In this Payment Perspectives interview, Skilled Nursing News is joined by Joel Theisen, CEO and founder of Lifespark, and Erin Hilligan, VP – Program Execution, Lifespark to talk about the steps providers can take to prove their value to payers in today’s evolving payment landscape. They discuss how technology is helping operators navigate this shift, and they also share perspectives on what the future of the payment landscape will look like in the years ahead.
Skilled Nursing News: What do health care providers need to do differently when it comes to payment evolution?
Joel Theisen: Embracing global risk should be a universal commitment. Shifting to the skilled nursing perspective, they’re noticeably absent from the decision-making table. It’s apparent that they lack a prominent role in the design of value-based payment structures. PDPM essentially encapsulates them, making them adhere to its framework. It’s somewhat of a tail-wags-the-dog scenario. Their episodic approach versus the preferred longitudinal approach complicates matters. The challenge lies in them securing appropriate compensation for the undeniable value they generate. While PDPM and similar models aim to address this, the current landscape is evident in the struggling state of SNFs.
With three decades of experience, I hold the belief that to genuinely advance the Triple Aim, tackle population health, and reshape the 19% GDP cost curve, a profound commitment is needed. It’s essential to assume comprehensive total cost of care risk, comprehensive MLR risk or comprehensive global cost risk … Full dedication to the holistic, long-term well-being of this population is crucial, which aligns with my conviction of annual global risk encompassing full total cost, both upsides and downsides, representing nearly 100% risk.
It’s about wholeheartedly embracing global risk, which signifies taking on the responsibility of the entire spectrum of care costs, with a considerable level of risk involved, as close to full as possible.
How can skilled nursing operators in particular prove their value to payers?
Joel: Establishing the utmost clarity around the impact of performance on effectiveness and overall cost is a critical step. When there’s a level playing field, when there’s no distinction in precisely defining efficacy and value, it becomes exceedingly challenging to advocate for or secure an increase. It’s essentially the responsibility of the SNF sector to deeply comprehend the factors propelling costs and to ensure they are compensated for delivering value.
Now, adding to that, something worth contemplating is the current scenario in the market where hospitals are facing significant challenges. They’re grappling with the shortage of SNF beds, making it arduous to transfer patients to skilled nursing facilities or transitional care units (TCUs). This situation is particularly prominent in places like Minnesota, which is receiving ample media coverage.
Hospitals are caught in a bind, holding onto highly acute patients for extended periods, leading to dissatisfaction due to inadequate compensation. Conversely, TCUs are plagued by staffing shortages and an insufficient reimbursement framework, making seamless patient handoffs practically non-existent. This double bind results in both sides losing out, while costs continue to escalate.
The crux lies in the SNFs’ ability to not only capture patients but also deliver outcomes effectively, and eventually exert longitudinal cost control at the payer level. This is where they must articulate and highlight their value proposition with utmost clarity.
Erin Hilligan: Building on Joel’s insights, I’d like to emphasize a more focused perspective, particularly from the provider’s angle. People are increasingly seeking out the essential metrics to gauge performance. In conversations with payers, they’re keen on understanding critical aspects such as length of stay, the complete cost of care, end-of-life procedures, and the caliber of services and initiatives being developed within the skilled nursing facility to deliver value. While numbers undoubtedly tell a powerful story, it’s the actual groundwork and meticulous processes behind those numbers that truly shape the narrative.
If you can articulate these processes and share actionable information that allows others to witness the progress, then the numbers themselves will eloquently convey the story. Naturally, the focus is on scrutinizing the overall cost of care, but what they’re equally intrigued by is the methodology and strategy underpinning these achievements. Effectively explaining the ‘how’ is extremely important.
How do you see health care technology supporting the shift to new payment models?
Joel: I see two distinct aspects here. First, everything we’ve discussed needs to be executed through informatics, data insights and measurable outcomes. When it comes to the skilled nursing industry and even the broader health care sector, it’s evident that we’re lagging far behind. We’re adept at meeting regulatory and compliance standards, handling PDPM intricacies, and navigating extensive documentation. However, we struggle to effectively translate these efforts into tangible value propositions that showcase comprehensive efficacy. By efficacy, I mean achieving superior experiences, enhanced outcomes and reduced costs, with the emphasis often leaning toward cost reduction.
Now, the challenge with SNFs is that demonstrating cost savings is relatively straightforward within the confined realm of those initial days. Yet, it’s critical to comprehend the ripple effect beyond the SNF stay, particularly since neither the hospital nor the SNF is held accountable post-discharge, while the onus rests with the payer. This rings true whether for Medicare Advantage or dual-eligible clients.
