Understanding consumer choice
If you operate a senior living facility, here is something to put at the very top of your to-do list: Survey your residents to understand the choices they have made in the Medicare open enrollment period, which is closing tomorrow.
I know you are already busy. For most executives, the beginning of a new year also means a few heavy first quarter financial chores: Revisit those annual targets, and gear up for tax time. But for senior living providers, it means a whole lot more – or at least it should. With the proliferation of the variety of plans, as well as Accountable Care Organizations, bundled payment demonstrations and other networks, consumer choices made in the open enrollment period matter more than ever.
The healthcare system is like the Earth's surface: Placid on the outside but with profound tectonic shifts underneath, with the potential to shake up the landscape in meaningful ways that can't yet be seen. You might feel a tremor, but have no idea that your whole world is about to go through a dramatic change.
But after the open enrollment period closes, we can catch a glimpse of what's going on under the surface, take a live look at trends in enrollment, coverage, and networks. This is where you can recalibrate to get ahead of the market. The key word is “can.”
Many miss this opportunity amid the bustle and stress of running a facility.
This year, you ignore this advice at your peril. What we are seeing among our clients is that the shifts taking place now are seismic, and may matter more to your facility's financial future than you could imagine. To ascertain and truly come to grips with your population's healthcare coverage and choices is perhaps the single most important project you could undertake before the end of this quarter.
Why? Because changes in healthcare are having vast ripple effects. There are both direct and indirect forces that can make or break your business.
Staying In The Loop
Recent consumer healthcare coverage choices can certainly have an immediate effect. For instance, let's say you own a facility that provides both apartments and healthcare services. What happens when one of your residents goes to the hospital or to his ACO-affiliated physician, only to be referred to a different nursing facility for services that are already offered at yours? What happens when you discover your nursing unit or your home care agency is not in that resident's network?
This is just one example of an immediate impact. You want to know when your residents have chosen plans that you don't participate in, which could block them from receiving your skilled nursing or home healthcare, or require them to pay a higher out of pocket cost in order to access your facilities. You need to know the cards you have been dealt. You may have an opportunity to influence your stakeholders to modify their elections. For instance, seniors under Medicare have options to make certain changes to their plan during the year.
From a long-term, strategic perspective, you should look closely at this data to become more intentional about the networks with which you participate. Are your residents moving towards doctors who are part of an ACO? Do they seek care at a hospital where there is a bundled payments demonstration? Are you in that network of preferred providers?
To stay relevant, your facility needs to know about these shifts, and the reasons why your clients are making new choices. If you aren't paying attention, you can suddenly find yourself completely out of key referral loops.
In fact, due to how profound these changes can be, some senior communities are considering hiring their own physicians or even starting their own health plans in order to provide comprehensive solutions for their residents.
Getting Ahead of the Curve
There are steps you can take to stop this cascade of events. You can start at the most granular level, the individual, and work up from there. Here is your first quarter 2015 checklist to begin to get ahead of the changes:
1. Know your residents – Send them a written survey asking them who their provider is, who their physician is, and whether that has changed. Better yet, take the survey right when they walk into dinner or other gathering places to get them to pay attention. Make sure you have an up-to-date copy of everyone's insurance card. And lastly, in the survey, ask them why they've changed carriers or doctors, if they have.
2. Troll the CMS website – Little-known fact: CMS maintains a publicly-available database that tracks consumer choices for both Medicare Advantage and Medigap plans, down to the county level. There's no doubt that with a little massaging and a few tabulations, this information could be useful to your facility. Or try this link for information on ACOs and Bundled Payments Demonstrations.
3. Get strategic – You may find from your residents' survey that that they cluster around three or four plans. But the CMS public site might let you know there are ten plans that are popular in your target market, in addition to the ones your residents are signing up for. Perhaps there is one that is very popular, but you aren't seeing anyone from that plan at your facility at all. You probably are not in that network. That's critical information for your business.
Understanding coverage and networks is arguably more important to the future of your facility than ‘static' financial data on current payers and utilization. You might just obtain that critical, clear-eyed view of the trends that helps your business not only survive, but thrive into the future.
Betsy Rust is a partner with Plante Moran's senior care and living practice.