This article is part of your SHN+ subscription.
It seems like value-based care is everywhere in senior living – but managing the risk and reaping the rewards is not as easy as it looks.
In 2024, value-based care has become “somewhat of an amorphous term,” according to Kim Elliott, senior vice president and chief nursing officer at Brookdale. Though there are numerous plans in the market today and lots of demand to implement new ones, not all are offsetting costs in the end.
“When … you look at some of the value-based care CMMI initiatives, you’re going to see that they failed to produce the cost savings that they expected to do,” Elliott said during a recent Senior Housing News TALKS webinar.
But “that doesn’t give value-based care a bad name, per se,” she added.
“That just says that some models fail, some models don’t,” Elliott said.
Through its HealthPlus program, Brentwood, Tennessee-based Brookdale believes it is offering the kind of value-based services that senior living residents will need and want in the years ahead. And it is not alone.
Other operators, including Waltham, Massachusetts-based Benchmark Senior Living and St. Louis Park, Minnesota-based Lifespark, are also forging ahead with their own value-based care plans, with ROI in mind. Leaders of those organizations are enthusiastic about the opportunity in front of them, but also believe the industry must further embrace and understand value-based care to maximize those opportunities.
“We have to realign our organization to embrace value-based care, to understand what value-based care is, to be educated about it, to reorient our thinking about what the care delivery model is going to be,” Benchmark Founder and CEO Tom Grape said during the webinar.
Risk, reward and ROI
The Centers for Medicare and Medicaid Services (CMS) has set a goal of having all Medicare fee-for-service beneficiaries in accountable care relationships by 2030. For many senior living operators, value-based care is helping to fill the gap for residents in need of better care.
Lifespark Founder and CEO Joel Theisen is not shy about his enthusiasm for value-based care. The company was an early innovator in the space, and for years has offered services, such as primary care, that are paid for through value-based arrangements.The company has been able to expand on its services through a variety of partnerships, namely with Blue Cross and Blue Shield in 2022 and UCare in 2019.
“We were always thinking about how to transform the industry and take advantage of the economics of people’s Medicare and Medicaid benefits that we didn’t feel was happening in the current state on both home health or in senior housing,” Theisen said during the webinar.
But the company is not undertaking complicated value-based care for nothing. When determining the ROI of such plans, Lifespark looks for benefits like occupancy and revenue. The operator’s 56 communities currently carry a 94% occupancy rate, according to Theisen.
“We see a big impact on occupancy. We see a big impact on non-lost days for health, because when people go into a hospital, you lose the revenue on the care side,” he said. “We check all those [boxes] and then we compound it with the extra revenue from the payment on the value-based side.”
But Theisen also sees a senior living industry awash in value-based care efforts and opportunities. And he sees a disconnect between operators actually doing the hard work of value-based care, and “charlatans” with “prey-and-play” strategies.
“You can’t just be a participant down the road and let everybody prey on your residents and prey on your economic opportunities,” he said. “Embrace it, but again, you’ve got to be careful, because you can lose yourself really fast.”
Like Lifespark, Brookdale measures ROI in things like hospitalizations and occupancy rates. The operator has in the past touted the fact that communities using HealthPlus have had 78% fewer urgent care visits and 36% fewer hospitalizations for residents.
“Every year we’ve made it better, we’ve improved it, we’ve changed things, we continue to tweak until we can say that our model is getting us the maximum ROI possible,” Elliott said.
In a similar sense, Benchmark looks for increased resident satisfaction and improved health outcomes as a sign that value-based care is offering a good ROI. There are also economic benefits that Benchmark weighs against the risk it is taking on for such plans.
Benchmark is bringing value-based care efforts online in markets like the D.C. area, where the company has a 150-unit community that is part of a larger mixed-use development in Alexandria, Virginia. The community has served as a staging ground for the operator’s growing push into value-based care, and Benchmark is working with companies like Curana Health and the Serviam Virginia Value-Based Care Alliance to achieve its goals.
Additionally, offering additional integrations of healthcare, is a “no-brainer” for the benefits it provides, Grape said. When delving into offering value-based care options, he noted Benchmark first attempted the model with “lower risk” communities, and is using those as a jumping off point before rolling it out further.
Still, for now, the company is “dipping its toe in” value-based care and being cautious about the road ahead.
“I’m watching what others’ experiences are and listening to people like Joel,” Grape said. “There is an economic ROI and it’s a risk-reward calculation.”
Taking first steps toward value-based care
When shifting to a more value-based healthcare focus, taking the first step can be the hardest. According to Grape, the idea for Benchmark was to start small and “learn their way” before a full rollout.
Brookdale aims to roll out HealthPlus in 150 communities by the year’s end. According to Elliott, companies looking to take the first step into value-based care need to include “focus” and “change management.” When talking with competitors about how to get started, she noted the first question she tends to ask tends to be about how the clinical care delivery model will change to accommodate it.
“I truly think you’ve got to lean in. You’ve got to create a clinical model. You’ve got to be able to get your outcomes,” she said. “It could be a waste of time if you don’t just really lean in and say we’re going to do this.”
Getting residents to enroll in value-based care programs is a big part of the equation. To achieve that, Brookdale focused its efforts on being “payer-agnostic” and pursuing opportunities to “create incentives off the value.” At the moment, a major challenge Elliott sees is getting more residents on Medicare Advantage, which the company is working on doing in order to make an “easier sell.”
Additionally, Theisen said that “the best way to get enrollment in anything is to get some of those champion residents.”
“Those champions in those communities have been really great for us,” he said. “We work with families as well, so it’s a lot about the storytelling to get the value proposition right, and then get the people who are the influencers.”
For all three companies, data is an important cornerstone of value-based care. For Lifespark, that has meant more so than just enhancing electronic medical records. By partnering with Blue Cross and UCare, the company was able to access five-year lookbacks on residents who used the services. Additionally, Lifespark worked with medical records from Epic, a company that helps “chronicle the story of a patient’s healthcare over time,” according to its website.
“There is a lot of power in that,” he said. “For us, it was inherent that we created an electronic life record around each member. Not another EMR, but an ELR that pulls those different insights to our users, so our nurses, doctors and caregivers could do something with it.”
Despite all of the effort that has gone into building out Lifespark’s systems to provide better care for residents, it’s not without drawbacks. Around half the time, “it’s crazy,” Theisen said.
As a whole for others in the industry, however, he recommends those wanting to start in value-based care to start small and work on building out additional systems.
“Just think of it like one plus one – plus one, plus one, plus one – and just keep wrapping that around,” he said. “The more information and insight you have, the more confident you can be to take some level of risk or some level of performance payment.”