The future is now.
I read last December's cover story in Nursing Homes/Long Term Care Management with great interest (see "What Does Long-Term Care long-term care (LTC),
n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. Think of Itself?" p. 16). It's always fascinating to focus on the issues facing long-term care through the eyes of those in the trenches--those doing the heavy lifting, those who actually operate long-term care facilities long-term care facility
See skilled nursing facility. . I find that perspective to be highly beneficial, especially for one who teaches the theory of long-term care unencumbered Unencumbered
Property that is not subject to any creditor claims or liens.
For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. by the burden of actually having to practice what he preaches.
That said, I couldn't help noticing that the issues surfaced by those responding to The Marlin Company survey were largely oriented to the "here and now." The top problem facing respondents was reimbursement. The primary hope for the future had to do with regulations. And why should it be otherwise? Sure, it's always nice to deal with the "big picture," with systemic issues that ultimately will determine the future of long-term care. Yet, failure to deal with the "here and now" might mean that few of us will be around to even see the future. For so many in long-term care, the future is, indeed, now.
Another reason for a contemporary focus might well be that the future doesn't look all that auspicious aus·pi·cious
1. Attended by favorable circumstances; propitious: an auspicious time to ask for a raise in salary. See Synonyms at favorable.
2. Marked by success; prosperous. . Indeed, this magazine's editor-in-chief suggested that even focusing on contemporary issues could make one "dizzy" (see "A Head-Spinning Peek Into the Future," December 2006, p. 6). Well, gazing into the future sure won't do much to restore one's equilibrium. The news is anything but encouraging. At least not to those of us paid to look beyond the superficial.
In the third quarter of 2004, for example, the care of 14.2% of all residents in freestanding nursing homes was paid for primarily by private sources. By the end of the third quarter of 2006, only 10.8% of all residents in freestanding nursing homes had their care paid for by private sources (as opposed to Medicaid, Medicare, insurance companies, or other public programs). This is a 24% reduction in the private-pay percentage--and just over a brief two-year period. It's not been that long since private-pay constituted close to 50% of all nursing home revenues. How many of us remember those days? Savvy public policymakers know that funding long-term care will become increasingly problematic, short-term peaks notwithstanding.
But that's only part of the story. Accompanying reductions in a facility's "quality mix" is an impending im·pend
intr.v. im·pend·ed, im·pend·ing, im·pends
1. To be about to occur: Her retirement is impending.
2. free fall in occupancy--stimulated in part by reduced demand. And that reduction is systemic, not episodic episodic
sporadic; occurring in episodes. e. falling a paroxymal disorder described in Cavalier King Charles spaniels in which affected dogs, starting at an early age, experience episodes of extensor rigidity, possibly brought on by stress. e. . Yes, I know occupancy in nursing facilities is currently hovering around 94%. And I know that just thrills Wall Street. The recent annual meetings of both the American Health Care Association The American Health Care Association (AHCA) is non-profit federation of affiliated state health organizations, together representing more than 10,000 non-profit and for-profit assisted living, nursing facility, developmentally-disabled, and subacute care providers that care for (AHCA AHCA Agency for Health Care Administration
AHCA American Health Care Association
AHCA American Hockey Coaches Association
AHCA American Highland Cattle Association
AHCA Australian Health Care Agreement
AHCA Austin Healey Club of America ) and the National Investment Center for the Seniors Housing & C Care Industries (NIC (1) (Network Interface Card) See network adapter. See also InterNIC.
(2) (New Internet Computer) An earlier Linux-based computer from The New Internet Computer Company (NICC), Palo Alto, CA. ) were replete with optimistic statements about the industry's present and future. "The seniors housing and care industry has never been hotter," enthused an NIC flyer. "This is one of the healthiest periods of time for all sectors of the seniors housing industry. Everyone is doing well, even skilled nursing facilities skilled nursing facility
n. Abbr. SNF
An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. ," proclaimed David Schless, executive director of the American Seniors Housing Association. And, continued NIC Board Chair Sarah Sumner Duggan, "Seniors housing is producing very attractive returns. Investors in Emeritus Assisted Living Emeritus Corporation (AMEX: ESC) is a retirement home company based in Seattle, Washington. The company runs assisted living homes for people who may need some help with daily activities but don't need skilled nursing care (offered at a few of its properties). [for example] enjoyed a 403 percent return in a year."
A similar euphoria was evident at the annual AHCA convention. "The state of our industry is healthy," stated AHCA President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Bruce Yarwood. Michael Hargrave, an expert on seniors housing, confirmed Yarwood's optimism with his own statistics. Median nursing facility occupancy, he pointed out, increased from 92.7% to 94.1% over the past year, and revenue per occupied bed, over the same period, shot up from $165 to $175. That's fantastic news for nursing homes. Their occupancy rates were in the mid-80s only four years ago.
