We’re hearing more about long-term care operators partnering up with managed care companies.
Some firms seem to be doing pretty well. Others, not so much.
In a nutshell, troubled operators seem to be encountering this scenario: initial romance, followed by heightened accountability and reduced payments. As one analyst told me recently: if troubled providers thought Medicaid was a tyrant, wait until they get into bed with managed care.
Now, that assessment may be a bit harsh. The reality is that these marriages can work. But be naïve at your own risk. What success is largely going to come down to is demonstrated quality. And demonstrated quality will largely mean how well post-acute operators reduce rehospitalizations and meet related performance goals.
Many managed care companies are likely to link carrots and sticks to specific metrics. In addition, you will be judged against your peers when potential long-term care partners are being sized up.
For an industry long accustomed to focusing on census levels and fee pegs, this will mean no small readjustment. But it’s time to get cracking.
Avalere Health estimates that 19 states will expand enrollment in managed care plans between 2012 and 2014. “Quality measurements are transforming the way healthcare plans think,” said Avalere Health CEO Dan Mendelson. “You will need to measure your quality and prove your quality,” he adds.
At a recent NIC regional meeting, California Association of Health Facilities CEO James Gomez noted that skilled nursing facilities have an excellent opportunity to show they are the best at post-acute care. But he added it won’t be a walk in the park.
“If you don’t know your rehospitalization rate and that of all the other facilities in your ZIP code, get out of the business,” he said. “Quality will be the No. 1 factor of success.”
For skilled care operators, the path to managed care success should be clear: find a strong niche, be demonstrably good at it, and get business partners you can live with for the long haul.