United Church Homes (UCH) is continuing to make progress on a recently announced value-based care play with health plan provider CareSource, while responding to the ongoing market and regulatory pressures in the nursing home space.
In June, UCH — with a portfolio of about 1,600 senior housing and care units, including 600 nursing home units — announced its partnership with Metta Healthcare, the parent company of Ohio’s Hospice and Pure Healthcare, to form the Radiant Alliance. The plan for Radiant Alliance to become an affiliate of CareSource is in the regulatory phase and proceeding smoothly, with the deal expected to wrap up by the first quarter of 2024, UCH CEO Kenneth Daniel told Skilled Nursing News, during an interview at the recent LeadingAge conference in Chicago.
“We are full speed ahead on developing the programs of integrated care, which is part of [our] complex health management continuum,” Daniel said. “[It] will be a seamless experience that will serve Medicaid beneficiaries from low clinical needs to high needs … and will be taking on financial risk for managing folks and looking to reduce hospitalizations, ED visits and premature nursing home placement.”
Daniel has undertaken active outreach in order to explain the organization’s work and recruit additional members for Radiant Alliance in certain states.
“And my work in particular has focused on Radiant Alliance’s vision to be a network of allied providers in some form or relationship with CareSource, with our group,” he said.
CareSource offers managed Medicaid plans as well as D-SNPs, which are Medicare Advantage Institutional Special Needs Plans for people who are eligible for both Medicare and Medicaid.
UCH’s affordable housing buildings serve dual eligibles, so its partnership with CareSource offers synergies and a chance to enhance service coordination for this population, Daniel said. The organization’s portfolio includes more than 2,000 affordable units.
United Church Homes also is working with a for-profit health plan provider in Ohio, Valor, on an Institutional Special Needs Plan (I-SNP), offering Medicare Advantage benefits to those who need a nursing home level of care.
Through these efforts, UCH aims to have Medicaid and MA health plans available to residents in both market-rate and affordable buildings; and these plans would support more integrated care through partnerships with preferred providers, while garnering financial upside for UCH and its other plan partners, if they can keep costs in check.
The idea is that this will be beneficial to residents and also will be beneficial to UCH, by having more residents on plans affiliated with United Church Homes versus commercial managed care plans that often offer challenging rates.
“We feel like we have the opportunity to provide targeted access with preferred providers who recognize our capabilities and our needs and are willing to enter into a more collaborative type of relationship, rather than adversarial — always pressing for more reimbursement or taking reimbursement away,” he said. “We understand that the value is generated with coordinated care that reduces utilization, and we embrace that. We see the future; we see it’s here.”
Not going to ‘fight the market’
In fact, UCH has seen the writing on the wall for many years, having first engaged in value-based care through participation in a Centers for Medicare & Medicaid Services (CMS) bundled payment demonstration project.
It was through that project that UCH and partners built out the necessary data infrastructure for value-based care, Daniel said. The bundled payment arrangement was fruitful for UCH, he noted, and the organization was disappointed when CMS discontinued the opportunity for long-term care providers to serve as conveners in the program.
But the same principles that drove success in bundled payments are still in effect. And of course a key principle is being able to reduce the use of unnecessary services – and therefore, reduce costs.
“We understand that the value is generated with coordinated care, that reduces utilization, and we embrace that,” Daniel said.
In selecting partnerships for such arrangements, Daniel said UCH looked to bring various components of value-based care to its capabilities “on the clinical/social side.”
And he emphasized that with managed care here to stay, organizations such as UCH need to find ways to succeed, rather than constantly battling with managed care payers for better rates and more favorable contracts.
“This is going to be stating the obvious [but] the entire system is moving toward this value-based care framework,” he said. “Our position is to understand where market pressures are going. Fighting the market long term is not a winning sustainable strategy. So how do we adapt, adjust, and figure out what these new arrangements might mean for us, where’s the opportunity for us.”
Getting to reap financial gains from an I-SNP involves a balancing act – and an understanding that financial gains aren’t always going to be immediate – or guaranteed.
“When these opportunities to partner with others and affiliate really makes sense [is when you] share the risk, share the reward, and learn from the process and get better at it,” he said. “And, at the end of the day, the goal is to create an experience for our residents where they can feel supported in the best way possible.”
These partnerships can lead to efficiencies in other ways too. Improved communication and collaboration — both through better monitoring of health data and staff and resident education — is a result of these partnerships.
“This sort of last-mile, hands-on [approach] that we have in almost all of our buildings now through service coordination is the key [to this resident support] because things change, day to day, week to week,” he said.
This effort has allowed for more targeted doctor visits and implementation of less expensive and yet more effective solutions.
“We want to get ahead of those things as best we can – that’s what these programs are designed to do. And this ultimately reduces the cost when you’re not fighting crisis management,” Daniel said.
Scale and ‘economies of skill’
And whether it’s the ability to enter an I-SNP arrangement or other affiliations, the scale – and diversification of services – of an organization has also been the reason behind the success of UCH’s various endeavors.
With a more than a 100-year history in long-term care, UCH has come a long way in growing its footprint and service lines. Currently, UCH owns or manages more than 80 communities in 15 states and two Native American nations, with assets in affordable housing, independent living, long-term care, rehabilitative care and memory care.
And Daniel has seen more openness in the sector to the shift towards collaboration, affiliation, partnerships and joint ventures – all strategies that have benefitted UCH, and which he observes ongoing throughout the space.
“We have a number of single sites that have grown huge over the years [and others that] are going into an affiliate relationship now,” he said. “So, there is a perceived ability to garner some operating efficiencies through scale, purchasing power increases.”
Daniel also spoke about consolidating executive roles as gaining “economies of skill” — a phrase he attributed to Ohio’s Hospice CEO Kent Anderson.
“Organizations don’t need to have multiple CFOs. They don’t need to have multiple medical directors,” Daniel said. “So over time as we look at these programs, more and more we are looking at opportunities for us to integrate the back office functions, which scale allows.”
Downsizing the SNF component
Given all the staffing and margin pressures amid changing resident profiles confronting the sector, UCH has shrunk its SNF presence, reducing about 250 beds over the course of last year. It divested a SNF and ALF in Grand Rapids, Michigan, in 2022, selling it to a for profit organization that had a large presence in the state, Daniel said. UCH also recently sold its original 100-year old campus, the Fairhaven Community, in rural central Ohio.
“Ten years ago, our strategy was to incrementally reverse and rebalance the portfolio through acquisitions, reduce licenses here and there, sell beds off, but Covid pushed it so fast,” said Daniel.
Medicare Advantage rates have also chipped away at any profits the skilled nursing assets could generate, so now UCH is looking to focus its strategy around a middle-market senior living consumer.
“The losses we were incurring on the skilled nursing side were just too much. So that’s part of an ongoing strategy,” he said.
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