John O’Connor

Nursing facility operators did an odd thing when assisted living began making its presence known about four decades ago. They barely noticed.

At the time, most skilled operators saw little reason to worry about these new upstarts. After all, assisted living was basically a concierge service, right? This new model certainly wasn’t in the business of delivering healthcare services. Besides, assisted living (which now prefers to call itself senior living) was a private pay enterprise. Why sweat over these new pipsqueaks when so many real problems needed attention?

These days, private-pay, lower acuity residents have all but disappeared from the skilled care scene. Now why do you think that would be? And by the way, Medicaid now reimburses those pipsqueaks in just about every state. Small wonder there are now more than two assisted living communities for every skilled care facility nationwide.

I mention this cautionary tale because skilled care operators are very much at risk of repeating a similar mistake. Except this time, the overlooked challenger seems even more harmless. It goes by the name of home care.

Home care a threat? Really, John?

They don’t offer the same kinds of high-end, 24 hour care that skilled care can deliver, right? Well, yes, that is technically correct. At least for the time being.

But here are a few things home care can offer:

  • Care (to include skilled care) at a lower cost
  • A la carte service options and per-hour pricing
  • Care in a much-preferred setting
  • An increasingly complex array of care and assistance options that’s reducing the gap.

We keep hearing about how value-based care is going to be the new litmus test for Medicare and Medicaid payments. Compared to skilled nursing facilities, home care options hold the promise of similar outcomes at a fraction of the cost.

So are skilled nursing facilities doomed? Not necessarily. But they are going to have to up their value game and better document their strengths. They also might want to start treating home care operators like less of a nuisance and more of a business partner. Actually, some of the more enlightened skilled care operators have begun doing exactly that. 

Still, far too many operators continue to see home care as a nothingburger. For their sake, let’s hope they wise up, and soon.

John O’Connor is Editorial Director for McKnight’s.