For some nursing home providers, adding new business lines and more brick-and-mortar locations ensures greater longevity by providing better cushioning against larger economic forces. This philosophy allows for a lot of freedom when growing the business, and it keeps nursing home operators from sitting still in a challenging and constantly changing environment.

According to Leslie Campbell, COO with Touchstone Communities, reaction mode is no longer a viable option for nursing homes, as the pandemic has left its mark on the sector in both big and small ways, forever.

Diversifying businesses to stay nimble can be a tricky proposition for nursing home operators as they start out with expansion plans, so it’s important to let the company’s mission and vision be a guiding force, said Campbell. Having a mantra around every big project, whether it is an acquisition or the launch of a new business line, ensures that people remain energized to stay on board and see the project to fruition.

And this approach has meant that Touchstone has been quite successful with its growth and diversification

In January, the San Antonio, Texas-based operator partnered with Longevity Health to offer institutional special needs plans (I-SNPs) to its residents, and acquired four new communities in the spring. In June, the operator accepted its first patients for a newly constructed facility in Brownsville, Texas and has worked on another new build in Montgomery County, near Houston, Texas.

“For us, the writing was on the wall,” said Campbell. “The environment was moving in a direction that mandated we not sit still … if we sat and did nothing, we would not be viable.”

Campbell spoke at WTWH Media’s Continuum event in December, which brought together leaders from across the care continuum, including the skilled nursing industry.

Meeting the VBC challenge

The meteoric shift toward value-based care, from traditional fee-for-service Medicare to Medicare “replacement plans,” along with revenue disparity that came along with that change proved to be a major factor in an already difficult environment for the sector, Campbell said.

“Suddenly we’re being held accountable for outcomes outside of our four walls,” she said. “We had to do something in everything that I mentioned, such as the [Institutional Special Needs Plan, I-SNP], hospice, home health – everything but pharmacy has happened since 2020.”

About four years ago, Touchstone didn’t have in-house expertise for such business lines, and was instead looking for strategic partners to align with for access to capital and human expertise to help them build managed care programs out, as well as projects related to hospice, home health and pharmacy services.

For Touchstone’s I-SNP, those closest to the bedside needed to have an appropriate understanding of the program for it to work well, she said, and there had to be a paradigm shift with multiple business models being under one roof.

Aftercare as part of the I-SNP model is a perfect example of this paradigm shift, she said.

“Aftercare is housed out of our communities. [Caregivers are] thinking, ‘why do I have to do this? We’re not getting any reimbursement for this.’ They don’t understand the big picture and the reimbursement world,” said Campbell. “There’s a necessity to make sure those closest to the bedside of the resident and patient understand the ‘why’ behind some of these shifts.”

Extending influence and finding the right partners

On the opposite end, partners for such ancillary services need to have an understanding of a nursing home’s core business, which is the driver for all these other businesses, she said.

“We’ve had some regulatory challenges because of caregivers and [people behind] these business lines not understanding the regulatory requirements. We’ve been able to remedy that with onboarding and training,” said Campbell.

The pandemic provided an opportunity for Touchstone to get its arms around a “best in class response” to the public health emergency, she said, while also allowing them to reposition the company.

Touchstone had essentially two tracks, two teams, which were at the same time responding to the urgency of the moment while also evaluating the market and opportunities that would inevitably come once the PHE ended, said Campbell.

The operator wasn’t about to relinquish care and outcomes to a third party where Touchstone didn’t have a big influence or control, she said. This necessitated growth with new builds and also acquiring some distressed properties.