Leaders at nursing homes could create long-term value for their organizations if they adopted a population health focus, empowered local leaders and pursued actively value-based purchasing models.
That’s according to a report published by CliftonLarsonAllen (CLA) earlier this month.
In an industry facing seismic changes, SNF operators should seize strategic opportunities, empower local leadership, and jump into areas for growth potential, including the maturing market for institutional special needs plans, or I-SNPs.
Incorporating behavioral health to create a more robust clinical plan is a must too, with such needs growing in the nursing home space, with regional density focus being more important than ever too, considering state Medicaid rebasing, the CLA experts noted.
Identifying a niche requires operators to adopt a “payor mindset” while forging this new path, CLA Principal Stephen Taylor said. Taylor served as the author for this report.
“As the healthcare landscape moves toward value-based models, payors are increasingly focused on driving outcomes through medical utilization,” noted Taylor. “SNFs can align themselves as valuable business associates by understanding and tracking clinical [key performance indicators] KPIs.”
Operators can negotiate capitation reimbursement rates, gain access to plan risk pools and explore ownership in plans by actively participating in value-based models like the I-SNP.
Special needs plans of all types have seen enrollment substantially increase to 4.6 million beneficiaries in 2022, CLA found, compared to 3.8 million in 2021. Of total Medicare Advantage enrollment, special needs plans account for 16%, a jump from 11% in 2011.
“Creating conduits” to more directly access insurance premiums also means a more direct route to securing fair compensation for SNF care in a value-based care model, Taylor said.
The nursing home industry is experiencing a transformative shift, the report said, forced to change through existing regulatory standards and forthcoming minimum staffing requirements.
“As the traditional fee-for-service (FFS) Medicare system continues to evolve, it becomes increasingly critical for SNFs to transition into the value-based care game,” he said in the report.
When discussing behavioral health in the nursing home industry, Taylor said this service is seeing a nationwide push, with increased focus from federal policymakers. CMS has released a proposed rule calling for increased behavioral health access for MA plan beneficiaries, while geriatric behavioral health care continues to be top of mind at the federal level.
Recent data, according to the CLA report, indicates that new SNF admissions are increasingly dealing with major depression and anxiety disorders.
New models are being tested right now to integrate primary care and behavioral health too, allowing for a more continuous coordination of care.
Regional density doesn’t just mean brick and mortar locations, Taylor said in the report. It also means increasing clinical competency, with an understanding of what the local market needs in terms of speciality services.
“Specialty programs are a gateway to success,” Taylor said. “Analyze the pain points of hospitals, assess local market needs, and track outcomes. Armed with this knowledge, create targeted programs that address challenges head-on.”
Abandoning a top-down directive approach in favor of empowered local leaders ties in with regional density. Specifically, directives are decentralized, with local leaders using digital dashboards to facilitate company wide initiatives. It’s one way operators can adopt a “sophisticated problem-solving type of mindset,” Taylor said.
This would also mean extreme transparency, he said, sharing financial information with administrators and executive directors.
Other options to shake up the SNF business model: hire an operations advisor, develop a strategic financial model that aligns with the company vision, and invest heavily in an administrator-in-training program while offering competitive pay.
“Some organizations are offering significant compensation packages, including six-figure salaries with additional incentives and bonuses. These emerging models challenge traditional expectations, and their popularity should be considered,” Taylor said.
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