Follow the Money to Better Care

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We spend or so plus

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of our gross domestic product on healthcare.

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Most of the developed countries spend ten or eleven

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or 12% of their GDP on healthcare. And if

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you look at the outcomes that are achieved in terms of life expectancy and

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various disease processes, we're not at the top

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of the chart.

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Welcome to the Nursing Home Podcast, your go

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to source for professional insights in the long term care industry.

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You're from leaders and experts as they share current and practical

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insights to help make the most of your day. I'm the longterm care financial specialist.

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What that means is I help people plan for the inevitable.

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Nobody wants to think about getting old, but it's possible that someday we might

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need a little bit of care. Here's your host. Nursing home Administrator Turnpodcaster

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Schmuel, Septimach. Welcome to

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this episode of the nursing home Podcast. The podcast

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which is created as a resource for the nursing home professionals,

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for those in the industry to know what is really going on,

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and to get the tools and resources and information necessary

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to be even more successful providing care for our

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residents. Today's guest I am

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very happy to introduce is Mark Parkinson,

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which many of you already know. We know that Mark is the

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president and CEO of the American Healthcare Association,

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former governor of Kansas. And before I put

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too many words in Mark's mouth mark, welcome to the nursing

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home podcast. Thank you. Great to be here today.

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So Mark, for those who have not

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come across and they are not familiar with you, do you mind just briefly

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sharing how you got into this space and then

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we can move on to some of the other more timely topics

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that we'd like to discuss today? Sure. Well,

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I bet I'm like a lot of the listeners, which is that

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it didn't happen intentionally, it happened just sort

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of accidentally. And for me,

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I was a state senator, I was being lobbied to

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tour an assisted living facility. This was back in

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the early 1990s when at least in Kansas, assisted living was

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brand new. I was completely blown away by how cool

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it was to take care of older people in a residential setting.

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And that day, literally, my wife and I

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decided that we wanted to build an assisted living facility. We thought we would just

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have one, but one thing one day led to another and before you knew

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it, we had built and we're operating ten different facilities,

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including assisted living facilities, dementia facilities and nursing homes.

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And we loved it. It's incredibly hard, as your listeners know,

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it's incredibly rewarding and often all at the same

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time. But it's been a great life.

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Awesome. So you're uniquely

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qualified in the respect that you're not coming from just

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a policy standpoint and just as a support organization,

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but you're, so to speak, one of us who understand the day

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to day challenges. Well now you're in your current role,

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you're able to expand and broaden the reach

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of what you're doing. So right now we know that

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there are a lot of changes in general terms in the

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long term care industry.

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What do you see just on a broad level, let's say without

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the PDP and we'll get to that in a moment. But on a broad

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level, where do you see the industry going in the next three to

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five years? Yeah. So if you look at

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it at the highest possible level and you step back and you

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look at long term care or really healthcare

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in general, we have come at it. We come from a fee for

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service model for a very long time.

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And we are evolving

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into a population health management model

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where we won't get paid based upon a day by day fee for

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service type rate. Instead, we'll be part of a broader system

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that is highly incentivised to keep costs down and

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quality outcomes. And we're really

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like in just like the third inning of that transition. So that's at

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a super high level, at a more intermediate level,

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the payments that we have within that transition themselves are

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changing as you refer to on PDPM. But the

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change from fee for service to kind

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of a population health management model is a very big deal and that's

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the major trend that's occurring in all of healthcare.

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Now. What is the push that is making this change happen,

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going from fee for service to population health? And is that good

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or otherwise for the residents who are receiving

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the care at new facilities? Sure. Well, the push

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for it is just this reality. We spend or so

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plus of our gross domestic product on healthcare.

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Most of the developed countries spend ten or eleven or 12%

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of their GDP on healthcare. And if you look at the outcomes that are

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achieved in terms of life expectancy and various disease processes,

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we're not at the top of the chart. And so all of the

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think tanks and academics and people that set policy have said

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we need to head more towards a population health management

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type system like you see in the rest of the world, as opposed to the

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fee for service that we have here. The impact on

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nursing homes specifically, just to bring it to a real thing,

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depends on how smart the operators are. If the operators

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are ahead of this and become part of the solution and

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part of the entity that owns the population health management, they're going to do great.

