Good morning ProviderNation.
Having been a physician for the past three decades and a long term and post-acute care provider for nearly a dozen years, I believe there really is room for SNFs to take the lead in changing the health care world.
But before I get into why, here’s a little background on me: Twenty-five years ago, I slapped a sign on an office door and opened my medical practice. Having no patients and needing to provide food for my expanding family, I took a part-time job as the medical director of a nursing home. At the time, I wasn’t smart enough to know that seeing the Maryland Secretary of Health walking the hallways was a bad sign. It was a regulatory nightmare.
Fortunately, I was smart enough to follow the lead of a very smart DON, and despite me, the facility got back on a good footing.
Over the next 15 years, I developed a sideline reputation of being the emergency medical director for troubled facilities, and I plied the trade up and down the East Coast. I was once hired by the city government of Nashville as the medical director of their municipally owned nursing home that had been occupied by sidearm-carrying agents of the U.S. Department of Justice as part of a federal CRIPA (Civil Rights of Institutionalized Persons Act) survey.
In 2003, I had the opportunity to buy a sleepy skilled nursing facility on the eastern shore of Maryland for $8.8 million. My bank account was laughable, so I checked under the pillows of my sofa and only found 63 cents and half a sandwich. The owner, a very sweet elderly lady, was kind enough to lend me the money to buy her facility, and I was in business.
Eleven years later, Mid-Atlantic Health Care owns and operates 16 facilities with 3,000 beds. We specialize in buying nonprofit and county-owned buildings, and we pride ourselves on being a clinically driven company with little regulatory trouble, strong ratings, and a focus on cutting edge technology and products. We lead clinically and invest heavily in our centers and in our people.
In the past two years, we have developed our own data-mining software, opened high-acuity units, and were chosen as a “convener-episode initiator” by CMS in its Bundled Payment for Care Initiative (BPCI). Simultaneously, we’ve grown beds and revenue by 40 percent annually for the past four years.
Five years ago, we guessed that being the best partner of the health system would be a positive thing and someday someone would pay us for that. We started a program to reduce hospital usage by our patients by finding innovative ways to keep them healthier. We hired nurse practitioners, opened high-acuity Step Up® units, invested in IT, and developed a data-mining system that tells us, in real time, when our patients are about to become sick.
The end result is that all hospital admissions are down—not just readmissions. For comparison, readmissions in Maryland dropped from 25 percent to 11 percent. In Philadelphia, where we operate 1,700 beds, readmissions dropped from 45 percent to 19 percent and continue to fall.
With our bundled payment program going live last January, we are focused on making sure that our patients stay healthy and out of the hospital. But don’t get me wrong—we have plenty of problems, too.
Having said that, I come from the absolute belief that SNFs are in a unique position to be key players in responding to this new focus at CMS. The hospital systems will have a very tough time trying to implement population-based cost reductions. They are being asked today to reduce readmissions—a concept that is totally foreign to their corporate cultures. They will soon be pushed to reduce admissions—not just readmissions—and to be responsible for the cost of care of their local population at the community level. I will take a look at the Maryland waiver experiment in future posts to illustrate this point.
However, I believe SNFs can help hospitals achieve these goals and share in the savings to the system. The BPCI program is a perfect example. In bundled payments, SNFs can take the lead and become the “convener” and offer a “gain share” payment back to their local health system. We all know that we can reduce readmissions with focus and effort. This ability to reduce readmissions effectively brings leverage to SNFs as well as the ability to create new revenue streams.
Making your SNF the best partner to the health system will result in moving the payer mix needle and improving your financial status. I will discuss all of this, including our successes and failures, in future posts. In addition, I will try to feature other companies that I see that may have experiences helpful to you.
Feel free to tell me what you think. I enjoy a good argument, so if you think I’m clueless, don’t hesitate.
Scott Rifkin, MD, is CEO of Mid-Atlantic Health Care. He can be reached at email@example.com.