An argument for the SHIFT model of senior care
Jeff A. Petty
Healthcare reform is certainly overdue. Unless there are fundamental reforms in the Medicare and Medicaid programs, they will bankrupt our country within a decade or two. Change is imperative.
But as is frequently the case, aging services is largely an afterthought. This is not only frustrating but also self-defeating—seniors account for 12% of the population but nearly 40% of the spending. Therefore, any reform that fails to address aging services is temporary at best.
That is why Wesley Enhanced Living is working to create a better solution. We have introduced the Senior Health and Housing Initiative For Transformation, or SHIFT. The SHIFT model is based on the idea that congregate living settings like a continuing care retirement community (CCRC) are the ideal environment to implement care management systems that lower cost and improve quality. SHIFT combines existing resources and spending—private, Medicare and Medicaid—to create a comprehensive, holistic and coordinated, integrated delivery model that promises to improve access and produce better outcomes at an overall lower cost.
As all of us working in aging services know, the profound fragmentation of the field and the ”volume not value” incentive structure are the seminal challenges to both improving outcomes and lowering costs.
I liken our current aging services programs to buying a car piece by piece: assembly required. Every senior must figure out what parts (services) they need and figure out how to put this “car” together themselves. They can then meet with their mechanic (doctor) for 15 minutes every month to get his or her advice and see how they are doing. But we really shouldn't pay full price for every part, and seniors certainly need more help in putting it all together.
SHIFT builds on the Program for All-Inclusive Care for the Elderly (PACE), which is an adult day care model for frail elderly who would otherwise be in a nursing facility. PACE receives capitated payment streams from both Medicare and Medicaid and, in return, assumes responsibility for providing or assuring all the healthcare needs of the client, including physician services and acute care. Most agree that PACE delivers better answers at a lower cost by coordinating the services provided and the payor, provider and client all have similar incentives and goals.
PACE, however, is limited because it serves frail, nursing home eligible seniors for only eight hours a day. PACE clients generally need a caregiver or access to other resources for the balance of the day. The program does not address housing challenges for seniors.
SHIFT overlays a PACE approach onto a continuing care retirement community (CCRC) to obtain the benefits inherent in PACE and surmount the limitations. A CCRC already employs nurses, therapists, social workers, etc. that a PACE program will hire, and by collocating housing and services, offers the ideal environment to coordinate care delivery and maximize outcomes.
SHIFT would receive a capitated payment from the Medicare program to cover the traditional Medicare services—hospitalization, physician services, etc. In turn, SHIFT would assume the risk and responsibility for either providing or contracting for those services. SHIFT becomes a Medicare Advantage plan, one that not only benefits by keeping its clients healthier but also one that has the ability to impact that.
To improve access to a broader population, we need to expand the Medicaid program. Like a traditional CCRC, the SHIFT community would collect an entrance fee and a monthly fee, which is contemplated to be a Type A (or life care) contract where the fee is fixed regardless of level of care. The SHIFT concept assumes when someone exhausts his/her assets, regardless of his/her health status, Medicaid would step in and make up any gap between the monthly, market-based fee and the amount an individual can afford (monthly income less an agreed-upon holdback for personal needs). In exchange, the CCRC assumes the risk, like Type A CCRCs do now, of increased levels of care in the future. Effectively, Medicaid spends a little on a lot of people instead of a lot on a few number of people, such as those currently who are in a nursing home and have exhausted their funds.
Avalere Health LLC, a Washington- based health policy and modeling firm, studied the SHIFT proposal. Avalere determined that, under current law, SHIFT could become a Medicare Advantage plan and capture the Medicare payment. Avalere also determined that, because SHIFT proposes to expand the Medicaid program beyond its current mandate of poor and frail to include a healthier group, SHIFT would either need legislation or apply through the state for a Medicaid waiver. Under either scenario, it would be necessary to show that SHIFT would be budget neutral to Medicaid.
Avalere created a financial model to assess the impact of SHIFT on the Medicaid program compared to current law for a hypothetical cohort of middle class people. Its model found that the Medicaid program in a SHIFT community would actually achieve more than a 20% savings compared to the base case.
Despite Avalere's remarkable findings, our expectations have always been that the real savings in SHIFT would be on the Medicare side, and we still believe that. As a frame of reference, Avalere estimated that the cohort of 1,000 hypothetical people would spend just short of $20 million of Medicaid funds in the base case and $80 million in Medicare funding. Clearly, if SHIFT succeeds in “bending the frailty curve,” there is a real and achievable opportunity to realize substantial savings in Medicare, as well as Medicaid.
Two of the most promising models for reform are bundling and care coordination. Care coordination is at the core of the SHIFT model and SHIFT will have an enhanced opportunity for success with the frequency of interaction between the individual and the coordinator because of the housing component of SHIFT. Bundling is generally discussed in terms of post-acute services. But SHIFT—by bundling “pre-acute” services to avoid the acute phase—would be in a stronger position to effectively manage any post-acute complications than any other provider.
SHIFT is an idea whose time has come. We can do better for our seniors by fundamentally rethinking how to deliver these services—save money by doing it smarter. Payment reform is too focused on how to divide up who pays the bill for healthcare and aging services when it needs to be about saving money and spending less.
Jeff A. Petty is president and chief executive officer of Wesley Enhanced Living, a multi-site CCRC organization based in suburban Philadelphia.