As many in the nursing home sector pursue opportunities to add additional service lines to diversify their offerings, and potentially build new revenue streams, Ignite Medical Resorts has stuck to doing one thing well — and so far it’s paid off.
The short-term rehabilitation and nursing care provider has turned the traditional post-acute experience on its head with “luxury resorts.”
Ignite’s SNF footprint has reached 14 facilities across six states with facilities in Illinois, Wisconsin, Kansas, Missouri, Oklahoma and most recently Texas.
“I think traditionally a lot of operators try to do everything … This is a tough business and if you’re swimming upstream and trying to be unique and different and really plug yourself into the hospitals and physicians and the managed care companies, we wanted to have a sole focus and really help our teams understand what we’re wanting to do,” Ignite CEO and Co-Founder Tim Fields said on a recent episode of the Skilled Nursing News podcast Rethink.
Fields believes the future of skilled nursing will depend on reimbursement driven by value through quality and outcomes. Additionally, getting closer to managed care organizations, being better partners with hospitals and ultimately continuing to be replacements for higher cost settings like acute rehab and long-term acute care hospitals (LTACHs) will be crucial for nursing homes.
“There’s many patients in our markets today, and many markets across the country, that our industry can provide the same level of quality care at a cheaper cost,” he said.
Highlights of Fields’s podcast, edited for length and clarity, are below, and if you like what you hear, be sure to subscribe on Apple Podcasts, Google Podcasts, or SoundCloud.
On Ignite’s model and how it will impact skilled care in the future:
I think from the get go we wanted to try to do something a little bit different and also try to stick to one thing. So for us, the core of our business has been trying to find markets across the country then really focus on the Midwest, pretty much right up and down the country. I would say the Central Time Zone because now we’re in Texas and Texas is not the Midwest.
In an area where we’re close to we can have somewhat of a regional, divisional presence, but looking for markets where our model is going to fit … we usually are in major metro markets by large hospitals where we can get the right staff and the types of patients that we’re trying to go after.
I think for us, doing one thing and doing it well for us was really about a focus on short-term rehab.
We are seeing a lot of stuff that’s continuing to come forward as health care continues to evolve and as post-acute continues to evolve.
Medicare Advantage continues to grow in almost all of the markets that we’re in and national statistics show that it is growing across the country, and we’ve got to continue to get better at those partnerships and those relationships because that’s, I think, a big part of the future over the next 3, 5, 7 years. I think the future is going to be a lot about reimbursement and how we can add value through quality and outcomes, how we can get closer to our managed care organizations, how we can partner better with our hospitals and how we can continue to be replacements to higher cost settings like acute rehab and [long-term acute care hospitals] LTACHs. There’s many patients in our markets today, and many markets across the country, that our industry can provide the same level of quality care at a cheaper cost.
I think our setting can step up and meet that need of a higher acuity patient. Our types of patients that we were taking care of five to seven years ago: knee replacements, hip replacements, more ortho focus is being served in home care now and in home health. We need to continue to swim upstream to higher acuity patients in part of the continuum where we can fit in. Our cost structure is going to be higher than home health care, but it’s cheaper than acute rehab and LTACH … we can be part of the solution as health care continues to evolve across the country.
On Ignite’s strategy to becoming a quality referral partner for hospitals:
Well I think it’s important to first start with health care is local. So you have to really understand the markets, you have to really understand your hospitals, you have to really understand their goals.
Some of our hospitals that are for-profit are all concerned about their length of stay days on the in-patient side, and how do I get patients out quickly and how do I be the fastest and easiest to work with. Some of ours are in advanced care models like bundled payments and ACOs, and it’s about the value and the outcomes in terms of how we’re managing clinically and financially with them. Some of our hospital partners are academic medical centers and it’s the types of patients that they’re getting, whether it be oncology or wound care, that we’re a part of that solution.
I think that you have to really understand what is it going to take, what does success look like in that relationship with your hospital or physician partners, and how do you plug in and tweak your operation to that.
We pride ourselves in trying to allow our teams to really have some flexibility to understand that in certain markets I can staff differently.