But Wall Street (and, apparently, some of those who follow its lead) is well known for its tendency to ignore the long term and focus almost exclusively on this month's quarterly statement. And the long term will almost certainly come back to haunt it.
Indeed, one of the most fascinating reports I have read in a lifetime of fascinating reports was one recently published by The Lewin Group. The bad news, at least for the nursing home industry, was contained in an analysis conducted by Lisa Alecxih, vice-president of The Lewin Group. "In the last two decades," she pointed out, "the way we support frail older adults in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. [has] changed significantly with a large shift away from nursing homes, particularly among the oldest old. Consistent with the expressed desire of most older adults to continue to live in the community, this change in the mix of supports suggests continued change as the baby boom generation begins to need long term care. It also cautions policymakers and providers regarding their assumptions about the demand and supply for long term [care]...."
And the data are striking. Citing the National Nursing Home Survey (NNHS NNHS National Nursing Home Survey
NNHS Naperville North High School (Illinois)
NNHS Newton North High School
NNHS Newport News High School ), the authors point out that the percentage of older adults (age 65 and older) in nursing homes declined from 4.2% in 1985 to 3.6% in 2004, and other data sources suggest the decline continues through today. The use rate among the oldest old (age 85 and older) experienced the greatest decline, falling from 21.1% in 1985 to 13.9% in 2004. If older adults continued to use nursing homes like they did in 1985, 1.95 million older adults would reside in nursing homes today. That would add up to nearly 50% more than the 1.32 million actual residents age 65 and over in 2004. While the total number of people age 85 and older nearly doubled over the period, the number of those age 85 and over in nursing homes remained about the same.
And, finally, there's the whole issue of Medicaid reimbursement and the industry's excessive reliance on a funding source that consistently threatens its economic well-being. Studies have shown billions of dollars in the difference between facility costs and Medicaid reimbursements, and Congress is always on a quest to cut Medicare reimbursements that, by CMS's own admission, help make up the Medicaid shortfall.
But, again, the prevailing focus in the industry is on the short term. Yes, the economy is booming; yes, welfare rolls are down; yes, tax receipts are up. In October of last year, the Kaiser Family Foundation The Henry J. Kaiser Family Foundation (KFF), or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. reported, "State revenues increased faster than Medicaid spending for the first time since 1998." Further, the report stated, "While cost control remains a priority, state Medicaid officials appear to have moved away from a primary focus on cost containment cost containment,
n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. to a range of priorities including expansions or restorations of eligibility and benefits, improving quality, and changing the delivery of long-term care services."
But, as Steve Moses--one of the more astute students of Medicaid policy--pointed out in one of his periodic Internet newsletters (January 1, 2007), "It is only a matter of time ... before another fiscal downturn occurs. With the economy in recession, Social Security, Medicare, and Medicaid languishing lan·guish
intr.v. lan·guished, lan·guish·ing, lan·guish·es
1. To be or become weak or feeble; lose strength or vigor.
2. , public financing of long-term care declining, and private financing sources strained, the seniors housing industry will once again struggle...."
So, in addition to the imperative of focusing on the short-term issues, how do we propose to deal with the more ominous future? Well, I would suggest that we start with the recognition that the issues facing us in the long term are, indeed, systemic. They are not cyclical. And absent underlying systemic changes in the long-term care environment, the issues themselves will not change. Let's take, for example, the almost geometric downturn in quality mix.
The increased reliance by nursing facilities on Medicaid is largely a function of two trends nursing facilities cannot control. One is the increasing affluence of the elderly and the willingness of their children to contribute to their care. The second is the advent of increasing options facing those needing long-term care. It is not that there are fewer residents paying out of pocket. It means simply that they are paying out of pocket for assisted living as·sist·ed living
A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. and other alternatives.
That accounts also for a good part of the decreasing number of those actually residing in nursing homes, not just those paying privately. It is true that levels of frailty frailty Vox populi A state of delicacy or weakness which, which encompasses age-related fragility, in particular osteoporosis. See FICSIT, Osteoporosis. and disability have been in decline over the past few decades. But certainly not enough to account for the amazing a·maze
v. a·mazed, a·maz·ing, a·maz·es
1. To affect with great wonder; astonish. See Synonyms at surprise.
2. Obsolete To bewilder; perplex.
v.intr. decrease in the percentage of seniors receiving care in nursing homes. No, it is the massive exodus to alternative forms of care by those needing care. And that leaves the entire industry facing a future that looks very bleak indeed.
