senior living consultants. first year operations: lessons learned from a hard first year
TRANSCRIPT
Senior Living Consultants
First Year Operations: Lessons Learned from a Hard First Year
www.npaonline.org
PACE Model
Five Service Elements• Intensive primary care
• Integrated Team management
• Use of adult day health center
• Home care
• Transportation
PACE Model
Required “Best Practices”• Voluntary caregiver support
• End-of-life care
• Management of participant/family member noncompliance
The Consultant Role
Assist new PACE organizations to reach program goals: Provide quality of care Manage operational costs Reach census goals Facilitate medical cost management and
expense containment while capturing appropriate revenue
HE SAID WHAT??
Consultant-Client Communication
The course of action is correct…but consultant failed to do a good job communicating with the client—the client is dissatisfied and the consultant is blamed
The difference between clarity and confusion—we are speaking two different languages..EDUCATING, LISTENING, PLANNING
Consultant-Client Communication
Establish a set of objectives that both the client and the consultant understand:
• Understand the strategic mission• Develop a well-defined work plan with assigned
deadlines and responsibilities• Formulate an action plan that will help the team
achieve a successful opening and fill-up
Consultant-Client Communication
Consultant should remember to:• Focus on client goals• Use industry specific language or just plain
English will do..Thank You Very Much!• Provide repetitive follow-up• Establish reasonable feedback/communication
timelines from the very beginning• Relationships take time..give client examples of
results when they are apprehensive about a strategy or idea
Consultant-Client Communication
Client has responsibility, with consultant support, to:
• thoroughly learn the PACE “language”• understand deadlines for submission of data• Understand HCC method of reimbursement
Consultant should provide to the client simplified definitions and topics to further study
Consultant-Client Communication
Mind Shift• The provider brings to PACE their unique
perspective from their own fee-for-service world− Health System: the Step Child—load them up with
overhead and don’t give them any capital− Hospice—we already know how to do this!− CCRC—what does a poor, old, frail person look like?
Consultant-Client Communication
Time/Census/Operating Loss PRESSURE COOKER
• Sponsors/providers expect- shorter development periods- quicker fill-ups- lower start-up losses
Lessons Learned
Extra Doses of:• Training• Pre-Marketing (Okay…Public Relations)• Contingency planning and cash• Excited stakeholders
PAY BIG DIVIDENDS!
Lessons Learned
Fast census growth provides the cushion to learn the model
IDT function can be messy but is not easily learned from the sidelines
The State Administering Agency is always moving the cheese• lowering rate• imposing census caps
Lessons Learned
You will want access to affordable housing sooner than you think
You have to be prepared to expand well before you are at full census
The most common Team member you will have to change may be your primary care physician
Team members must adopt the PACE model without reservation. Rehab staff may have difficulty letting go of the Medicare regulations pertaining to Skilled Nursing, affecting IDT.
…The Rest of Story
Question? How can the same organization have two programs at different ends of the spectrum,
• one of the most financially successful programs, and• the worst PACE start-up?
Answer:• Totally different markets• Organization was a dominant brand in the first
market
…The Rest of Story
Question? How did a program identify 75 participants (prior to program approval) who mostly enrolled in the first few months of operation without marketing directly to the family or participant?
Answer: Great pre-marketing and referral sources
…The Rest of Story
Question? How did a PACE lose millions in just 6 months?
Answer: not paying attention to Medicare Risk Scores
Page 19
PACE and the Numbers
Participant Net Growth
Competition—real or perceived Marketing—reaching potential
participants Gatekeepers—Division of Aging, AAA Financial Eligibility—100% to 300%
of poverty level
Participant Net Growth
Greater initial enrollment (accelerate break even)
Staffing for growth (assessment and timely additions of staff)
Timely expansion of adult day health center capacity
The Numbers
Statistic Experience Minimum Impact
Net Growth
1 to 14 per month
3 Five-year impact of achieving 5 instead of 3
Doubling of cash and operating income
Initial Census
1 to 20 participants
5 First year impact of opening with 20 instead of 8
Breakeven occurs 4 months earlier and operating losses drops by $500,000
Medicare Payment
Based on diagnosis plus frailty factor
Medicare risk scores ranged from 1.73 to 3.07 based on January 2012 PDAC data
Average risk score=2.35
The % change $PMPM from interim January 2012 payment to 2012 Final Payment showed individual programs experiencing reimbursement changes from -19.11% reduction to +35.22% increase due to risk and frailty scores.
Capital CostsComponent Expense
Adult Day CenterBuildPurchaseLeaseCapital Improvements
$4M to $15M*$1M to $3M* $3 to $30 per SF/year*$900K to $2.3M ($60-$150/SF)*
Vans $45 to $50K each
Start-up Costs $500K to $1M
Operating Losses $500K to $4M
Cash Reserves $500K
*Range due to relationship between building condition and capital requirements
Operating Factors/Practices
Participants living alone—5 to 40% (dramatically affects costs)
Prevalence of specific chronic diseases ESRD COPD Behavioral
Primary care effectiveness Team Performance Day center attendance Day center expansion—mitosis or
start from scratch
Operating Factors/Practices
Review all hospital discharges and readmits within 30 days
IDT decisions provide medically necessary services to members. With PACE flexibility, value and quality of care co-exist in preventive care
Operating Factors/Practices
Contractual Services
Hospital—rates and utilization significantly affect financial performance
Nursing Home—utilization
Assisted Living
Home health/home care-utilization
Specialists – automatically scheduling follow up visits…A PACE physician decision.
Total Capital Investment $1M to $5M
Operating Margin 5% to 15%
Break Even 6 to 18 months
Program Revenue intensive for minimal investment
Financial Performance
Contact Us
1501 Greer LaneSignal Mountain, TN 37377423.517.0567 ▪ 423.517.0568 Fax
dan.gray@consulting-cds.comwww.consulting-cds.comwww.npaonline.org