innovation & opportunity leadingage arizona may 30, 2013 p · 2018. 3. 31. · innovation &...

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cliftonlarsonallen.com

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Continuing Care at Home Evolution, Innovation & Opportunity

LeadingAge Arizona May 30, 2013

Presented by:

Rachel B. Cohen, Director

Chad Kunze, CPA Partner

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Why Consider Community Based Services?

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According to the CDC by 2050, an estimated 27 million

people will need long term care with the majority

opting to receive care in their home.

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Housing and Health Care Is Ever Evolving

Source: Adapted from previous Greystone and CliftonLarsonAllen LLP presentations

Today’s Spectrum of Services

Community Based

Services

Wellness Programs

Senior Membership

Geriatric Assessment

Case/Disease Management

Health & Wellness

Centers

Independent Living

Intentional Community

Personal Care Assistance

Assisted Living

Telehealth & Home

Technologies

Day Care

Medical Social

Home Health

Skilled LTC

Respite Care

Palliative Care

Skilled Nursing Care

Hospice

Outpatient Therapies

Subacute Rehab

Diagnostic & Treatment

Center

Long Term Acute Hospitalization

Acute Hospitalization

Dementia Assisted

Living

Board & Care Intermediate Care

Want driven Need driven

Preventative Long-term care Hospital

Active adult communities Multi-level campuses

Housing w/ Services

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Reformed Health System – Service Delivery

Primary Care

Wellness

Acute Care

Chronic Care

• Hospital •SNF • At Home •Telehealth

•Home care •SNF •Assisted Living •Hospital •Physician office •Group visits •Self management • RN, Care Coach • Online/social networking (e.g. diabetes group) •Telehealth monitoring

•Health risk assessment • Independent senior

housing •Adult day programs •Community clinic

for vaccines • Local fitness center • Smoking cessation

program •Weight loss

program •Personal wellness

coach • Senior Center •Online social

networking groups/tools • Labs, diagnostics

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Source: CliftonLarsonAllen consumer telephone surveys 2008-2012

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Innovative Options

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Home Health

Home Care or Private Duty

Hospice

Adult Day Program

Home Maintenance

Services

Technology

Social, Educational and Spiritual

Assisted Living & Nursing

Home

CARE MANAGEMENT

Virtual Campus

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Care Coordination Is Expected To Save Costs

Source: Thorpe, Kenneth, PhD.; Emory University; “Estimated Federal Savings Associated w/ Care Coordination Models for Medicare-Medicaid Dual Eligibles; pgs 7 – 9; study supported by the America’s Health Insurance Plans; published 9/11; accessed via the web @ www.artoweradvisory.com

Care Coordination Assumes the following: 1. A team approach to services offered through Medicare & Medicaid 2. A whole person, person-centered approach 3. Care coordinator availability 24/7 4. Risk assessment & individualized care plan 5. Medication mgmt, adherence & reconciliation 6. Transitional care 7. Regular client contact 8. Health information exchange & electronic health record 9. Integration of primary and specialty physician care

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Continuing Care at Home

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Continuing Care at Home Models

• CCRC “without walls”

• Life care plan where members pre-pay for guarantee of future services

• Services typically are not health-related but long-term care services

• Focus on wellness and prevention

• Care Coordinator assigned to each Member

• Entrance fee plus monthly fees

• Most are regulated as CCRCs

• Admission only for independent seniors not in need of services (younger and healthier)

• Averaging 200-250 members

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CCaH Map Including Developing Programs

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CCAH Program Similarities

• Life Care – Guarantee of Future Service

• All are non-profit

• Based on Actuarial Studies

• Care Coordination

• Package of Services (not all packages are the same)

• One-Stop-Shopping Philosophy

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Program Differences

• Size

• Sponsors

• Services included in “package”

• Provision of services (employee or sub-contractor, network or only campus)

• Margin/Pricing

• Pricing Plans and Financial Risk

• Access to CCRC Campus amenities

• Portability

• Licensure

• Geographic reach

• Corporate Status

• Accounting methods, e.g. use of membership fees

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Typical Package of Services

• Care Coordination

• Home Inspections

• Annual Physical

• Access to Campus

• Fitness Center Membership

• Social & Educational Opportunities

• Emergency Response System

• Homemaker and Personal Care Services

• Home Nursing

• Live-in Services

• Meals

• Transportation

• Adult Day Program

• Assisted Living

• Nursing Home

• Referrals for home maintenance, housekeeping, lawn care, etc.

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Pricing & Contract

• Components of contract are similar to campus with additional language re: decision making and benefits caps.

• Average entrance fee ranges from $14,000 to $56,000

• Average monthly fee ranges from $200 to $500

• A variety of pricing plans including:

• 100% of all services paid as needed;

• a variety of co-pays for future services;

• home care only;

• long-term care insurance policy credit;

• limited total life-time benefit amount;

• refundable membership fee.

