New LTC business models needed: expert

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As if providers don't already have enough on their minds, a leading analyst recently offered his prescription for future success: change dramatically.

Market and policy shifts will mean that operators need to change their fundamental business strategies, noted Dan Mendelson, Avalere Health's CEO. He spoke in Florida at a conference sponsored by the National Investment Center for the Seniors Housing and Care Industry in March.

As bundled payments take hold, successful operators will need to find complementary partners — particularly physician groups and hospital-centric organizations, he noted. Skilled care settings will need to quantitatively demonstrate expertise in delivering quality care and managing risk. Data systems that work seamlessly with these partners will be essential, he advised.

But while providers will be expected to show greater competence, they will need to do so while their primary funding sources — Medicare and Medicaid payments — are cut.

Staffing is where these competing goals will likely come to a head. “Nursing homes are under so much pressure right now to cut costs, and I don't see much staff increases happening [now],” he warned.