While most people entering a traditional CCRC pay the entrance fee using proceeds from their previous home’s sale, this new model keeps seniors in their homes—but still has the entrance fee component, which Stephen Maag, Director of Residential Communities at LeadingAge, found ranged between $20,000 to $70,000 among existing programs in a February 2012 paper on the model. 

This could pose a problem for many seniors on fixed incomes. While AARP studies show about 90% of older adults want to remain in their own homes for as long as possible, two-thirds of Americans fear they won’t have enough money for retirement, and nearly half fear they won’t have enough to pay medical costs for normal healthcare, according to a Gallup poll.

That’s where reverse mortgages come into play. Using this type of loan to finance the buy-in to a CCRC-without-walls program “could very easily” be the solution to being able to afford the entrance fee, says Dennis Baier, a mortgage broker specializing in reverse mortgages at Chicago-area Wintrust Mortgage Corporation.

Reverse mortgages, which allow homeowners aged 62 or older to tap into their home’s equity, can be used for a variety of reasons: to free up monthly cash flow, pay off an existing mortgage, make repairs to the home, and perhaps above all, allow people to stay comfortably in their homes. Through this type of loan, borrowers are able to get a loan based on their age and their home’s value, among other factors, that can be in the form of a lump sum, monthly payments, a line of credit, of a combination of these options. 

“The whole point of a reverse mortgage is keeping a senior in their home and keep them comfortable and familiar in their surroundings,” says Baier, who’s also a part of a task force committed to helping seniors transition from home into retirement living.

New model of CCRCs

The CCRC-without-walls program is not exactly a brand-new concept—they’ve been around since the late 1980s. But development has been slow, says Maag, with factors including the economic recession and a lack of understanding of the program.

There are currently about 12 existing CCRC-without-walls programs in various stages of development or implementation, Maag estimates, and at least a few have been around for a number of years. Others, like the program started by Evangelical Homes of Michigan, are more recent and were begun within the past couple years.

It’s important to distinguish this model from other CCRCs that have programs providing services to seniors in their homes, ranging from home health care to personal care to chore services, Maag points out.

“The important difference is a CCRC without walls program takes the concept of the life care contract and a bundle of services into the home,” he says in February 2012 paper about the model. “A CCRC without walls contract is a comprehensive approach to providing the health and wellness lifestyle to seniors in their homes. It is not just services which can be purchased on as needed basis.”

Reverse mortgages and at-home care

Ultimately, reverse mortgages don’t work for everyone, and they won’t necessarily work with this CCRC model, Baier says. 

“In general, it’s a good idea,” says Norma Coe, associate director for research at the Center for Retirement Research at Boston College. “There is one concern, though, especially when you get to a stage where you need 24-hour care: It’s more expensive to be [providing] it at individual houses.”

The issue is that while a reverse mortgage lump sum may initially help seniors buy into the CCRC model, they might not be able to sustainably afford the monthly fees which may increase as the level of care they need intensifies.

It’s difficult to calculate the premiums for more intensive care, Coe says, adding that it’s “more about the [CCRC] model than whether reverse mortgages are able to pay for it.”

Still, using a reverse mortgage could definitely be an option for those who have high-valued homes, as they have more equity to draw down.

Because most of the CCRC-without-walls programs are relatively new, it’s still unknown how the model will work when people get into the higher (and more expensive) levels of care, and methods for payment vary.

“At Evangelical Homes of Michigan we try to provide a variety of options and solutions to assist clients in managing payment of their entry fee for a LifeChoices membership including various payment plan options,” said Denise Rabidoux, president and CEO of EHM. “To date we have not had a client approach us to discuss reverse mortgage as an option.”

EHM, along with certain other CCRC-without-walls providers, hasn’t yet reached the point where “residents” need skilled nursing, according to Steve Hopkins, the vice president of Wellness and Home-based Solutions at EHM.

But receiving care at home is a “very desirable” commodity, Coe says, and demand for this commodity will likely continue to grow.

