‘5- to 10-Year Strategy’: Senior Living Operators Play Value-Based Care Long Game

‘5- to 10-Year Strategy’: Senior Living Operators Play Value-Based Care Long Game

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As the pace of senior living operators adopting value-based care models in 2024 quickens, challenges remain in growing those models.

Providers are wielding data insights to spur value-based care model growth while also posing significant challenges to operators aiming to balance in making the risky transition to value-based care structures.

Providers are meeting capital providers’ short-term expectations while at the same time attempting to shift to value-based care models, and the misalignment in those timelines make value-based transitions more risky.

Though senior living progress in value-based care might be slow at times, it is steady, and operators are embracing it with an eye toward the future.

“Value-based care is a 5- to 10-year strategy,” said Solera Senior Living CEO Adam Kaplan. “You’re looking at a longer strategy relative to the terms of investors.”

More than three-quarters of respondents to a recent SHN survey reported growing value-based care models in the last 12 months.

What that growth entailed ranged from the rollout of a “predictive EHR” platform tied to resident health outcomes and care delivery to partnering with companies to align data-collection efforts with value-based care growth strategies.

As they grow their own programs, operators are looking to more established players, such as Brookdale Senior Living (NYSE: BKD) and its HealthPlus model, for inspiration. Earlier this year, Brookdale CEO Cindy Baier told SHN the growth of its HealthPlus model is geared for a time when “virtually every senior will be on a Medicare Advantage plan.”

Data fueling value-based transition

Senior living operators have spent recent years upgrading operations through technology adoption, from attempting to improve staff efficiency to deepening resident health care services. Data is central to those efforts.

The need for more real-time actionable data, both in operations and for value-based care arrangements, is why companies including Life Care Services and Benchmark Senior Living have invested in increasingly sophisticated business intelligence capabilities.

The recent SHN survey revealed that 80% of responding operators grew value-based care models in the next 12 months.

Other areas of 2024 growth of value-based care efforts included active adult and independent living based on “various wellness concepts,” a respondent shared. Another highlighted new revenue opportunities in more accurately billing for care with care model changes, as seen in recent years.

But value-based care is especially data-intensive. In order to ensure residents get the care they need, operators must closely monitor their conditions in real time. Priority Life Care and 12 Oaks Senior Living recently paired with August Health to achieve various value-based efforts.Priority Life Care uses August Health’s software platform, while12 Oaks uses the tech company’s compliance and care management platform.

“I believe that it is the way of the future,” Petras said of value-based arrangements in senior living.

Relying on August Health for the “heavy lift” of integrating 12 Oaks’ operating and care data will help improve staff efficiency, 12 Oaks President Greg Puklicz said, from customer relationship management in sales to resident care and pharmacy data.

“The goal is 100% implementation across our communities by year-end,” Puklicz added, with the ultimate goal of improving length of stay of residents through better care outcomes.

“We see real value as we move into this medical model, but what’s important is still differentiating ourselves,” Puklicz said.

Priority Life Care is part of the Serviam Care Network, a value-based care alliance that started in 2023 and was founded in part by Bickford Senior Living CEO Andy Eby.

“The more data-driven decision making and systems necessary to thrive in senior living is a skill and value system that I am trying to grow,” Eby said. “There’s a level of sophistication that needs to come with the grit and love we have for senior living.”

Eby said senior living providers that are early adopters will have the opportunity to trailblaze a “great path to access” the benefits of value-based care, while having input in the broader American health care space.

“Senior living has the ability to drive outcomes like no other health care discipline and vertical out there because the people who are costing the health care system the most are living in our communities today,” Eby added. “Who better to change that than us?”

Other providers have joined the value-based care initiative Perennial Consortium, which was co-founded by Juniper Communities, Ohio Living, and Christian Living Communities, aiming to access the benefits associated with value-based care.

Solera Senior Living recently partnered with “payvider” Curana Health to provide primary care to residents instead of joining a Medicare Advantage (MA) model due to the challenges of getting residents transitioned into the new structure.

“This is a long-term strategy and I want to be in the position where we can work with our partners, show them the data, and show what the risks are versus the return,” Kaplan said.

Elsewhere in the industry, there are some big players behind value-based care efforts with an eye toward the future of senior living. They include, Benchmark, which recently partnered with Curana Health and the Serviam Virginia Value-Based Care Alliance.

“Value-based care makes great sense when coordinated with senior living and I see it as a very promising part of the future of the senior living industry,” said Benchmark CEO Tom Grape.

Meanwhile, Brookdale Senior Living continues to grow its HealthPlus model, aimed at improving resident wellness and lifespan.. The company’s efforts are underscored by the fact that CMS has pledged to have all fee-for-service Medicare beneficiaries in ACOs by 2030.

“When you look at value-based care, the possibilities are endless,” said Kim Elliot, Brookdale’s Senior Vice President and Chief Nursing Officer Kim Elliot. “If you don’t get that foundation right and you don’t have the true elements of a program that will do it, then you’re just not set up for the future.”

Common challenges arise in growing value-based models

Senior living operators face many challenges when considering value-based arrangements, from lack of resources like additional staff to meet increased care requirements to physical plant shortcomings with little access to capital for future growth.

Petras said she felt that senior living providers “don’t have a seat at the table” to find solutions to alleviate care costs and added health care expenses.

By this she means value-based care could be “the only way” for senior living providers to improve care and deepen operations.

A recent SHN pulse survey found that 35% of operators that responded said “finding viable payment sources” was a main challenge for shifting to value-based arrangements. Another 28% of operators responding to the survey cited “staffing shortages and lack of training” as another barrier to entry.

And presenting the value of changing Medicare to MA plans can be another challenge operators face.

“It doesn’t necessarily mean that the individuals who are eligible and could benefit even want to participate,” Petras added.

Eby said the shift to value-based care in senior living is also dependent on leaders being “much more adaptive” in evolving their views on pursuing value-based arrangements—while stomaching a greater appetite for risk.

“People want to be part of something that’s new, growing, and evolving,” Eby said. “We’re going after a really big problem and we’re going to have to evolve rapidly and many times over to have a shot at being really great at what we do.”

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