“5- to 10-year strategy”: Operators of senior living facilities focus on long-term value-based care

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While the adoption of value-based care models among senior living operators is accelerating in 2024, the development of these models remains a challenge.

Providers are using data insights to drive the growth of value-based care models, but at the same time, they are posing significant challenges for operators seeking to manage the risky transition to value-based care structures.

Providers are meeting the near-term expectations of investors while simultaneously attempting to transition to value-based care models. The lack of alignment of these timelines makes a value-based transition riskier.

Although progress in value-based care for seniors may be slow at times, it is steady and providers are embracing it as they look to the future.

“Value-based care is a 5- to 10-year strategy,” said Adam Kaplan, CEO of Solera Senior Living. “It’s a longer-term strategy relative to investor terms.”

More than three-quarters of participants in a recent SHN survey reported growth in value-based care models over the past twelve months.

Actions to drive this growth ranged from implementing a “predictive EHR” platform tied to resident health outcomes and care delivery to partnering with companies to align data collection with value-based care growth strategies.

As they expand their own programs, operators are taking inspiration from more established players like Brookdale Senior Living (NYSE: BKD) and its HealthPlus model. Earlier this year, Brookdale CEO Cindy Baier told SHN that the growth of the HealthPlus model was geared toward a time when “virtually every senior will have a Medicare Advantage plan.”

Data fuels value-driven change

Senior living operators have been improving their operations in recent years by using new technologies, from improving staff efficiency to enhancing health care for residents. Data is central to these efforts.

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

A recent SHN survey shows that 80% of operators surveyed want to develop value-based care models in the next twelve months.

Other areas where value-based care efforts will grow in 2024 include active and independent living for adults based on “various wellness concepts,” one respondent shared. Another highlighted new revenue opportunities through more accurate billing for care through changes in care models seen in recent years.

But value-based care is particularly data-intensive. 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 partnered with August Health to implement several value-based measures. Priority Life Care uses August Health’s software platform, while 12 Oaks uses the technology company’s compliance and care management platform.

“I believe this is the way of the future,” Petras said of value-based regulations in senior living.

By letting August Health do the “heavy work” of integrating 12 Oaks’ operational and care data, they can increase staff efficiency, said Greg Puklicz, president of 12 Oaks – from customer relationship management in sales to resident care and pharmacy data.

“The goal is 100 percent implementation in all our communities by the end of the year,” Puklicz added, with the ultimate goal of reducing resident length of stay through better care outcomes.

“We see real added value in switching to this medical model, but it is still important that we differentiate ourselves from the competition,” said Puklicz.

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

“The more data-driven decision-making and systems required for successful senior living are skills and value systems I’m trying to develop,” Eby said. “There has to be a certain level of sophistication that goes along with the determination and love we have for senior living.”

Eby said senior living providers who are early adopters will have the opportunity to pave a “great path to access” the benefits of value-based care while also making an impact on the broader American healthcare sector.

“Senior living can deliver results like no other area of ​​health care, because our communities are home to the people who cost the health care system the most today,” Eby added. “Who better than us to change that?”

Other providers have joined the Perennial Consortium, a value-based care initiative co-founded by Juniper Communities, Ohio Living and Christian Living Communities, to realize the benefits of value-based care.

Solera Senior Living recently partnered with payer Curana Health to provide residents with basic medical care rather than joining a Medicare Advantage (MA) model because it is too difficult to transition residents to the new structure.

“This is a long-term strategy and I want to be able to work with our partners, show them the data and show them the risks versus the rewards,” Kaplan said.

Elsewhere in the industry, there are some major players driving value-based care efforts with the future of senior living in mind, including Benchmark, which recently partnered with Curana Health and the Serviam Virginia Value-Based Care Alliance.

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

Meanwhile, Brookdale Senior Living continues to develop its HealthPlus model, which aims to improve residents’ well-being and life expectancy. The company’s efforts are underscored by the fact that CMS has pledged to place all fee-for-service Medicare beneficiaries in ACOs by 2030.

“When you look at value-based care, the possibilities are endless,” said Kim Elliot, senior vice president and chief nursing officer at Brookdale. “If you don’t get that foundation right and don’t have the right elements of a program in place that enables that, then you’re just not prepared for the future.”

Common challenges arise in the development of value-based models

Senior living operators face numerous challenges when considering value-based solutions, ranging from a lack of resources, such as additional staff to meet increased care needs, to deficiencies in building amenities and a lack of access to capital for future growth.

Petras said she felt that senior living providers had “no place at the negotiating table” when it came to finding solutions to reduce care costs and additional health care expenses.

By this, she means that value-based care could be “the only way” for senior living providers to improve care and intensify processes.

A recent SHN survey found that 35% of operators surveyed said “finding viable payment sources” was one of the biggest challenges to moving to value-based arrangements, with another 28% of operators surveyed citing “staff shortages and lack of training” as another barrier to entry.

And demonstrating the benefits of converting Medicare plans to MA plans can be another challenge for operators.

“This does not necessarily mean that the people who are eligible and could benefit even want to participate,” Petras added.

According to Eby, the transition to value-based care in elderly care also depends on those responsible being “much more adaptable” in developing their views on the implementation of value-based regulations – while at the same time being more willing to take risks.

“People want to be part of something new that’s growing and evolving,” Eby said. “We’re dealing with a really big problem and we need to evolve quickly and in many ways to have a chance to be really great at what we do.”