Written by Alyssa Gerace

In letters sent on Feb. 27, March 22, and April 12, 2012, Covington made proposals to acquire Advocat, eventually writing a public letter dated May 11 complaining that Advocat hadn’t shown any interest—which it owed to its shareholders—in such a transaction. 

The investment firm increased the value of its proposals, reaching $8.50 per share (for $44 million, considering the 12% of shares already owned by Covington affiliates), which it contended represented “extraordinary value” to the operator’s shareholders considering it was a 96% premium above the previous day’s closing stock price of $4.34.

Advocat wrote back to Covington in a letter dated May 11 saying that its board “takes its fiduciary duties very seriously” and that it had decided not to pursue a discussion after thoroughly evaluating the proposal. 

The board determined the proposal was not in the shareholders’ best interests at the time, according to Advocat’s president and CEO, Kelly Gill. 

“The Board believes that stocks in our industry, and Advocat’s stock in particular, are currently undervalued by the market and that the implementation of our strategic initiatives is the best way to enhance value at this time for all shareholders,” Gill wrote in the letter. 

However, the plaintiff alleges in the complaint that Advocat breached its fiduciary duties by rejecting the most recent offer by Covington, claiming the operator “refused to even consider” the proposal. 

The lawsuit has been filed by a local plaintiff law firm Barrett Johnson, according to the Nashville Post, and claims that Advocat’s board has “engaged in misconduct by employing various ‘draconian antitakeover defenses’” in the past.

Written by Alyssa Gerace

Senior living and personal care communities need to be prepared for the shift in consumer behavior. With the shift come questions like, “How safe is my medical information?” “Who has access to my information?” And, “How will you ensure that my personal medical information remains safe and private?”

Following are a few steps communities can take to ensure they’re fully prepared for the change – both technologically and culturally.

Don’t forget the basics

In the past, the clinical staff was not widely required to use technology-forward devices, such as laptops, tablets or smartphones. Although young nurses tend to be more tech-savvy, and the devices continue to penetrate consumer lifestyles, community administration should not assume that all staff members are equipped with the knowledge and experience to manage such devices.

Know that there will likely be a learning curve with both the devices and the new software. Implementing training programs can be an effective solution, and many technology providers that facilitate the shift to electronic health records can help communities with the necessary training.

Embrace the “perks” of EHRs and teach staff to do the same

One of the greatest benefits of electronic health records is increased accuracy in patient care. Electronic records provide greater visibility into patient care such as the frequency and amount of medication administered, tracking of vital signs and identification of inconsistencies and abnormalities.

However, nurses and clinical staff trained to use paper records may not be acclimated to new processes. Without consistent oversight possible in the management of paper records, clinical staff could track patient information at the end of their shifts, or upon return to the nursing station.

To fully leverage the advantages of a digital records environment, and to deliver the highest quality of care to residents and patients, clinical staff needs to be trained to use the devices accurately, which means entering information as care is administered.

Make security part of the culture

Addressing obvious security concerns should involve new technology and a change in the culture of the organization. Work with your technology provider to be sure the right layers of security are in place – including authentication processes, the encryption of records stored on mobile devices, and others. But, know that security goes beyond technology and technical security processes. Patient records are only as safe as the practices being implemented.

Staff should be aware of the impact their actions can have on the security of resident health records. Lending out credentials, like passwords and physical access devices, can be considered a breach of security. Loaning credentials to a coworker or friend who in turn accesses the information maliciously can cause consequences that fall back on the credentialed user. Teach staff that access to personal information should be protected, and that when it is not protected, the community, its residents and the staff member can be faced with serious consequences.

Hold Staff Accountable

While device management and security process training is essential, it might not be enough. Policies need to be put in place that not only educate but also include consequences for willfully compromising the integrity of patient health records. Policies should be tailored to a community’s mission, and hold staff accountable for continuing education and training, as well as safe security practices. When everyone is working together as a team, toward the same goal of keeping patient health information private and secure, it boosts confidence in the community for its residents.

With the mandated deadline for EHR transitions fast approaching, senior living and personal care communities across the country are continuously recognizing the advantages and challenges associated with the shift. Communities that make the extra effort to ensure that staff are properly trained and security is woven into the fabric of the community will experience a smoother transition, better protecting the integrity of private resident health information.

