Seniors Housing Industry Looks for Ways to Bend Cost Curve, Improve Outcomes

SAN DIEGO — Breaking down the silos between the traditional real-estate-based seniors housing providers and the growing number of health, wellness and supportive services providers will lead to better healthcare outcomes for residents and slow the long-term growth of medical costs. But it’s a shift that won’t happen overnight.

That’s one of the key messages Bob Kramer, founder and CEO of the National Investment Center for Seniors Housing & Care (NIC), aims to deliver. The 2017 NIC Spring Investment Forum, which happened March 22 through March 24 at the Hilton San Diego Bayfront, drew more than 1,600 industry professionals, a record number for the show, including more than 350 first-time attendees. The title of this year’s program was “Unlocking New Value Through Senior Care Collaboration.”

Industry leaders are feeling a sense of urgency to tackle this issue. Five percent of Medicare recipients consume half of the federal program’s total expenditures, or about $60,000 per beneficiary, according to Kramer. By comparison, the bottom 20 percent account of Medicare recipients account for under $1,000 per beneficiary.

“In terms of bending the cost curve — a favorite phrase in healthcare reform — the initial target is very much understandably on the high-need, high-cost population. They are the majority of residents in our communities. This population is frail elders with assistance needed for two or more ADLs (activities of daily life), and often they have multiple chronic conditions that need to be managed,” explained Kramer during a press briefing at the event.

“We’re not talking about medicalizing private-pay seniors housing,” Kramer later emphasized. “What we’re talking about is recognizing that when you create a setting where the residents’ needs can be fully addressed, you are going to produce better quality-of-life outcomes, you are going to bend the cost curve, you are going to provide better healthcare outcomes. And you are going to do it in a setting where they live and function every day, rather than sending them off to the hospital, or even the doctor’s office or a medical office building.”

What Is ‘Senior Care Collaboration’?

One might reasonably assume “senior care collaboration” refers to the sharing of ideas and best practices among the various well-established market segments such as private-pay senior care, skilled nursing and post acute. But that’s not what NIC is referring to in this case.

Instead, the collaboration is between the traditional real-estate-based providers and non-real-estate providers. Examples of the latter include transitional and chronic care management companies, tech-enabled home care, enhanced primary care delivery at home, and even technology-driven predictive analytics. “These are all types of different supportive services that have real value for the frail elderly, the high-need, high-cost individual,” explained Kramer.

One of the goals of this collaborative approach is to unlock value for the real estate-based providers and their investors. The immediate benefit could be a longer length of stay by residents, according to Kramer. “But down the line, you are going to be creating value for insurance plans, managed care organizations, accountable care organizations.”

This collaborative approach delivers on the fundamental mission of seniors housing and care, which is to provide a good quality of life for residents, not just favorable healthcare outcomes, said Kramer. It’s an understanding the two are directly related.

“Isolation leads to loneliness. Loneliness leads to depression,” said Kramer. “When people have chronic conditions and people have ADL needs, those aren’t the things by themselves that land them in the emergency room or in the hospital. But that is where they end up when they don’t take the steps to manage those chronic conditions. They don’t take the medicines they’re supposed to. They don’t follow the diet they’re supposed to. They don’t do the exercises they should do. They’re not engaged.”

This holistic approach is crucial for the well being of seniors, Kramer believes. “The science is compelling that when it comes to quality of life, social forces trump medical forces overwhelmingly, especially when you are caring for seniors.”

— Matt Valley

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