Michael Bailey is president and CEO of American Health Partners. The company provides residential long-term and rehab care through American Health Communities, as well as health plans designed for nursing home residents through American Health Plans.
Through the Value-Based Care Series, Bailey shares key elements of the American Health Plans model, including the TruHealth approach to care and a joint venture ownership approach with nursing home partners. Bailey explains the three things he believes are needed for a successful value-based care network, how skilled nursing operators can get off the “fee-for-service treadmill,” and why he thinks the shift to value-based care is not happening fast enough.
In one sentence, define what value-based care means to you.
I see value-based care as the alignment of goals between the provider and the patient in order to incentivize proactive, preventative care at the bedside — ultimately improving the overall health and quality of life for that individual.
What does a value-based network need to have in place in order to be successful?
Skilled nursing providers need three key items to successfully transition to a value-based care model: a strong insurer that believes in its partners, a medical provider and a VBC-conscious nursing home operator.
An insurer that believes in its partners and has the acumen, financial strength, and willingness to invest offers providers latitude to implement a system of value-based care. That insurer is key, first and foremost.
Secondly, the medical provider, which is TruHealth in our case, provides access to advanced practice providers with the knowledge, the appropriate infrastructure and the ability to come into a nursing home, in particular, and collaborate with the clinical staff. By delivering their value proposition, the provider will deliver proactive person-centered care that keeps those individuals healthier and reduces unnecessary hospitalizations.
The third element, which is unique to the skilled nursing industry, is a nursing home operator that embraces the value-based model of care. The operator must be willing to let the medical provider come in and disrupt the status quo of a fee-for-service model to install a better system of value-based care models that will improve the health and quality of their residents.
All three of those items work in concert. Value-based care then incentivizes a provider’s time in a way that fee-for-service cannot. Simply put, it allows providers to spend more time with the patients and focus intently on the patient’s health situation while delivering a care model that’s tailored to that individual patient.
In our case, the TruHealth team of advanced practice providers has expanded the capabilities of the existing clinical staff in the nursing home. We work collaboratively with the nursing home staff and the patient’s doctor, and the TruHealth team is thereby enhancing and aligning the resources to the needs of the patient at that bedside. This innovation makes a real difference in the lives of our patients. It’s a key to success in achieving superior clinical outcomes.
What are the biggest hurdles to achieving value-based care?
The transition to value-based care is a dramatic change. It’s innovative, and it requires a paradigm shift. Switching to a value-based model is complicated, and nursing home operators are just like anyone else when it comes to the difficulties of change. We believe providers need a partner that can help them make that leap.
The SNF operator needs a partner that can create and deliver a model of care suited to the needs of the patients and their residents. They need a clinical partner like TruHealth that will work alongside the SNF management team to enhance the patient’s quality of life. Our TruHealth clinical team delivers coordinated proactive care and eases the clinical burdens of the health care staff and facility management of these skilled nursing operators.
Do you see any downsides to value-based care?
There’s a lot of noise in the marketplace made by players in this space that make claims they can’t back up. As a result, it’s difficult for the patients and nursing home operators to cut through all of that noise. The graduation to value-based care requires staying power and providers with one foot in will not succeed.
Choosing the right partner can make all the difference in the world for a nursing home operator who decides to make the transition to value-based care. And with all of the aforementioned noise, that decision requires caution.
When I say partner, I mean a literal partner, I don’t mean it in a loose sense. Our model is a provider-owned model, meaning that it’s a joint venture between us and that nursing home operator. Both sides are investing capital into the equation.
There are some value based models that provide a financial incentive to the Skilled Nursing operator, they get that, but the SNF operator doesn’t own the plan. The insurance company owns the plan, they’re just contracting with the operator. That’s a very fundamental difference.
In this case, it’s like they own the plan, they own the Medicare Advantage plan in partnership, in a joint agreement with American Health Plans. I just wanted to clarify that point, because it’s so important.
What role is technology playing in the shift from fee-for-service to value-based care?
In general, health care is going through a massive digital transformation, and TruHealth operates with more technology today than ever before. It is there to help us improve our efficiency and our effectiveness at the bedside. My belief is that great care is delivered at the bedside by wonderful people. Any technology embraced on the value-based side of things allows our clinicians more time at the bedside.
Technology on the insurance side and technology on the value-based care side need to work in concert together, but the two systems have never been designed to do so. Our approach to this is to leverage our perspective as an owner/operator and an insurer to navigate the varying levels of expertise and budgets in technology.
We come in as TruHealth to make that simple and integrate with what those providers have, taking that burden on ourselves. The skilled nursing operators do not have to install any new software or manage data migrations. It’s a burden that we take on as a provider and partner to lessen their need for technology on their side.
Historically, do you think it’s been hard for SNFs to get a seat at the table when it comes to value-based care, and if so, why?
Yes. For years, skilled nursing operators have been on a fee-for-service treadmill. That’s been going on for a long, long time. Nursing home operators have been looked at by large insurance companies and CMS as custodial caregivers, not innovators. Value-based care is a dramatic change, and I believe it’s a watershed moment for our industry.
In the fee-for-service world, nursing home operators and owners have been on the outside looking in, trying to get a piece of the value-based pie that someone else owns. We believe in the need to control the pie as best you can and control your company’s future as best you can. That’s why we are committed to a provider-owner asset model — it’s a game changer for the industry.
In operations, it works out nicely as the people in an organization work directly with our team to install this program. This results in an insurance program and a clinical model that provides better care for the residents, more peace of mind for the residents’ families and a better financial performance for the nursing home itself. It’s one of those rare cases where you have a win, a win and a third win for those three attributes.
What role do you think SNFs should play in the value-based care landscape?
It’s a complicated world. As I’ve alluded to before, operators need a partner with expertise, energy and focus. After working with roughly 400 nursing home facilities, we understand the potholes and challenges, recognizing that every circumstance is unique. Every state is unique. To navigate each one effectively, it takes time at the ground-level working hand-in-glove with these partners.
What do SNF operators have to do in value-based care to get a fair financial reward?
Owners get a share in our model and without divulging the entire essence of that model, they get all of the financial rewards that come with it. As a partner we don’t partake in any shared savings resulting from excellent clinical care because we’re not housing the patients. Owners see every dollar that comes and goes, and the financial rewards that come with delivering good care are given back to the buildings who so desperately need them today.
Everyone’s struggling with staffing, so we literally enjoy seeing where those rewards go and how that transitions back into those facilities. It builds trust, it builds momentum in those facilities and they want to do better every month and every quarter.
Do you think the shift to value-based care is taking place fast enough? If not, what needs to change in order to facilitate a faster transition?
In my opinion the shift to value-based care is not moving fast enough.
When you consider the fact that nationwide, only about 10% of the eligible individuals living in nursing homes are members of a Medicare Advantage plan, receiving a value-based care model, you realize there’s an enormous opportunity out there. With that said, however, it’s difficult to move fast in making this transition because as we’ve discussed, it’s not easy to do.
It requires an insurer that believes in you and is able and willing to support the transition financially. You need a medical provider that has the ability to execute in a nursing home environment and deliver great care to the residents. Then you need a nursing home operator and partner committed to the model.
Then, putting all these elements together is difficult and it takes time. I think the future is very, very bright for value-based care, and it is having a profound impact on the nursing home industry today. It’s an innovation that puts the patient at the center of the model of care and the bottom line, value-based care is the right thing to do because our patients and residents deserve it. They receive an enhanced, coordinated level of care and nursing home operators who make this leap will reap the financial reward. I think the future is bright.