Written by Dennis Stufft, President at Prelude Services

The L.A. Times writes: 

India, a nation that prides itself on the inclusive embrace of its extended families, is slowly accepting a feature long common in the West: elder-care facilities.

Social changes find more urban families rejecting traditional arrangements involving grandparents, parents and children under one roof, preferring life without nosy in-laws. Economics is also playing a role as more professionals work abroad or in large Indian cities, too busy to care for aging parents.

But things work both ways, sociologists say. More older people also prefer living with others their age, even enjoying a bit of romance away from the disapproving gaze of grown-up children.

“Life here is easier than living with my family in all respects,” said P.V. Bhaskasan, also a retired teacher. “There’s too much fighting in extended families.”

As India’s traditional social contract frays, however, seniors are also more subject to neglect, physical and mental abuse and depression. In 2010, 11,100 people older than 60 committed suicide, a 20% increase from 2008.

“In abuse cases, parents don’t want to come out against their own children,” said Anjali Raje, deputy executive director of the International Longevity Center in Pune. “So it’s swept under the rug.”

The idea of senior homes has long carried a stigma in India.

…But the picture is changing, with the number of India’s people older than 60, now at 96 million, expected to double by 2030. Critics say government planners are so enamored of the “India shining” narrative of its young people that they all but ignore the demographic shift.”

Read the original article. 

Written by Elizabeth Ecker

A 2012 study on senior care franchises published by Franchise Business Review, a Portsmouth, NH, market research firm that tracks franchisee satisfaction, notes a “highly fragmented (industry) with over 35 franchise brands and many more non-franchise businesses competing for market share.”

[However,] Recruiting, training and keeping qualified caregivers can be a challenge.

Still, says [Rudy] VanDerLaan, whose Comfort Keepers franchise provides nonmedical services in a territory that runs from Oak Brook to Glen Ellyn, “Senior care can be a good business if run properly.”

Because home care isn’t always appropriate, a handful of franchises help seniors transition to assisted living, nursing homes or other specialized housing have surfaced recently.

For example, Rick Graffagna owns an Assisted Transition franchise in Woodridge; Maryann Murnin owns an Always Better Care franchise, Palos Park, that has a transitions component. Their role is to help seniors find alternative housing.

The two transition-oriented franchises function as referral sources and get commissions once a senior moves into a recommended facility.

The article notes that the franchise owners often cited “compassion” and “calling” when giving background on how they started their businesses. “Sometimes, money isn’t everything,” it says.

Read the full Daily Herald piece here. 

Written by Alyssa Gerace



For one community, going electronic meant seeing its annual medication errors drop by more than 90%.

Electronic records system vendors and a director of clinical services for a senior living community weighed in on transitioning to and using electronic Medication Administration Records (eMARs) during a session at ALFA’s Community 2012 event in Dallas.



There are certainly considerations and potential hurdles to face, but the outcome was ultimately “worth it,” they say. 



Some healthcare reform goals include reducing paperwork, administrative costs, and perhaps most importantly, hospital readmissions, and using eMARs can help with this, said Carolyn Dibert, RN, Director of Clinical Services at Country Meadows Retirement Communities.



From a nurse’s perspective, electronic recordkeeping can also reduce medical errors and improve quality of care, she added. 



As assisted living providers begin partnering with hospitals and other care providers along the continuum, it will become more and more important to be able to provide data, or “actual, quantitative evidence” to prove they’re providing quality care.



“Using electronic mediums to quantify and track what we do, and be able to share comprehensive and cohesive reporting, sets us up to be providers of choice,” said Dibert. 



When Country Meadows began looking into implementing an eMAR system a couple of years ago, it wanted three things: to decrease medication errors and improve both medication management and Quality Measures monitoring.



Eighteen months after implementation, Dibert says Country Meadows communities saw significant improvement in all three areas, with “100%” positive feedback from practitioners and users of the system.



In fact, after an approximate study of medication errors in six out of Country Meadows’ 11 communities (located in Pennsylvania and Maryland), Dibert saw the number of errors decrease from about 212 in 2010, to just 20 in 2011.