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If they just sit back and sort of let this happen, they then

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become a commodity in a much different world and

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they're not going to do very well.

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Basically, the operators who are going to embrace the change and

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see it as an opportunity to be reimbursed in

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a way that is really better for everybody as you touched

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on, those ones are going to come out ahead,

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but those are going to be stuck in their ways for them is going to

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be more challenging. Now, what is the connection between the

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different payment model from fee for service to population health

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with the healthcare results that you mentioned earlier that we see

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in other countries who spend less of their GDP on health care?

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Why is that assumption that changing our payment model can

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be a first step in rectifying the situation?

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Well, a really good example are institutional special

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needs plans, which 22 nursing

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home providers have now become. When you become an institutional special

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needs plan, you become a Medicare

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managed care insurance company for the people

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that live in your building and you receive a set amount of

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money from CMS to take care of their Medicare needs.

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If you end up spending less than the amount that you get, you make

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money. If you end up spending more than the amount that you get, you lose

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money. So the incentive is to keep your

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residents incredibly healthy, so you don't have to pay

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for any medical bills because they're doing fine and

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they don't have any medical bills. And so that's where you see the marriage

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of quality and saving

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money. It saves money because there's less spent. There's less spent because

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there's an incentive to quality and the person that owns the plan makes

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a lot of money. If they can keep everybody healthy, if you give people incentives

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to keep residents healthy, if you give them financial incentives,

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they will do it well. So,

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I mean, this is the general shift that we're

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seeing now is that for the first time, at least in recent

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history, we're seeing that the payment models and the clinical outcomes

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are they're in sync. If you want to be successful

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financially, you also need to be successful clinically. And we don't

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need to have absolutely banners and directors of nursing.

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You don't need administrative pushing for extra rehab time and then director of

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nursing, no, that's not what the patient needs because now we can

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focus together on the same results,

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which like I mentioned, everybody wins that way. Now, if we can jump,

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if we can jump specifically to PDPM, which we know is coming October,

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how do you think that's going to affect the feasibility and the

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profitability of nursing homeowners who fit into the category

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you mentioned or operators who are willing and to do

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whatever it takes to embrace it properly?

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How is that going to affect a the care that they're able to provide

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and be the success and profitability of their companies?

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I think they're going to do really well because the companies

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that have already embraced value based purchasing

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and focusing on quality, not just because it's the

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right thing to do, but as a financial strategy,

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they are already doing many of the things that you're required to do

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in PDPM for it to be successful. They are already identifying

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all of the various issues that go into a resident that

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may be negatively impacting them from a health perspective, which is what

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PDPM requires. It requires a robust

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evaluation of the resident to make sure that we code all of the challenges

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that they face. And they're already right now adopting

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care strategies that aren't just therapy. Therapy is great,

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but there are things other than therapy. And so they're

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already doing that with their population health management.

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And so I think that people that have embraced the concept of let's look at

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all of the things that are impacting the resident, let's look at all of the

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things that could improve the health of the resident and implement

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those. I think they're going to do really well with PDPM now, just to kind

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of get a little more granular, we have a number of members

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that have really tried to crosswalk the

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PDPM payment system to the current system or crosswalk

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it to current residents. Even though the system doesn't go into effect for

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a while, they're already sort of pretending

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like it's into effect. So they're coding them and coming up with care plans for

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them. And the early reports that we get are that the members think

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it's going to go pretty well. We won't know for sure until October

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1 when it goes live, but we're feeling pretty good about

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it right now. That's interesting.

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So they're pretending as a PDPM was

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to make me sure I understood what you said correctly, that it's active now,

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and they're kind of like dual coding. They're coding what they needed to do for

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the current system, but they're also coding what would be for PDPM so they

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can see what it looks like. Is that what they're doing?