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Staffing – Continuing Care at Home Executive Director

Salesperson Care Coordinator

Sub-contracted Service Providers

Administrative Assistant

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Possible Financial benefit to Sponsoring CCRC*

Service Revenue Assisted Living $273,888 Nursing Home 375,998 Shared Services Fee 459,180 Occupational Therapy 9,518 Medicare Part A 257,250 Total Revenue to CCRC $1,375,834

*Example – Total of first five years of sample program

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Development Costs

Development costs are estimated at $100,000 (including market research, actuarial work and legal).

Initial operating investment estimated at $250,000 to $300,000 (with a payback schedule that can be achieved early).

Can cash flow itself as early as month 4 or 5.

According to GAAP rules for life care requiring the amortization of entry fees, can expect a positive bottom-line in year 3 or 4.

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“Permanent” Health Care Utilization

• Health Care Ratio =

(Perm AL Residents + Perm SN Residents)

(At Home Members + Perm AL + Perm SN)

– At Home Programs: 5-7%

– CCRCs: 18-20%

• Average age for need of permanent healthcare

– At Home Programs: 88.1

– CCRCs: 86.7

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Program Examples

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Revenue Sources 2009 Actual Revenue

Monthly Fees $1,178,328

Entrance Fees 440,677

Investment Income TOTAL REVENUE

57,560 1,676,565

TOTAL REVENUE $1,676,565

Operating 2009 Actual Expenses

Administration $301,477

Care Management 799,765

Marketing 381,322

Capital Costs 3,645

TOTAL EXPENSES $1,486209

Operating Year 5

Expenses

Revenues

http://www.longwoodathome.org/

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• First and largest program in the country

• Stand-alone non-profit – not sponsored by CCRC

• Located in greater Philadelphia and Delaware

• 2,300 members, average age at admission is 65

• Changed in 2004 – now only offers a Type B Modified Contract (similar to long-term care insurance)

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• Small entry fee of $3,500 for two years

• Monthly fees based upon benefits chosen, i.e. daily coverage, waiting period, lifetime maximum

• Less expensive option more appealing to a younger member

• Lower entry fee requires $1 million to $1.3 million in start-up capital

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Fee-for-service Model

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Fee-for-Service Models

• Fee-for-service options with small upfront membership fee, i.e. $1,000 to $5,000. Membership fee typically includes some services.

• Most are not licensed since there is no guarantee of care (sometimes licensed as home care provider).

• Limited care coordination is included. Extensive offered on a fee-for-service basis

• Target a senior who needs assistance now. • Parent organization typically supports as a loss leader –

serves as a feeder to fee-for-service offerings. • Cost to operate include one to two administrative staff,

marketing dollars and direct care staff (if applicable). • Capital investment and annual operating budgets vary greatly

based upon types of services offered.

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• Blakeford at Greenhills is a single-site CCRC.

• Wanted to develop continuing care at home without an entrance fee.

• Strategy to package care coordination and non-medical home care services to make aging at home easier and more successful.

• Refers to program as boutique program – serves wealthy seniors.

• Charged membership fee in the first year and then discontinued.

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• Retirement community services brought to you in your own home.

• At-home caregivers screened, trained and insured by Blakeford At Home.

• Chef-prepared meals, private transportation and more services all at home.

• Individual service plans custom-created for each family.

• Each family is assigned a care manager, masters level social worker or a registered nurse.

• Packages available such as Independent Living at Home for One; Assisted Living at Home for Two.

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Operating Performance

-$200,000

-$150,000

-$100,000

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

As of

7/2008

As of

8/2009

As of

10/2010

Net Income

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Staffing

President (25%)

Marketing/Sales

Care Manager

Staffing Supervisor

Blakeford At Home

Board

Outside Service

Providers

Office Manager

Office Assistant

Full Time Caregivers

PRN Caregivers

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Lessons Learned

• At launch, sub-contracted all services except for care coordination.

• Developed non-medical home care agency and now enjoys margin.

• Initial operating support – estimated at $300,000.

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Challenges

• Sales and Marketing - Successfully conveying the need for long-term care planning to the consumer and describing a complicated product

• Communicating benefits to campus residents

• Opening campus to at-home members

Opportunities

• Meet the needs of future generations who do not want to leave their homes.

• Increase brand awareness.

• Tap into an underserved market – 90 - 95% of older adults who choose not to live on a CCRC campus.

Challenges and Opportunities

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Financial Benefits

• Relatively low start-up costs and virtually no capital costs.

• Spread administrative costs over an additional program through shared services such as executive management, human resources, financial management, billing, accounts payable and receivable, etc.;

• Increased utilization/occupancy of assisted living and nursing home;

• Increased utilization/occupancy of nursing home for Medicare A short-term rehab stays;

• Rental payments for use of space and amenities; and • A small number of increased move-ins to independent

living.

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twitter.com/ CLA_CPAs

facebook.com/ cliftonlarsonallen

linkedin.com/company/ cliftonlarsonallen

Rachel B. Cohen, MUP, MSW, Director (303) 455-2524

[email protected] Chad Kunze, CPA Partner (602) 604-3534

[email protected]

http://www.twitter.com/CLA_CPAs

http://www.facebook.com/CliftonLarsonAllen

http://www.linkedin.com/company/cliftonlarsonallen

innovation & opportunity leadingage arizona may 30, 2013 p · 2018. 3. 31. · innovation &...

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