Each company considering a transition into electronic recordkeeping needs to figure out what it is that they’re looking for as they begin shopping around, the RN advised.

Things to consider:

• Using eMARs requires having computers on each medication cart—primary and backup.
• What are the community’s wireless capabilities, if choosing an Internet-based (versus server-based) system? Are there “dead zones”?
• Is it possible to customize a program to fit a particular community?
• Who will provide both initial and ongoing training (for new hires or software updates)?


Dibert recommends establishing a checklist of questions to consider when speaking with vendors. That’s a smart idea, agreed representatives from software company Yardi, which offers a web-based senior housing administrative platform with a resident management component. 



When choosing a platform, think about system reliability—how long has it been in use?—along with how quickly it can be implemented, the extent of its mobile access (for tablets or smartphones, for example) and its remote reporting capabilities, said J.R. Southerland, a regional sales executive at Yardi. 



Once a system is chosen, there are still more things to consider and do in the days, weeks, and months prior to implementation and roll-out. 



This can include notifying residents and their families of the new system; sending courtesy letters to physicians to inform them of the switch from paper records to eMARs, and meeting with the pharmaceutical partner to confirm the process for entering orders into eMAR database, as they must have a list of each resident’s medications.



Pharmacy involvement is crucial, Southerland emphasized, and it’s important for communities to set expectations and policies with their pharmaceutical partners.



“eMARS are not plug and play,” the Yardi representative cautioned the session’s attendees, adding that there needs to be buy-in to the system from the administration down to those who will use it on a daily basis. “The eMAR is an amazing tool, but if you’re not using it properly it’s not going to do what it was intended to do.”

An eMAR is a tool, agreed Dibert, and tools are only as good as the people using them, so make sure staff understand the goals associated with implementing a system. 

Ultimately, “It’s been a big help to us,” said Dibert of Country Meadows’ experience. “It’s worth it.”

Written by Alyssa Gerace

This article is sponsored by the Assisted Living Federation of America (ALFA) as part of its efforts to advance excellence and explore topics impacting the future of senior living. For more information about ALFA, visit www.alfa.org.

While it might make sense that if more people are moving into an assisted living community, less are going to nursing homes, the study makes a key observation: nursing homes’ private pay census—often used to subsidize Medicaid residents, along with Medicare reimbursements—is shrinking as well.

Nursing home occupancy declined from 93% in 1977 to 87% in 1995, and still further to 83% in 2003. During this same timeframe, the acuity levels in nursing home residents rose. The researchers found that a 10% increase in assisted living capacity led to a 1.4% decline in private-pay nursing home occupancy, and a 0.2–0.6% increase in patient acuity.

However, while assisted living communities and nursing homes do compete with each other to a certain extent, people who go into nursing homes generally need a higher level of care than those who go into assisted living. The fact that a majority of nursing home patients use Medicaid, while a majority of assisted living communities only accept private payers, further lessens the pool of people who are eligible residents for both.

“Given that assisted living has relatively little Medicaid coverage and is not a substitute for Medicare-financed post-acute nursing home care, we would not expect the emergence of assisted living to have an effect on the number of Medicaid or Medicare nursing home residents,” said the researchers. 

There is still a market for nursing homes, as research did not find a significant association between assisted living growth and the likelihood of nursing home closure. However, considering other factors such as Medicaid payment freezes, high liability insurance costs, and a shortage of registered nurses, researchers believe the nursing home sector faces an “uncertain” future. “In the short-term, facility closures and consolidation will likely occur in many markets,” they wrote.

Access the full study, “Assisted Living Expansion and the Market for Nursing Home Care” here. 

Written by Alyssa Gerace 

More than 300,000 people aged 55 and older are serving their communities through three Senior Corps programs (a division of the CNCS): Foster Grandparents, Senior Companions, and RSVP. 

“At a time of increased need and declining resources, volunteers age 55 and over are stepping in to fill the gaps,” said Wendy Spencer, CEO of the Corporation for National and Community Service. “Today, more than ever, communities need the talents and skills of all Americans to help move this nation forward. Senior Corps volunteers are delivering enormous social and economic benefits to our communities and demonstrating that service is good for the nation and those who serve.”

