility or their homes.
“It’s really looking at how the consumer trends have navigated us to this point,” Venoit told SNN. “But it also allows us the ability to really push what our strategy is — recognizing all the strengths we have to really capitalize on those trends.”
What was once something of a heretical idea — particularly in an industry whose finances rest almost exclusively on the ability to keep buildings full and, by extension, reimbursement flowing — has gained steam in the post-COVID landscape.
The year started with a report urging operators to consider giving up bed licenses to capitalize on expense savings and increased demand for single rooms from both residents and payers; the state of Ohio floated a plan to buy back bed licenses from operators, and SNN recently profiled a Florida continuing care retirement community (CCRC) that embarked on a $41 million project to convert its SNF to all private rooms.
SNN spoke with Venoit this week to learn more about Masonicare’s move to achieve addition by subtraction, and how it plans to use its other business lines to combat the lower demand for institutional care.
Tell me about how this plan came about.
Over the past four and a half, five years, we’ve embarked on what we consider our strategic direction for the organization. We, every year, reaffirm where we’re going. Part of our strategy was to rebalance our reimbursement. From a revenue perspective, back about five years ago, we were almost 70% Medicare and Medicaid, and the rest was either private pay or commercial.
We said: We’ve really got to readjust that to get ourselves better in line with being able to adapt to any market changes, or any legislative changes, or reimbursement changes. So that’s been really the crux of our strategy. There’s been some areas where we’ve looked to expand and grow, and there’s been some areas where we’ve decided to shrink or develop partners to acquire or take those businesses away from us.
And it’s worked very well. But as we’ve moved forward, this past year has been really [about]: What are we going to do with our nursing home from the perspective of: What’s the consumer looking for? How do we deal with infection control differently than we were able to during COVID? And what are we going to do with the reimbursement — or lack thereof — here in the state of Connecticut?
When we talked about it, we knew for a while that we were going to need to reduce our skilled nursing beds, and by doing that reduction, we’re looking — obviously the state, through the certificate of need process will tell us whether or not they approve it — at going from 47 private rooms to 110 private rooms.
That’s going to be done largely [through] reconfiguring all of our floors. We have 357 beds now, and to go to 260 will allow us to have really private rooms on every single floor. As we continue to combat COVID and what that normalcy brings, we want to still have that ability to cohort and have that ability to fight that battle a little bit easier with those private rooms throughout our system.
Now, the private beds themselves are not just for private pay; anybody, any resident would get that. So if they’re on Title 19, they still would. But we definitely felt this approach was in the best interest of those that we serve financially. It helps us and I think it gets us out of some of the challenges that were faced during COVID.
At Masonicare, we did a very good job at combating it through our system. But you still had restrictions that were set in place, through cohorting, that we had to navigate through and continue to navigate through. So it’s definitely been a challenge. But this new strategy that we’ve set forth, I think, will take us to that next level.
One of the other things that I will say is: Many of our existing residents within our residential living are looking for different accommodations on the skilled nursing side. We’ve really pushed very hard to bring this strategy to fruition for them, so there’s some great opportunities there.
For the financial benefits, is it on the expense side, the reimbursement side, or both?
It’s a little of both. We lose a significant amount of money on every single Medicaid resident. So, by doing this, [we] will reduce that. But, truth be told, we have our own home care company; we have our own assisted living. The market has shifted so drastically, and I think COVID is only enhancing that; people want to stay home.
We have our homemaker and companionship business that has grown exponentially because of what’s happened. We, in our strategy, realize that at our skilled nursing facility, the average lengths of stay have continued to drop, and the demand for the skilled nursing is not as robust as all of our other services — whether it be residential services, whether it be home- and community-based services — that we have focused a little bit more on enhancing.
Those are where we see the market going. I go around — or I used to before COVID, but now it’s just video — and ask a simple question: “Who wants to live in a skilled nursing facility?”
You don’t get anybody raising their hand. So if I could sit there and say: “I’m going to do everything in my power to try to keep you home as long as I can. Would you want that?” And obviously, usually, nine times out of 10, the answer is: “Yes, sign me up.”
It’s really looking at how the consumer trends have navigated us to this point. But it also allows us the ability to really push what our strategy is — recognizing all the strengths we have to really capitalize on those sides, too.
That’s a perspective that I think we need to hear more of from senior services providers — so often the different silos, like home health and nursing homes, see each other as the enemy. But COVID really exposed the benefits of being able to provide a wider range of options, both for resident care quality and for operational flexibility.
We say this quite a bit: We want to take care of you wherever you call home. And if that home is with us, fine. If that home is your home that you’ve been in for 75 years — fine, we’ll take care of you there. We want to be able to take care of you, and spread our mission of who we are as an organization, to anybody that needs these services, wherever they call home.