Interestingly, most payer efforts are primarily directed at the hospital, leaving SNFs and even home care somewhat overlooked, which, as we know, is an underrepresented area. The avenues for success entail substantiating value through informatics and data, while simultaneously exploring expanded telehealth solutions.
The incorporation of increased telehealth holds immense promise. By enabling subspecialty care and enhancing access to critical services such as mental health within SNFs, we can significantly elevate the care experience. This doesn’t necessitate an overly intricate approach involving numerous remote monitoring gadgets or an array of passive technology solutions. Instead, focusing on facilitating direct access to specialized care via telehealth could be a massive leap forward.
Fill in the blank: “If I could change one thing about the health care payment landscape, it would be…”
Erin: …putting skilled nursing higher in the hierarchy of how health systems are paid.
Joel: …truly delivering the right dosings of monetary value to the full use case of the senior over time. The government should more strictly mandate those moving to risk-based contracting.
Fill in the blank: “The future of health care payment is…”
Erin: …disrupted — it’s not going to stay the same.
Joel: …a massive opportunity for us to get it right. Those that can figure out how to really make that change and that payment will help force that, or it’ll inspire it. To Erin’s point, it must change and it should change.
Is there an aspect of skilled nursing payments that you think is commonly misunderstood?
Erin: Absolutely. Whether it’s a misunderstanding or simply an oversight, it’s become evident to me that our current payment model fails to adequately address mental health concerns, which we’re encountering more frequently. There seems to be a misconception that the PDPM algorithm, derived from MDS assessments, comprehensively covers a person’s needs. However, Medicare’s snapshot approach, while crucial, must also account for a broader longitudinal perspective.
In essence, there appears to be a missing piece if you will. As seniors age, their mental health requirements often evolve in distinct ways. I’m specifically referring to issues like depression, dementia, or other factors influencing mental well-being. My own impression is that the payment model hasn’t fully embraced the intricacies of these concerns or provided the necessary support. This is essential not only for the resident but also for their families who are navigating these challenges alongside them.
It’s important to recognize that mental health diagnoses extend far beyond a specific moment in time. Unlike, say, a healing hip, mental health comorbidities persist and continue to affect recovery and well-being. Yet, I don’t believe these issues receive the attention they deserve within the spectrum of care delivery. There’s a growing population dealing with these complex needs, and it extends beyond a simple health care crisis.
Consider someone who finds themselves homeless and subsequently requires a brief stay at a skilled nursing facility. We must ask, why did they end up homeless in the first place? What led to the injury that necessitated hospitalization and subsequently skilled nursing care? And even if they do not wish to remain at the facility, what provisions are in place to care for them after their departure? Addressing these situations holistically is key, as they underscore the multifaceted challenges we face. Unfortunately, it seems our current payment model doesn’t yet encompass this broader perspective.
We should be devising a model that looks beyond the immediate and dives into the nuances of individual experiences. It’s about caring for everyone in a comprehensive manner, a perspective that, in my opinion, our current payment model might not fully embrace.
Joel: It’s a common trend to see skilled nursing facilities, TCUs and post-acute care in general take a beating from all directions. It’s as if they’re the market’s punching bag. Even President Biden had a go at them. Everyone’s joining in, saying they’re worthless, they need to be cut out, and they’re terrible. The issue here is that many of these critics are missing the point entirely. Yes, there’s room for redesign, but it’s far from the black-and-white scenario they’re painting.
Let’s talk about misunderstandings. First off, the knee-jerk reaction seems to be, “Let’s scrap the SNF model entirely.” But hold on a minute. What’s the alternative for people in need of a transition point? We can’t just dump them on the street. It’s absurd. The second layer of misunderstanding is how we’re not using these facilities to their fullest potential within the larger ecosystem.
Remember that three-day stay rule? It’s outdated. We could be admitting patients directly to SNFs and TCUs for lower-cost rehab or maintenance stays. Rather than misuse our assets, why not use them strategically? The core problem is the misuse of these facilities and the failure to grasp their intended role and value in the health care system.
What strikes me is how we’re creating more problems than solutions. It’s an ecosystem that needs holistic solutions. It’s about consistent payment methods across the continuum, not having one model for [home health] PDGM, another for PDPM, and another for value-based schemes. How can we ever achieve consistency and a unified client experience with such a chaotic mishmash of regulations, EMRs, and payer rules?
This situation perpetuates a cycle of turf wars, where everyone protects their interests while simultaneously criticizing others. The bottom line is, these misunderstandings are causing more harm than good. We need a comprehensive approach that truly serves patients across the entire spectrum of care. And that, my friends, is where our focus should be.