Not only do these programs promote helping others, but the volunteers are able to improve their own lives through an active, healthy lifestyle. Research indicates there are mental and physical health benefits associated with volunteering, including lower mortality rates, increased strength and energy, decreased rates of depression, and fewer physical limitations, according to the CNCS. 

“As the leading edge of the boomer generation reaches the traditional retirement age of 65, nonprofits and communities should be poised to take advantage of this extraordinary wave of human capital that has the potential to transform our nation,” said Dr. Erwin Tan, Director of Senior Corps at the Corporation for National and Community Service. “America’s baby boomers are the largest, healthiest, best-educated generation in history, and they can leave an incredible legacy through service to others.”

Volunteerism is a way senior living community developer and management company Greystone Communities engages its residents and attracts a younger census, according to Brian Schiff, senior vice president of Planning and Financial Services at Greystone. 

Some Greystone communities coordinate with anywhere from 50 to 70 local organizations, with volunteer coordinators finding volunteer activities with schools or organizations like the YMCA. “Seniors can become tutors for kids, and some of our people are involved and engaged in coaching youth sports,” Schiff said. “Our activities people now act as volunteer coordinators, not just in-house activities people.”

May is Older Americans Month, and Senior Corps Week was celebrated May 7­­­–11. Click here to learn more about volunteer opportunities.

Written by Alyssa Gerace

Everest Real Estate Advisors, headquartered in Minneapolis, Minn., recently closed on a $12 million refinancing loan for Select Senior Living, a 90-bed senior housing facility in Coon Rapids, Minn., reports Real estate Journals.

The advisory firm provided the refinancing through HUD’s Section 232/223(f) loan program for the borrower, Coon Rapids Select Properties, LLC, through commercial real estate finance company Walker and Dunlop (NYSE:WD). The loan features a 3.25% interest rate with a 35-year term and a 35-year amortization schedule.

NCR Uses Two HUD Program Grants to Renovate Community, Make “Green” Upgrades

National Church Residences has used two Department of Housing and Urban Development grants totaling nearly $8 million to make upgrades to and renovate Hopetown Village, which recently held a grand reopening event showcasing 41 newly-remodeled assisted living rooms and new “green” amenities, reports the Chillicothe Gazette.

The community is expected to save 10-20% on energy costs after using a $1.7 million HUD grant used to upgrade lighting, windows, faucets, and appliances in its assisted living apartments.

HUD’s field office director said his agency is trying to encourage facility upgrades to save on operating costs.

NCR used a $6.1 million grant through HUD’s Assisted Living Conversion Program to renovate its 41 assisted living rooms; among its 41 residents, 22 were taken out of nursing care facilities, and the organization hopes to create a model of care that can keep seniors out of nursing facilities.

Oak Grove Capital Provides $10 Million Bridge Loan for Mass. Assisted Living Community

Oak Grove Capital recently originated a $10 million bridge loan to refinance Bayberry at Emerald Court, a 90-unit assisted living and memory care community located in Tewksbury, Mass.

An Oak Grove Capital affiliate provided an 18-month, interest-only loan to a limited liability company sponsored by The Northbridge Companies and Fundamental Advisors LP. Northbridge, a senior community owner and operator based in Boston, manages the Bayberry.

“The bridge loan enabled the borrowers to lower the interest rate on expensive debt they had obtained prior to turning the property around,” said Bill Kauffman, managing director of seniors housing at Oak Grove Capital. “The primary term, along with a six-month extension, will provide the borrowers sufficient time to grow revenue in advance of refinancing with an Agency permanent loan.”

Oak Grove was able to close the financing two days before Northbridge’s 30 day deadline.

HFF Secures a $17.4 Million Freddie Mac Refinancing for Calif. Senior Housing Community

HFF (Holliday Fenoglio Fowler, LP), owned by HHF, Inc. (NYSE:HF) recently arranged a $17.4 million refinancing for Nantucket Creek, a 172-unit senior housing community located in Chatsworth, Calif.