The industry is not on the verge On the Verge (or The Geography of Yearning) is a play written by Eric Overmyer. It makes extensive use of esoteric language and pop culture references from the late nineteenth century to 1955. of becoming but has actually become a form of public utility, one dealing with frail and chronically ill residents who are predominantly poor. But without any of the advantages of the more traditional public utility. There are no government entities (read, public utilities commissions) looking to maintain a reasonable rate of return on investment for the businesses over which it exercises oversight. Much the opposite; the public utility commissions responsible for nursing homes (read, Medicaid programs) are more inclined to reduce margins. That's what comes of being not just regulator, but primary payer, as well.
Those who recognize the issue as being systemic will deal with it systematically. Not by trying to alter the environment, but by accommodating to it. It will focus on a different market, by choosing not to be a Medicaid-driven chronic care facility. It will reinvent re·in·vent
tr.v. re·in·vent·ed, re·in·vent·ing, re·in·vents
1. To make over completely: "She reinvented Indian cooking to fit a Western kitchen and a Western larder" itself as something more akin to assisted living or subacute care. But, at the same time, it will recognize that as others attempt the same strategy, it must at the same time set itself apart from the rest of the industry.
And it does that by focusing on the value equation. It does little good to reinvent yourself if everyone else is doing the same. One must also be noted for being among the best such communities in the marketplace. And we do that by focusing on performance. We can't just be different. We have to be good, as well. Remember, we're trying to enhance the quality mix by moving into a market that is oriented toward customer choice. Yes, price will make a difference. But only price combined with perceptions of quality will offer the customer value. And only if the customer perceives value will your community become the facility of choice.
In his editorial in the December issue of this magazine, Richard Peck Richard Peck (b. April 51934) is an American novelist known for his prolific contributions to modern young adult literature. He was awarded the Newbery Medal in 2001 for his novel A Year Down Yonder. referred to the "alluring" array of quality initiatives designed to enhance performance--initiatives with such names as Quality First, the Nursing Home Quality Initiative, and Advancing Excellence in America's Nursing Homes. Basically, all of them (along with such branded initiatives as Wellspring well·spring
1. The source of a stream or spring.
2. A source: a wellspring of ideas.
Noun , the Pioneer Movement, and the Eden Alternative) reflect a common theme--quality management.
But how many facilities actually subscribe to Verb 1. subscribe to - receive or obtain regularly; "We take the Times every day"
buy, purchase - obtain by purchase; acquire by means of a financial transaction; "The family purchased a new car"; "The conglomerate acquired a new company"; the concept (not just to the name) of quality management? Well, here's where serious attempts to adapt systemically to change bear both short- and long-term rewards. True quality management has as one of its guiding principles the idea of an empowered staff, not just in name, but in reality. An empowered staff (along with data-driven systems and a customer focus) truly sets apart those facilities engaged in more than just lip service lip service
Verbal expression of agreement or allegiance, unsupported by real conviction or action; hypocritical respect: . And an empowered staff has a tendency to stick with a facility. It is both a reflection and an outcome of quality management. It will position the facility for the long haul Long distance. Long haul implies traversing a state or a country. Contrast with short haul. but advantage it in the short term, as well.
I have long argued that the best indicator of the quality-oriented community is not its survey record, not its profitability, and not its complaint level. Rather, it is staff turnover. Staff turnover is the true reflection of quality. And it is less than coincidental that low staff turnover will be seen in lower survey deficiencies, fewer complaints, and higher profitability. Not because of staff turnover itself, but because staff turnover is both a reflection and a result of quality improvement strategies.
So, where does this all leave us? Well. It leaves us both dizzy and optimistic. As Peck stated so well, on the bright side he sees "entrepreneurial owners and operators moving to take advantage of the new long-term care trends, master the various creatures lurking See lurk.
(messaging, jargon) lurking - The activity of one of the "silent majority" in a electronic forum such as Usenet; posting occasionally or not at all but reading the group's postings regularly. about, and create new and flourishing business in the age-old profession of caring." Or, to paraphrase Peck, he sees those in the profession who can distinguish between the short and the long term. Who can recognize the need for systemic change in accommodating to systemic forces. And that is good news indeed.
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Paul R. Willging, PhD, was involved in long-term care policy development at the highest levels for more than 20 years. Dr. Willging served for 16 years as president/CEO of the American Health Care Association, was President/CEO of the Assisted Living Federation of America, and later went on to cofound co·found
tr.v. co·found·ed, co·found·ing, co·founds
To establish or found in concert with another or others.
co·found the successful Johns Hopkins Noun 1. Johns Hopkins - United States financier and philanthropist who left money to found the university and hospital that bear his name in Baltimore (1795-1873)
2. Seniors Housing and Care postgraduate program (cosponsored by the National Investment Center for the Seniors Housing & Care Industries). He is currently Associate Director of both the Johns Hopkins Medical School's Division of Geriatric Medicine and Gerontology gerontology: see geriatrics. as well as the Johns Hopkins Center on Aging and Health. He has enjoyed an equally long-lived reputation for offering outspoken, often provocative views on long-term care.