I think Covid has continued to make that I think a bigger priority, I think we got closer to our hospitals during Covid. I think additionally a lot of our hospitals take risks … We’ve been banging on their doors to try to be alongside of them in that risk sharing, both on the upside and downside risks. We want to be a clinical and financial partner with them.
A lot of our hospitals are really stepping up to be amazing resources for us both during Covid and after Covid to providing amazing physician support, nurse practitioner support, education, helping us build clinical programs for managing chronic disease … understanding that these are the types of patients I have that we need your setting to take care of.
I think Covid just made us work closer together and our goal is to continue that process and continue to be aligned right right by them.
On why Ignite entered into the state of Texas:
This deal was very attractive to us because it’s four major metro markets inside of Texas, San Antonio, Houston, Austin, and the Dallas Fort Worth area. We can walk in day one and there’s very little besides some carpet cleaning and lightbulb changes to make these buildings really shine … It’s also a hybrid deal for us. We’ve got a lot of creative solutions here on earnouts, refinancing and purchase options. It extends our relationship with LTC Properties, whose continued to be creative with us and find flexible and creative solutions so that we can mutually grow. So I think as we’ve also come out of the Covid pandemic it’s all about how we creatively look at our certain deals and what makes sense.
We’re still very bullish on building new facilities. We’ve got a facility we’re hoping to get in the ground here in St. Louis this summer for breaking ground. Construction has been more difficult with some of the pandemic and some of the inflationary costs and the cost of lumber and cost of the trades. So we have pivoted a little bit more to some acquisition stuff and this is a good deal for us both financially … and it extends our reach. We’re already in Oklahoma so we’ll continue to go south and we’re very excited to work with our Texas teams.
On how Fields anticipates the proposed cuts to Medicare funding may impact Ignite and the industry as whole:
Well, it sucks. Let’s start there. I’m not sure the logic looking at our industry nationally and saying, ‘Hey let’s try to cut reimbursement.’ The government’s been helping us with stimulus and grant money for a reason. Covid drove up our nursing supply costs, our staffing costs have gone through the roof, and inflation has caused every category of expense to rise — whether it be food, utilities, or anything else that we buy.
So to cut reimbursement while we have significant rising expenses just seems a little tone deaf.
I do think that obviously reimbursement needs some form of modification. I’d like to see it tweaked more towards pay for performance. PDPM, while it reimburses for acuity, doesn’t take into effect quality. If you have better staff and better technology and take better care for the patient, why not argue that you should get paid more than the people that don’t.
To me it fundamentally doesn’t make sense that a one-star building that’s 40 years old and has all semi private rooms, keeps patients for 60 to 90 days and has a 40% rehospitalization rate, gets paid the exact same amount as a beautiful new building, has all private rooms has a low length of stay, low rehospitalization rates, good customer service scores.
It doesn’t work like that in any other industry, usually quality and payment are aligned, and I’d love to see the government figure out how to do that because I do think that incentivizing quality is really where I think payment reform should be.
CMS just gave the managed care organizations, the Medicare Advantage plans and 8% increase and us a proposed 4.6% cut. I’m not sure how it incentivizes quality care at the bedside to continue to put more money in the hands of the insurance companies and less in the hands of the operators.
On whether Fields sees Ignite ever evolving outside of short-term rehab:
I think right now we’re trying to stick in our lane. It’s not easy to do what we’re doing every day. We don’t want to distract our executive teams and our facility based teams with that.
There’s some innovative models, I think, that are coming out. [SNF-at-home] has always been intriguing to me because I think that I see it more as a complement to what we’re doing than a competitor of what we’re doing.
I think maybe at some point we move into that space to extend our model into the home a little bit more, but I really feel that’s our way to help with some of our managed care organizations. You can shrink that entire episode through having more high acuity level care at both the skilled nursing setting and the home setting. So I think it could be a great complement to us. It’s still on the bleeding edge and so we’ll see where that goes, but other than that, we’re going to try to continue to do what we try to do really well every day, which is to be the best in the communities that we serve, both clinically to our patients and culturally to our employees.
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