Just when you think the pressures on the senior care business can’t get anymore intense, they do.
We have more aging adults in various states of health putting growing strain on the system. The growing complexity of government policies and regulations creates challenges from a care and compliance perspective. The ongoing shortage of both higher-skilled professionals and minimum wage workers worsens with the wealth of attractive alternatives in today’s economy. And insurance against everyday risks and to cover growing claims for resident abuse and neglect is increasingly costly.
Such are the forces that are driving trends in 2020, with long-term living professionals likely to bear the brunt of their impact. Here are three of the most significant.
1. Operations, skills, capabilities challenged as CMS changes the game on reimbursements and care. Skilled nursing facilities have had since Oct. 1, 2019, to adopt the Patient Driven Payment Model (PDPM) for Centers for Medicare & Medicaid Services (CMS) reimbursements. And all senior living facilities have had since Nov. 28, 2019, to comply with new CMS protocols requiring the provision of trauma-informed care to residents. Both changes have involved diametric changes in past practices and skills, and adjusting will be an ongoing challenge through 2020.
PDPM shifts Medicare reimbursements to skilled nursing facilities from more quantifiable recuperative care to care for more acute, long-term conditions like Lou Gehrig’s Disease or muscular dystrophy. It puts considerable pressure on management and staff to document thoroughly to not only capture all the diagnosis but to protect against escalated risks, to ensure professional staff has the clinical training to satisfy higher-level care standards, and to ensure that effective communications protocols are established and maintained. The complexities of the new protocols for trauma-informed care pose different challenges. Among them is the requirement to build professional teams with the right capabilities and sensitivities to provide trauma-informed care, if not to help create environments that neutralize triggers for past traumas.
2. Better benefits essential to fill acute need for employees (and keep them). It’s not just finding the right people to provide the care mandated by CMS payment and protocol changes that’s increasingly problematic. It’s finding minimum-wage people, when the flow of workers who took such jobs in many regions has dramatically slowed as immigration policies have tightened. Plus, today’s economy has opened the door to alternatives inside and outside the industry that many consider more attractive. The pressure is only going to intensify as the over-65 population grows larger — to an estimated 20% of the population by 2030 — and lives longer.
Today, a record number of positions are open in direct senior care, and the industry’s turnover rates range from 40% to 75%. It puts the onus on employers who hope to compete to get creative with employee benefits. One option could be “mini-med” plans, or low-cost health coverage for those who might not be eligible for traditional, major medical plans, like part-time or temporary employees.
Another low-cost option: Telemedicine, which improves access to care, especially diverting patients from use of high-cost alternatives like emergency rooms.
3. Protecting against rising risks continues to be costly. The challenging operating environment reinforces the point to operators that risk management has never been more critical. It’s not just the adjustments required to meet changing care requirements with fewer people available to do the work, or the “everyday” risks of slips, trips, falls, or common causes of bedsores. Physical abuse and neglect of residents continue to be the cause of significant claims — averaging $406,000 in damages per claim and with settlements whose case values can hit millions of dollars. That’s led to fewer insurers offering coverage today than five years ago, and some are avoiding litigious locations like Kentucky, Illinois and Florida. It’s also going to translate in higher rates – up by 10% to 30%.
With 2020, we start the first year of a new decade – a time of promise along with pressures. The better able you are to anticipate and respond to changes and the risks they pose in today’s dynamic environment, the more you will be able to thrive.
Jordan Parnell is the Healthcare Practice Group leader for Hub International’s Gulf South Region. The practice group consults, designs risk management programs, and brokers insurance transactions. He is also involved in the National Healthcare Team that brokers complex multi state and international healthcare transactions.
Gerald Stoll serves as chief sales officer with the Healthcare Division of HUB International, a leading global insurance brokerage. He specializes in developing comprehensive insurance and risk management solutions for the long-term healthcare industry, including nursing homes, assisted living, senior independent living, clinics and urgent care centers.