They told us everything we need to know about the future — except what to do
Like many people, I often wonder what operators should be doing to prep for the road ahead. So when the final program for this week's NIC Capital Business Strategies Forum listed a session called “The Future of Skilled Nursing,” I made sure to attend.
There's no doubt that the august panel assembled for the occasion offered profound insights and practical advice. In case you're looking for a summary, their points basically amounted to the following: Do something immediately. Or don't. Or maybe sell the business.
To be sure, most of the tips and suggestions were of the “do something” variety. And for obvious reasons.
These are unsteady times. If you don't make the changes needed to stay viable, you risk missing out. As in missing out on referrals, strategic partners, lucrative new service lines and other forms of reimbursement.
And what should this year's I-don't-want-to-be-left-behind operator be doing right about now? Ventilator care would appear to be the flavor du jour. In fact, post-acute operators are ideally situated to take business and market share away from long-term acute care facilities (LTACs), noted Peter Martin, managing director for JMP Securities.
From Formation Capital Chairman Arnie Whitman came this advice: Start thinking about your community as more than just a real estate asset.
“It's more about delivering value to the patient,” Whitman cautioned.
Michael Lugli of KeyBank Real Estate Capital agreed: “Operations is incredibly important.”
As a general rule, skilled care will need to become more specialized, Martin added. Among the likely places he sees this happening beyond rehab: care for COPD patients, and, of course, the previously mentioned vent care.
And as long-term care increasingly looks like short-term care, operators might want to ramp up so patients can quickly be shipped out.
So move quickly. Prepare for shorter lengths of stay. Get into lucrative fields and run a happy, productive shop. Do these and you just might survive.
Then again, maybe it's time to hunker down and wait.
For while panelists were generally bullish on the need to make the tweaks that might make a difference, there was also this reality check to consider: The demographic age wave we've been hearing about may be finally arriving in five years. For that's when the 85-plus cohort will accumulate in numbers never before seen. As a result, skilled care providers can expect to see a very nice uptick in service demand.
Then during a question and answer session, the point was made that beds are selling for record numbers at a time when things like future payments and regulations are looking rather dubious. Not sure what the ideal conditions are for a seller's market, but that description sounds pretty close.
To recap: You should probably adjust for changing needs and payment funnels ASAP. Or you might want to wait. Or you might want to find a buyer.
As a practical matter, that means you simply need to pick the best option. And then hope it doesn't turn out to be wrong.
John O'Connor is McKnight's Editorial Director.