Nursing homes' new mission: Fitting into accountable care organizations

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Anthony Cirillo
Anthony Cirillo

I was speaking to one of my hospital clients and we started discussing reform and accountable care. This particular person was in charge of the hospital's hospice and home care services. In the course of the conversation he said something along the lines of (paraphrasing), "Shouldn't our hospitals own nursing homes?" Aha. Stop.

Hospitals owning nursing facilities is not a new phenomenon. But in the past it has been more about owning residential care facilities—not rehabilitation. With this apparent shift to rehab, it makes more sense. (I feel, though, that the whole residential piece—nursing homes as places to live the last chapter of life—is, in some ways, being dismissed from the conversation.)

Long-term care providers have been struggling to figure out what accountable care is, who will define the care organization and where they fit into it. Some in the aging services field have skipped that conversation and decided that the way they will fit is to buy more of the continuum as Gentiva Health Services Inc. showed in buying a hospice company.

As long-term care providers try to figure out how they fit, hospitals are wondering if they fit with them. How long before a large hospital chain scoops up a nursing home chain?

I recently attended a presentation by the Health Care Advisory Board. Some top-level items of interest shed light on accountable care and may provide some clues as to where to go. The presenter first used Massachusetts as a leading indicator of where things might go.

In Massachusetts, after reform, more people found a "medical home" and increased their use of preventive care. On the flip side, fewer internists were accepting new patients and it took longer to get an appointment.

Implication: Patient experience may suffer. Alternative care methods will start to fill the gaps. The question to ask yourself: How do long-term care organizations fill the gaps?

In April 2010, Massachusetts' state employee health plan began offering two new limited network plans at 20% lower premium cost.

Implication: Not every provider will necessarily be part of the "favored" accountable care organization, so positioning your organization in terms of costs and quality will be paramount. Long-term care providers are scrambling to figure out the implications. Some are seeking Joint Commission accreditation as a posturing move to be part of the right accountable care organization. In some cases, payers are mandating it. Consider accreditation as a leg up in the accountable care horse race.

In the immediate future, price rewards will be given based on care standardization and readmission reduction—still a provider-based model. It will move to include more quality standards and patient experience. But then it will move out of the hospital entirely with chronic care management and disease prevention. (It was interesting to hear the speaker say that this is the new capitation, except, instead of insurers running it, providers are running it.)

Implication: While hospitals must balance short-term survival and filling the beds with building the primary care infrastructure that will be the key to success under reform, long-term care might start thinking beyond rehabilitation and the role they play in chronic care management and disease prevention.

And maybe the most important observation: 

Future competitive positioning will likely be determined by today's decisions. 

Implication: Can you be an "agent of integration?" If you are not, someone else will be and you will be swallowed up accordingly.

Anthony Cirillo, FACHE, ABC, president of Fast Forward Consulting, is a sought-after speaker, healthcare expert, elder advocate and blogger. He works with long-term care facilities in the area of strategic marketing and resident experience. He is the author of "Who Moved My Dentures?" In his spare time he entertains residents in assisted living and nursing facilities. For more, go to www.4wardfast.com and www.anthonycirillo.com.

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