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Absolutely. And I would really encourage all of your listeners to

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be doing that. We're so close to October 1.

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You don't want to be coding your first people under PDPM when it goes

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live on October 1, whether it's just a small subset

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of your rehab residence or maybe for an entire building.

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It's really a good idea to do a bunch of practice beforehand

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by dual coding. I think that's a good way to word it, as you did,

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you know, to prepare plans for them under both systems, the current system,

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and then the system that will go into effect on October 1. I think that's

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really the best way to work the kinks out before

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the system starts on October 1. Who is

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the biggest beneficiary of which part

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of the health system, or even within the nursing home facility?

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Who's going to gain the most by the change of PDPM?

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The people that are going to gain the most are people that are currently taking

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really sick people that don't need a lot of therapy,

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because under the current system, you just don't get reimbursed right

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for those people because most of the reimbursement is related to therapy.

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Under PDPM, all of the payment areas

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where for other sorts of ancillary services are

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going to improve so there's a much bigger

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incentive under PDPM to take

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people that have all kinds of issues whether

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therapy can solve them or not. I think another

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group of people that will be successful are people that can

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successfully adapt their therapy practices to the

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new rule. The new rule says that we

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can do group and concurrent therapy. Up to 25% of

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the minutes can be group and concurrent. And we

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don't want to do group and concurrent on everybody. We just want to do it

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on the people that it would be helpful for. But if you have the

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infrastructure to do group and concurrent, you plan it

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out, you know how to do it. People are going to save a lot

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of money just on therapy minutes. So let's break

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it down. So can you just define for us what the listeners are not familiar

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with, what that means group and concurrent therapy sessions? Yes. Under the current system

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when you provide therapy, you only get paid

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for every therapy minute if you do one on

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one therapy. So if you have somebody in front

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of you for 50 minutes, one person, you get 50 minutes

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of therapy credit.

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If you do group a group of, say, four people

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in front of you, under the current system, you only get credit

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for one fourth of each of their minutes. So you get credit for

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50 minutes total for all four of them. You don't get

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credit for 200 minutes. Under PDPM,

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up to 25% of the minutes can be in group and concurrent and

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you get credit for all the minutes. So in that scenario where

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you have four people in front of you for 50 minutes, you would be able

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to report that you had delivered 200 minutes of therapy.

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Now, group and concurrent isn't for everyone. It's not for every

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situation. There are some that do need to be handled one on one.

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But there are multiple situations that I saw in our buildings and your

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listeners have probably seen where group and concurrent make total

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sense and in fact, the residents actually sort of

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like being with somebody else and there's a socializing

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effect and you see people sort of almost having fun with it.

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So again, it's not a panacea, but it is 25%

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of the minutes and that alone is going to

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significantly lower cost. Right. And I think the

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point here is for both of the points that you brought up for

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the sick resident that gets admitted almost on

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an acute level to the Smith and also grouping

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together minutes, these are both cases. Where if we take all financial

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incentives out completely and this was our mom or dad

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who was there, and we had the resources to provide

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for them, this is how we would provide care for them. We wouldn't take somebody

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who is suffering from depression is really their primary

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challenge, even if they might not code it as their primary diagnosis.

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But that's what's hurting them the most and put them through vigorous,

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aggressive, physical occupational therapy, necessarily,

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maybe to some extent, but we would be able to focus on the other things

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or some other physical, clinical challenges that

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they may be enduring. And at the same time,

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like you said, we may purposely have therapists

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working with our residents one on one. And yes, incurring the cost of

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paying those therapists, and the residents may prefer to do a

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portion of it together. And now through both of these changes, we're able to

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provide the care that is really in the residents'best interest.

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And financially, it's finally lining up. So I really appreciate

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you pointing that out in the effort of time. I want

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to move on to another point. You have a very broad perspective

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on the industry, and it's exciting that you

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have the real experience. You're not talking from just a

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political or from a policymaker standpoint. What do you think is the

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biggest myth that the outsider, perhaps someone who's uninformed

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or has not worked in this industry, believes about what a

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nursing home is? And why is that not true?

