Converting nursing homes to subacute: the frontier model.

Everyone in the nursing home industry knows that subacute patients are out there, and in growing numbers. The question is: what does the industry do about it? The Frontier Group is offering an answer.

The Frontier Group, a Boston-based health care company, is staking its future on developing and practicing what its founders are calling "extended medicine." This alternative medical model is designed to optimally respond to the demands created by growing numbers of patients who require 24-hour medical and nursing supervision for varying lengths of stay. Through extended medicine, each Frontier facility -- called a Center for Optimum Care -- provides a previously fragmented range of subacute and long-term care services in a continuum of care that offers a range and intensity of services going beyond the typical offerings of nursing homes, rehabilitation hospitals or home care providers.

Since its founding over a year ago, Frontier has acquired more than 900 beds in nine nursing homes in Massachusetts and Connecticut. It plans to add another 500 beds the first quarter of this year. The company looks for skilled nursing facilities ranging in size from 80 to 200 beds which do not have the range of services or clinical expertise capable of supporting subacute care. Committed to offering both long-term and short-term services in each of its centers, Frontier immediately begins a program to enhance clinical services in preparation for program development.

Frontier's management team has learned a great deal about the transition process and its impact on traditional nursing homes. For example, one of the mistake many operators make is to automatically convert 10 or 20% of the facility's beds to accommodate subacute care. According to the Frontier approach, it is essential to let the market tell you how many beds you can convert. Therefore, Frontier undertakes and implements, through market research (i.e., DRG analysis, competitive analysis and a needs assessment Q&A), a determination of specific unit size and scope of services. For example, if yours is a facility turning subacute beds every 45 days and you have a 10-bed subacute unit, you would need over 80 admissions a year to support those beds.

Moreover, Frontier looks at hospital-based discharge activity, including neurological, orthopedic, respiratory and cardiac DRGs, to help determine how many beds to convert. The company figures that, in a good, solid subacute unit, 85% of admissions will come from an acute care setting. In addition, through increased managed care penetration, managed care will become a more significant referral source to subacute providers.

The profile of Frontiers ideal acquisition candidate sheds further light on the prerequisites of converting to subacute: a family-owned facility with about 100 beds, having long standing key personnel and a low turnover rate. Its geriatric-care reputation must be good, and it must have good nursing leadership and support staff. The physical plant should be in need of little more than cosmetic changes, or there should be the ability to add beds and ancillary treatment space without regulatory interference.

Once Frontier acquires a home, it works to transform it into an extended medicine facility within six months to a year. "The easy part," says company President Francis Shea," is the physical conversion. The hard part is the cultural transition. No matter how good you are, if the nursing home has been a traditional, geriatric, long-term care facility, nursing personnel have to begin to see things in a different fight, and that really is an evolutionary process."

Potential referral sources -- hospitals, physicians, discharge planners and managed care providers -- are invited into the facility and asked to participate in the development of the clinical program. Through this collaborative approach, Frontier seeks to define the service needs of its key referral sources and begin the process of subacute program development. As an integral part of the cultural change, Frontier creates an interdisciplinary team that includes marketing, clinical services and administration professionals, and then dedicates this team to demonstrating the facility's new capabilities.

Ultimately Frontier will have a full-time chief medical officer overseeing each medical director in each of its Centers for Optimum Care." Medical directors spearhead staff enhancement, based on the assumption that people in a skilled nursing facility can be trained and educated to provide the same level of nursing and clinical care as is typically found in a hospital.

A core component of Frontiers extended medical model is the aggressive integration of rehabilitation and other ancillary services. Recently, for example, the company acquired Ultra Care Rehab Associates, a company with 250 physical therapists, occupational therapists, and speech/language pathologists providing rehabilitation services to 65 long-term care facilities. "Through this acquisition," explains Shea, "we are able to expand the array of therapeutic services offered in our Centers for Optimum Care, enhancing treatment planning and our interdisciplinary team approach to care."

Frontier also finds it crucial to define how "extended care" is being provided -- as a service provider or as a diagnosis provider. A service provider sees itself Providing a set of services for patients who have been diagnosed as needing them. A diagnosis provider determines what services are needed, and then provides them directly or indirectly. In Frontier's view, long-term care facilities are service-driven, while hospitals are diagnosis-driven. That makes it even more crucial, in Frontiers view, that its optimum care centers integrate a broad base of services. "We thrive as a business not by determining what is wrong with a patient, but by providing the essential care and treatment that results in positive outcomes,, explains Shea, speaking from a background in health care facility planning, development and management.

In short, the concept is that, by being a service provider, Frontier's facilities can provide subacute care in a more cost-effective manner than hospital-based providers, which incur more overhead in service delivery.

Subacute care represents sufficient opportunity for nursing home operators, says Frontier, to justify some restructuring of the industry. "It is possible," says Frontier Chairman and CEO Jonathan S. Sherwin, "that during the next decade, we will see a demand for extended medical beds that will exceed the current supply of nursing home beds in this country." Looking back at his experience in spearheading the development of long-term care, rehabilitation, substance abuse and psychiatric facilities throughout the United States, Sherwin says that Frontier's "extended medicine" model should keep the company at the forefront of this trend.