The commercial real estate services provider worked on behalf of Universe Holdings Development Company to secure the 10-year, 3.88% fixed-rate loan through Freddie Mac to replace the community’s senior note, originated in 2004 when Universe Holdings original acquired the property from its developer. The loan will be securitized through Freddie Mac’s CME Program, and HFF will service it through its Freddie Mac Program Plus Seller/Service program.

In a separate transaction, Universe Holdings paid off an existing mezzanine participating debt, and now owns the property outright.

Nantucket Creek, located in the northwest San Fernando Valley, is 98.5% leased and is situated on 13.53 acres of land. Along with its one-bedroom, one-bathroom units, the community features amenities such as a recreation room, clubhouse, library, fitness center, swimming pool, billiards room, shuffle board court, and tennis courts.

Charles Halladay, director of HFF, led the team on the financing transaction.

“We are very pleased with the positive outcome and the timing of this transaction. Our investors managed to improve their equity and cash flow position by participating in an orchestrated effort that concluded the complicated transaction on the day both loans were due,” said Henry Manoucheri, chairman and CEO of Universe Holdings, in a statement.

Ventas Renews Lease with Kindred Healthcare for 10 LTACs

Chicago-based real estate investment trust Ventas, Inc. (NYSE:VTR) recently entered into a new lease with Kindred Healthcare, Inc. (NYSE:KND) for ten long-term acute care hospitals owned by Ventas for an initial rent of $28 million annually, beginning on May 1, 2013.

The lease covers the ten LTACs whose lease was scheduled to expire on April 30, 2013, and has an initial term of ten years with annual CPI-based escalations ranging from 0 to 4%. Rent for the ten LTACs between May 1, 2012 and April 30, 2013 is $22 million.

“We are very pleased to have reached a mutually beneficial new lease agreement with Kindred, who is the best care provider for these ten LTACs, at a significant rent increase,” Ventas Chairman and CEO Debra A. Cafaro said in a statement. “We are excited to launch our re-leasing effort for 54 skilled nursing facilities and expect to successfully lease those licensed assets to suitable care providers.”

Regarding the 89 healthcare facilities Ventas currently leases to Kindred, whose lease terms were set to expire on April 30, 2013, Kindred will remain the tenant for 35 assets for a total annual rent (beginning May 1, 2013) of approximately $76 million.

Ventas is also working on a plan to re-lease 54 skilled nursing facilities whose terms are set to expire on April 30, 2013.

Cambridge Celebrates Record 2011 Financing Transactions

Cambridge Realty Capital Companies is celebrating a record-setting 2011, as it closed 36 separate HUD Section 232 loan transactions totaling more than $331.9 million

In 2011, the company closed FHA-insured HUD LEAN loans in seven states—21 of them in Illinois, with the rest in California, Kansas, Michigan, Nevada, Ohio and Texas.

The year’s funding transactions came in a range of sizes, from the smallest—a $2.8 million for a 78-bed skilled nursing home in South Beloit, Ill.—to the largest,  a $20.8 million FHA-insured HUD LEAN loan.

Cambridge expects HUD’s Section 232 lending program, in terms of timeframes for processing, to keep improving in 2012.

Canadian REIT Chartwell Seniors Housing (TSX:CHS.UN) and ING Real Estate Australia Pty are selling the five-property Bristal-branded portfolio, all located in New York, with a total of 768 assisted living suites. 

The Bristal Assisted Living brand was originally founded by Engel Burman in 1999; the group built, managed, and owned the five communities (plus a sixth owned by ING that Engel Burman and Harrison Street are also purchasing) until 2007.

The price for the five Chartwell/ING communities would include about $199.6 million of mortgage debt that will be assumed by the purchasers. The buyers will pay the rest of the purchase price in cash, and the deal is expected to close in the fourth quarter. 

“This strategically situates our company for future regional growth utilizing the platform we created in the late 1990s,” said Engel Burman President Jan Burman in a statement. “Owning these assets once again while aligning ourselves with a strong institutional partner who shares our vision for growth ensures that The Bristal will remain the benchmark for excellence in assisted living.”