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Well, I think there are several. The one that immediately

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jumps to mind is I don't think that the policymakers understand

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how old and how frail our residents are.

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And maybe we're at fault for that because of some of the ads that you

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see people running that show these active seniors and coming off the golf

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course and all of that. So you read these things from the

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politicians that say, oh, we ought to just move all these people out of nursing

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homes and put them in home health. It's just

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ridiculous. As your listeners know, that are primarily in

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skilled nursing. Our residents are incredibly frail.

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The average age is 83, 84 in that range, and they have enormous

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needs. And so that means that all of these proposals

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to be institutionalized, as they say,

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these residents are just silly. The other thing that it says

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is that it's incredibly hard to take care of these people.

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These are not just like active seniors that are carrying a

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muscle while they're playing golf. These are people that are

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so old and so frail that they just have an enormous number

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of challenges. So I'm not sure that the public really understands

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how incredibly hard it is to take care

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of our residents. And then the third thing that comes to my mind is,

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and this will sound like an advertisement for our sector, but your listeners all know

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it's true just the kindness and the compassion

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of most of the people in the sector. Most of the people that

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you're working with when you're actually on the floor in a building working

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a shift are people that really are passionate

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about the elderly and do care about it. They're not the sort of monsters that

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get demonized when something goes wrong and we end up

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on the front page of a newspaper.

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Some of the most decent, kindest people that I've ever met are

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people that are out there working eleven to seven shifts,

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just trying to keep their lives going, but also keeping the lives

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of the folks in our buildings going. Right. I really appreciate you sharing that last

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point, all of the points, but specifically that one, because our

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industry, from our peers and other industries is so

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misunderstood and for the very reason of what you said.

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The extreme minority of examples that make

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it to the front pages is what people assume,

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what life is really like and what people really are in these industries.

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And the biggest proof of this is, and I've had conversations with some of my

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employees about this, is that many of

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these roles, for example, the nurses working eleven to seven,

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they could get paid much, much more for working those hours

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in other industries where if you don't do

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your job correctly, nobody dies, nobody gets hurt. You don't have a regulatory

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compliance committee that you know internally within the facility whose

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jumping down your back if something happens. And you

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don't have the external regulatory enforcement

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environment. It's really, really challenging. And you're dealing with someone who may never

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even have known who you are, or cannot express

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their appreciation, or may not actually appreciate it.

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And yet, like you said, they go in day in and day out. And that

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is the majority, that is the rule, that's not the exception. I really appreciate you

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saying that. If you don't mind me telling one quick story,

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I want to tell one quick story about that. I was in Des Moines

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about maybe four years ago, speaking to the national

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certified Nurse Aid Conference, Naka. I was

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at their annual meeting, and there were about 500 nurse AIDS there,

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and it had been after a really tough winter, a lot of

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snow all over the Midwest that year. So I

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said to the audience, please stand up if you had

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a shift this year during the winter and your car broke down in the snow

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and you were stuck on the side of the road in the snow,

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you know that cars, unfortunately a lot of our CNAs have, are terrible cars.

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And so probably 40 or 50 people stood up, and I

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said, remain standing up if you then walk through the snow

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more than a mile to get to work. And like 20 were

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still standing, and I said continue, stand up if you walk

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more than 5 miles. And there were, like, ten. And I said, continue standing up.

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If you walked more than 10 miles to work

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after your car went out into the snow and there were

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five people that had done that, just imagine the commitment

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that people have. And those are the kind of people that work in

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our building, and they never end up on a new store that are just

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amazing human beings. Wow, thank you for sharing that. People don't

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realize that level of commitment. It's almost like with a religious fervor,

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that they care so deeply for these people,

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like we said, that they don't know and cannot express appreciate walking 10

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miles. How many people would do that in other industries? Now, just as

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we wrap up here, what do you see as maybe the biggest challenge

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or the biggest opportunity besides

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for, I guess, PDPM, what we discussed? Let's just focus maybe on the challenge because

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we spoke up about opportunities within the coming years,

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specifically for the nursing home operators.

