Network participation critical to LTC's future

Betsy Rust
Betsy Rust

The finances of running a long-term care facility long have seemed like Monopoly. With each patient, you pass “Go,” you collect $200.

The game, however, is fast becoming as complicated as contract bridge, and too many long-term care facilities leaders are saying “pass” on proactive measures to establish participation in burgeoning regional networks.

For medium-sized and smaller facilities not part of well-known larger national provider chains, such as Kindred or Genesis Health, this approach could result in a significant loss of patients and threaten the financial viability of your organization

Sure, dealing with the increasingly dominant Accountable Care Organizations or health plan in your region might seem like an insurmountable task. But with the right mix of data, marketing and negotiation, it might become the financial lifeblood of your organization.

Here are a few steps you can take:

Identify opportunities: Many facilities may feel they run just fine without “reading the market.” But with the growth of health plans, the advent of ACOs, and Affordable Care Act incentives for forming them, facilities must stay plugged in. Talk to other healthcare providers in your local market. Who is forming what networks? Which networks are gaining market share? Look into bundled-payment demonstrations. These risk-bearing, loosely tethered networks of hospitals and post-acute facilities accept payments from CMS in exchange for tackling a certain population, and then aim to manage these patients efficiently.

Get data ready: Despite all the hoopla surrounding Electronic Health Record implementation, having one doesn't eliminate the need for other data collection and analysis. Most networks are familiar with the CMS Five Star rating system that involves variables like survey compliance and staffing levels. 

Readmission rates are also easily quantifiable – and of keen interest to most payers as they are an essential element in controlling total patient costs.

Keep in mind that hospitals and post-acute facilities eyeing potential partners want to know performance data such as length of stay and readmissions by diagnosis. If you can collect and parse your own data in ways that show you can handle different types of patients effectively and efficiently you'll position yourself as a good partner in a network.

Tell a story: Market analysis does not always translate into action and market share. And long gone are the days when the government would reimburse “any willing provider.” So, tell your story the traditional way – with words - but supplement with evidence-based data. Whether it's on websites, through a word-of-mouth campaign with regional providers, or negotiation with ACOs and other networks, build a narrative about why your facility provides service like no others in the area. 

What is your competitive advantage in the marketplace? Maybe it is your Five Star ranking; maybe it's unparalleled resident satisfaction; maybe it's the lowest length of stay in the region. Figure out what's missing in the emerging or dominant network, and fill the voids. 

Improve.  To be the best partner you can be, fill gapsEven post-acute facilities must plan for sudden emergencies among stable patients. Work on your weaknesses. Perhaps your length of stay is high. Perform better on features you know are publicly tracked by ACOs and bundled-payment demos.

Think Ahead. You've joined an ACO, a bundled-payment system, or an affiliation of providers. The next step: Up the ante to secure your future.  Yes, that is a scary but potentially very rewarding game, and the subject of my next article for McKnight's. That game, by the way, is called Risk. 

Betsy Rust, CPA, is a consulting partner with Plante Moran's senior care and living practice.

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