Engel Burman recently opened a seventh Bristal assisted living community in East Northport, currently in lease-up phase and approaching stabilization; the property will also be a part of the Harrison Street/Engel Burman joint venture. The real estate development company has another three communities under construction in New York and New Jersey, and controls a few more parcels of land in various stages of development that are expected to break ground within the next couple of years.

Written by Alyssa Gerace

“The biggest barrier is a lack of understanding of the model,” said Ginger Lynch Landy, of Hodes & Landy—ALFA’s legal representation in New York.

Through ALFA’s New York chapter, the group was able to craft what many on the panel hoped could be the template that other states could adopt. Getting the states on board with the assisted living concept can take time, but recent efforts have shown it’s possible.

Consulting With Other Groups for Policy Development

After an almost decade-long campaign to work with regulators and legislators in New York, Landy said the association is consulting with several of the states’ working groups, such as the Medicaid redesign team, affordable housing work groups, the paperwork reduction group, and the adult care facilities and assisted living residences task force.

“Through groups like these, providers have a voice at the table when decisions are being made regarding resident care,” said Landy. “It has all been very positive and allows us to help develop the policies, not just react to them [when they're negative].”

Getting to this point with the state hasn’t been easy; rather, it’s been time-consuming. 

“We’ve come a long way in the last eight or nine years,” said Landy. “It’s like a marriage: you have to keep at it and stay with it.”

Emphasizing Assisted Living’s Value

Regulators and lawmakers need to understand how important assisted living can be to the state. 

“Developing the credibility with the regulators, so they know there is nothing to hide,” she said. “Make the fiscal argument and show how we bring value to the state by bringing jobs and development.” 

It’s also a great option for the consumers, who on average will spend less money paying for assisted living compared to a skilled nursing setting. A study from Genworth Financial found the national median monthly rate for assisted living was $3,300, and roughly $6,000 for skilled nursing in a semi-private room. 

“It was interesting to see how much they really didn’t understand assisted living [in New York],” she said. “At the end of the day, because of the persistence and tenacity [of everyone involved], that the regulations went through with the right outcome.” 

Dealing With Regulatory Challenges

Despite promising advances in New York, groups representing the nursing home industry in states like South Carolina and Rhode Island are challenging assisted living operators.

“Rhode Island is a very difficult place to do business, [in part because there is] a very strong nursing home lobby,” said Handelson.

Calling the state’s regulations antiquated, it’s forcing the providers to be more of a one-size-fits-all approach, which doesn’t work for residents, she said.

South Carolina is similar to Rhode Island in that they’re dealing with strong nursing home lobby groups that are fighting to preserve their businesses. 

“Our regulators are not going to fight against the skilled nursing associations,” said Laura Williams, executive Director of the South Carolina ALFA chapter. “[Assisted living providers] are the new kids on the block, we’re not the big guys yet.”

Written by John Yedinak

Both sides of the political aisle can agree that the nation’s healthcare system is in need of some serious reform, even if not everyone agrees with President Obama’s particular version. At the hearing, four executives working at the field level for implementing innovative ways of delivering healthcare weighed in on their progress before Sens. Orrin Hatch (R-Utah) and Max Baucus (D-Mont.).

Innovation necessary to transform patient care

In his remarks, Sen. Baucus quoted Albert Einstein, who once said, “If you always do what you always did, you will always get what you always got.”

Considering that healthcare premiums doubled between 2000 and 2010, Baucus said it was “clear” the nation couldn’t keep traveling along the same path it has been.

“We all have common goals: to reduce health care costs and improve health care quality,” he said, adding that innovation plays a key role. And, he continued, “the innovation we’re talking about transforms the way providers deliver care to patients.”

There’s currently a “silo” system, said Sen. Hatch in his remarks, where patients are often seen at multiple settings—doctors’ offices, hospitals, or nursing homes—and the various healthcare providers aren’t doing a good job of communicating with each other, many times resulting in an unclear picture of a patient’s needs. 

“Our fee-for-service system provides little financial incentive to manage care properly,” said Hatch. “Instead, the incentive is to increase the volume of services. Reducing costs will require that patients receive the right care, in the right place, at the right time.”