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In the short run, there's an enormous labor shortage.

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And so as you're operating, what we hear on the operational side

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right now is that the biggest problem is finding people.

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Oddly enough, in the longer run, the problem is we're going

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to have too many people that need our services. We're just now hitting

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the part of the aging boom where the baby boomers

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are going to start needing us. We're still a little ways away from that,

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but it's going to be very exciting and challenging at the same

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time because we're going to have a tremendous need for what we do at

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a time when payment models are changing and it's hard to find people to take

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care of the residents that we have. So, a lot of challenges, but also a

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lot of exciting things. Okay, I really do

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appreciate that. Now, if we can just go down a drop further,

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what do you attribute the labor shortage?

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What is the reason for that? I just think it's as simple

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as the fact that the national unemployment rate is so incredibly low.

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We're basically at three and a half percent unemployment, and it's as low as it's

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almost ever been. And when that happens, it's really hard to find

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workers. I don't know if this is a short term thing

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or if we're kind of in a permanent labor shortage situation,

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but it is really, really tough right now. Right? I mean,

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and specifically, referring back to the

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incident you just mentioned in that room where you see the type of people

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that is necessary, not everybody's cut out for this. It's not everybody's

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natural skill set. So like you said, when unemployment is so low

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and they can easily find work elsewhere, that's going to be a challenge.

23:34.872 --> 23:38.302
Before we wrap up, Mark, are there any final thoughts that

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you would like to share with the listeners? Any words of encouragement

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for those who are still in the industry before we let you

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go back to your busy schedule? Well, first of all,

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I think it's great that you have this podcast. It's fantastic to have

23:51.655 --> 23:55.147
discussions. And for people that are deeply interested, if they're still listening to me after

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25 minutes, they must be pretty damn interested. And so that's great.

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And then secondly, I just want to say don't get discouraged.

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Even though this work is really hard,

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I just can't think of anything that's more rewarding and

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more important than taking care of people that other people who have

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decided that they can't take care of anymore. And it's

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a challenge, but it's also an honor. And I can't tell you

24:20.245 --> 24:23.907
how much I respect the people that have committed their lives to it, and I'm

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just so happy to be a part of it. Okay, that's definitely

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so true. I'll add, if you don't mind, one point to that is that

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sometimes when we're in the industry, we almost see it as us and of them

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as the professionals providing the care. And then the residents who need the care.

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We don't realize, and I'm sure you've come across this new experience,

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that the residents are us a few years down the road.

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We may not end up in nursing home, may not end up in that nursing

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home, but I've had residents who were formerly

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staff at the facility, so that makes it

24:57.595 --> 25:01.477
a little bit more understandable. You can walk 10 miles in

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the snow when you understand that these are people, that we're hoping that

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people do this for us or for our loved ones if

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and when the time has come. Absolutely great way

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to put it on. Yeah. Thank you so much for coming on the podcast,

25:15.492 --> 25:19.587
Mark. I really appreciate this. You share really such tremendous

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insights and value to our listeners and so they'll

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be referring back to this many times. Thank you so much.

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You bet.

25:32.737 --> 25:36.552
I hope you enjoyed this episode of the Nursing Home podcast.

25:36.657 --> 25:39.997
Be sure to share this episode with all of your friends in the nursing home

25:40.030 --> 25:45.367
industry and just tell them to head on over to thenaursinghomepodcast.com

25:45.415 --> 25:50.077
in the meantime, head on over to itunes. Leave me an honest review,

25:50.245 --> 25:53.472
take a screenshot of it and send it on over to me on LinkedIn.

25:53.592 --> 25:57.937
I'll be sure that we send something out special just for you.

25:58.075 --> 25:59.775
Have an awesome day.