Last week, Cascadia Healthcare officially took over management of three facilities formerly operated by the Evangelical Lutheran Good Samaritan Society, with the remaining six buildings in the transitioning portfolio scheduled to follow suit in April and May.
The transition process is going smoothly, with each building presenting a “microcosm of opportunity,” Cascadia President and CEO Owen Hammond told Skilled Nursing News at the recent National Investment Center for Seniors Housing & Care (NIC) conference in San Diego.
As Cascadia expands, the Eagle, Idaho-based provider is focused on creating a more integrated care continuum, including by expanding the company’s new senior living platform as well as through the Medicare Advantage Institutional Special Needs Plan (ISNP) that launched about one year ago.
Executives with the company believe that the future of skilled nursing lies in a more seamless care continuum supported by a stronger partnership of public and private sector entities. And that requires that SNF operators push back on certain elements of value-based care even as they increasingly participate in those frameworks, and that they commit to evolving how they operate, rather than protesting the difficulties of running buildings on outdated business models.
“If what we have is a public-private partnership to provide care to residents who are beneficiaries of certain entitlement programs, we need to figure out a better way that it all works together,” Steve LaForte, Cascadia’s director of corporate affairs and general counsel, told SNN.
Inside the Good Sam transitions
In January, the Good Samaritan Society announced its plan to exit 15 states, with Cascadia taking on buildings in Idaho, Oregon, Washington and Montana.
“We’ve done a lot of transitions with different operators, and I would say this has probably been the smoothest,” said LaForte.
Good Sam has been diligent in working out details with Cascadia, down to helping navigate last-minute “speedbumps” related to the telephone systems, according to LaForte.
Meanwhile, the Cascadia team has been assessing the facilities and their markets to identify paths toward operational improvements and value creation.
“[There is] a great opportunity for us to expand the presence in each of the markets,” Hammond said. “And some of that has been talent, some of that’s been finding specific niches that are needed in communities.”
The specific strategies and opportunities differ across the transitioning portfolio, he added, in part because the buildings are a mix of skilled nursing, assisted living and independent living. And in some cases, the different care levels are in separate locations, not on a single campus.
While this creates complexity within the new portfolio, Cascadia was attracted to the private-pay senior living component of the deal, as it gives the company a launching pad in this part of the continuum.
“I think that as the market settles down over the next 10 to 15 years, there’s going to be a higher need for that type of setting, and we want to be well prepared for that,” said Hammond.
A more seamless continuum
Cascadia’s addition of IL and AL was not only driven by a desire to meet future demand, however. Hammond and LaForte also see an imperative to create a more integrated care experience, to meet consumer expectations and align with how the U.S. health care system is evolving.
Already, Cascadia is seeing post-acute patients coming into the company’s facilities who could benefit from being stepped down to a lower level of care. If the company can provide that care within its own continuum, that is a way to ensure that these individuals are receiving the proper services, Hammond said.
“If there are issues, we can bring them back and transfer them seamlessly through the process, where there is less disruption for the families,” he said.
These intentions also are behind other moves that Cascadia has made, including its launch of an ISNP last year. The ISNP is owned and run through a partnership with Tennessee-based American Health Plans.
A key benefit of the ISNP is that nursing home residents who are members get access to more on-site care, including through nurse practitioners who can dedicate the necessary time to patients with the greatest needs.
“If one of them is sick, they may spend the whole day taking care of that one patient as opposed to doing rounds, so there’s just a lot more intimate care,” Hammond said.
As with any ISNP, reducing hospitalizations and hospital readmissions are key to achieving profitability — but Hammond emphasized that these objectives also dovetail with consumer expectations.
“They will want private rooms, they want to have a little more personal access to nurse practitioners and doctors, and they want to be able to have that here, in the setting wherever they’re at, instead of being shepherded from hospital to SNF and back and forth,” he said.
Indeed, enrollment in the ISNP is being driven in part by residents who see their friends and neighbors in the facility receiving nurse practitioner visits, and asking how they can also get access to these benefits, Hammond explained.
Educating the operational leaders within the buildings also has been part of Cascadia’s ISNP learning curve, and an area where progress is being made.
“We had one of our building CEOs who initially [said], ‘Wait, why do I want to do this? I’m not sure,” who now has gotten to the point where he’d love to see every resident in the building signed up for it,” LaForte said. “I think you start to see the accretive benefits of value-based health care and where we’re going.”
Hammond, LaForte and their colleagues also are weighing options for how to further integrate the senior living communities within the continuum, such as through the creation of an assisted living-focused MA plan. And, the company has a presence in other parts of the care continuum, including through its ownership of Bluebird Health, a home health business in the Boise market.
The home health investment was motivated by the fact that Cascadia had a concentration of nearly a dozen facilities in Boise. And while Hammond estimates that only about 10% to 15% of the Bluebird home health admissions are coming from Cascadia buildings, he said that the two companies “intertwine” in a valuable way.
A better way to work together
Cascadia has engaged in ground-up skilled nursing development in the past, but has hit pause on these efforts at the moment due to the financing markets being “a little bit chaotic,” Hammond said. The company is considering a sale of land that it owns in the Vancouver, Washington market, to wait for a more opportune time to build.
But the challenges in building new SNFs go well beyond the current financial impediments, Hammond and LaForte said. Navigating certificate-of-need requirements can be prohibitive, and simply determining demand in a given market can be tough.
For example, when Cascadia was building its two projects in Boise, there was “a lot of concern” about how the market would absorb an additional 200 beds, Hammond said. But those facilities filled completely, without causing occupancy erosion in other buildings.
“And so that made us realize that there was actually an unmet need that was out there that nobody could really know was unmet, because there’s no metric to see it there,” he said.
He hypothesized that demand for new SNFs is shrouded in part because consumers find the typical, decades-old SNF so unappealing, they opt for any alternative, including expense at-home or senior living care.
More creative financing mechanisms are needed to enable new SNF construction, Hammond and LaForte agreed. Some industry leaders have called for the Department of Housing and Urban Development (HUD) to offer new programs — including grants — to fund projects such as conversions to private rooms or upgrading tech infrastructure.
LaForte believes the HUD idea is “great” and that the government does have to be involved in some way to support the creation of SNFs befitting the 21st century.
But he and Hammond also emphasized that the skilled nursing model is fundamentally a public-private partnership, and this partnership has to be improved across the board. And that includes rethinking some of the basic premises of value-based care, such as frameworks that are incentivizing massive — but perhaps foolish — spending to divert people from SNFs.
“It is amazing to me how they will spend so much money trying to get people to a lesser level of care; they’ll spend 20 grand to furnish an apartment for somebody to get a Hoyer lift … and then within three weeks, they’re back in the hospital and then back into the system because they’re failing to thrive in that apartment,” Hammond said.
The government also should consider how to provide better safety nets for failing SNFs, he and LaForte argued. In too many states, financially distressed SNFs are simply shuttering, creating severe access issues that are particularly painful for people living in rural areas or who were receiving specialized care that is not widely available. Expansion of receivership models or other routes to transitioning distressed facilities to new operators would at least keep needed capacity in the system.
And the basic skilled nursing reimbursement model is broken, considering that payment levels are so often not enough to cover the cost of care, LaForte said.
Fixing this public-private partnership demands more proactive advocacy on the part of SNF providers, he and Hammond said, to break the cycle of reacting to crises. And private sector operators must also be willing to step up with new ideas and business models, not simply demand more dollars.
“It doesn’t take the government just throwing more money into it, but it’s how do we work together to create better models and evolving models [for] 2026, 2030 — whatever year you want to pick in the future — rather than 1989,” LaForte said.