Collaborate, coordinate, and cooperate 

In order to transform the healthcare system, there will need to be a lot of collaboration, cooperation, and aligned incentives between providers, payers, patients, and policymakers, Kindred Healthcare’s CEO Paul Diaz emphasized during his testimony before the committee.

Post-acute care has a “critical role” in coordinating care and lowering healthcare costs, as 35% of all Medicare beneficiaries admitted into an acute care hospital require post-acute care upon discharge.

“The problem from a care perspective is that as patients move from the acute care hospital to multiple post-acute settings there isn’t anyone, particularly physicians, who are responsible for coordinating care and driving the outcomes throughout the patient’s entire episode,” said Diaz. 

The resulting “silo-based” delivery system, featuring a lack of coordination among providers regarding when,where, and how to transition patients, doesn’t efficiently utilize healthcare services based on individual patient need, he argued. 

Building a post-acute care continuum

Kindred’s goal is to become a post-acute continuum of care provider that can integrate other providers’ service offerings as it delivers care to patients. Being able to coordinate care can reduce hospital admissions, which in turn reduces spending and is conducive to a person-centered care model.

Coordination can look like establishing committees with partners to formally identify shared goals and strategies for improving care quality and management, Diaz said. His company has established “dozens” of such committees across the nation with hospitals, health systems, physicians, managed care payers, and private and public ACOs. 

“This type of clinical integration can yield significant and immediate results even under the current fee-for-service payment system: As a result of our efforts in collaboration with our acute hospital partners, Kindred has reduced re-hospitalization rates by over 8% in our LTACs and Skilled Nursing and Rehabilitation Centers since 2008,” he said in his testimony.

The post-acute care provider has found that the number of patients returning home from all of Kindred’s post-acute service offerings is increasing, attaching more importance on coordinating care between settings to achieve quality and control costs.

Instability in the system can wreck innovation

There are barriers to coordinating patient care, and one of those is payment instability under the current system, said Diaz, who asked the Committee to consider the impact of additional payment cuts, including the impending 2% sequestration cuts to Medicare payments set to take effect in January 2013 for 10 years.

The cuts would negatively affect post-acute care providers’ ability to carry out pilot programs for care coordination, he said. “Innovation requires stability, and more payment cuts will cause a level of instability that I fear will prevent the kind of innovation needed to transform our healthcare system.”

Click here to access the remarks and testimonies given during “Progress in Health Care Delivery: Innovations from the Field.”

Written by Alyssa Gerace

Pennsylvania is one of 30 states that have filial responsibility statutes—laws that impose a duty on adult children to care for their indigent parents. About two-thirds of those states, including Pennsylvania, allow long-term care providers to sue family members to recover unpaid costs. The rest, including states such as Massachusetts, have no recovery provisions. However, failing to care for a parent is a criminal offense. In the Bay State, the penalty is a $200 fine or up to one year in jail.

The rules vary widely from state to state. But most take into consideration the adult child’s ability to pay. For example, a daughter would be protected if she also has extensive bills for her own child’s college education. In some states, such as Maryland, only the nursing home resident is responsible for a bill, although family members can voluntarily agree to help pay.

And federal law prohibits states from going after families after someone is already eligible for Medicaid long-term care benefits or from including an adult child’s income and assets when determining whether a parent is eligible for Medicaid. As a result, these laws apply only before people enroll in Medicaid.

In the case cited above, a woman spent six months in a nursing home while recovering from an automobile accident. Her stay cost far more than her monthly Social Security and pension income, and her Medicaid application was still pending by the time she left the facility—leaving the bill unpaid. 

Many states have filial responsibility laws, but few have traditionally enforced them. That may be changing, says Forbes, as nursing home costs increase and residents have less ability to pay them.

“While these laws don’t directly apply to Medicaid recipients, they may force children to pick up their parents’ long-term care costs long before mom is ever eligible for Medicaid,” says the article. “Such a step could still shift significant costs from states to families.”

Read the full Forbes article. 

Written by Alyssa Gerace