Part 1 Here Part 2 Here If you take a look at the comments under part two, you will see I took some shots, for my article listing the losers. It is clear this is an issue that generates a lot of heat and with good reason, it will in one way or another, impact each of us. Even when I get taken to task (and sometimes I even deserve it) I really appreciate the dialog and will continue to allow the comments to stand.
Healthcare Delivery System Under ObamaCare
In my mind, the biggest question we need to ask is, What will the healthcare payment and delivery system look like 10 years from now? It seems that we are headed toward one of two scenarios:
1. Health Plans for Everyone
I think this is the more likely of the two scenarios. Direct payment by the government to providers will cease to be. Rather the government will pay those dollars to health plans, who will then manage the care of the people they are responsible for. This will mean an end to Medicare as we know it today. Essentially what will happen is everyone will be forced into an HMO type plan, some will function like true HMO’s and others will look more like preferred provider networks. I also see the Medicaid system moving in the same direction.
2. Medicare For All
There are a significant number people who would like to see the Medicare system expanded to include everyone and this would be true universal care. There are many barriers to this, not the least of which, is a formidable insurance political lobby. Probably not in my lifetime, but it would likely lead to an even more uneven distribution of services, and delays in getting appointments, treatments and procedures as measures to control costs.
Senior Housing
I see opportunities in these areas:
1. Skilled Nursing (SNF) Costs less than an Acute Hospital
Under the old system, hospitals caring for patients with Medicare, received a specified lump sum payment for a particularly diagnosis. The faster the hospital could get that patient discharged the more money they would make. As a result, patients got discharged to skilled nursing or or other levels of care earlier than what was optimal. This is being changed so that if a patient is readmitted within 30 days of discharge, the hospital will be penalized financially. Hospitals will be looking to create tight relations with SNF’s that will take extraordinary steps to make sure those readmissions won’t happen.
2. Assisted Living Costs less and Skilled and Acute Care
Assisted living stands to be the biggest winner of all senior housing options. Assisted living communities need to build tight relationships with hospitals. In order to develop those relationships they will need to demonstrate they can accept these post acute patients and provide for their medical needs at a lower cost and in a much better environment. And most importantly, keep those residents from going back to acute care in that 30 period. Along this same line, those assisted living communities that develop relationships with senior HMO’s will tap into another source of post acute care opportunities. The big win here is that in effect, these HMO’s are allowed to spend money that formerly could only be used for skilled nursing. The HMO’s have a single goal, getting their members better at the lowest cost. If your assisted living community can do that, you will win. While many of these residents will be relatively short stay, some will convert to longer term residents.
3. Independent Living costs less than Acute, Skilled and Assisted Living
The reason independent living needs to pay attention is that there will be residents who can successfully return to an independent living setting if appropriate resources are made available. This is why the management needs to have a good rolodex of these resources and be willing to work with the residents and the resident families to access these services. What other opportunities do you see? What risks do you see?
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Finally: If you know anyone who is looking at emergency call systems I would appreciate the opportunity to talk with them about Vigil Health Solutions.
From LinkedIn Groups
Group: SENIOR LIVING CONNECTION
Discussion: How ObmaCare has the potential to be a win for senior housing! What do you think?
Terrific series of articles, Steve, including the comments. Personally, I think you are on target with most of your observations. In my opinion, there is no way Obamacare reduces costs, even with the addition of uninsured who will now be forced to buy insurance or pay the penalty (or “tax”, as Justice Roberts would define it).
So, while Obamacare moves us closer to univesal health care, one of three things will have to happen:1) services will become more scarce as demand increases, resulting in longer waits, less access to specific specialties, etc.; or 2) the government will require more $$$ from citizens, whether you want to call it taxes or something else to pay for the increased costs as the Congressional Budget Office has projected; or 3) the supply of services must increase to address the increased demand – which would likely consist of lesser quality practicioners – that ultimately leads to a lesser quality of care.
Posted by Paul Flowers
From LinkedIn Groups
Group: SENIOR LIVING CONNECTION
Discussion: How ObmaCare has the potential to be a win for senior housing! What do you think?
Unfortunately, as much as we’d like to see quality comprehensive health care for everybody at a lower cost, Economics 101 teaches it’s just not going to happen.
Posted by Paul Flowers
I agree completely with the observation on Economics 101. We have advanced to a level in healthcare where the life of an individual can be extended far beyond where it could have some years ago. With this degree of technology, the result of advancement means much higher cost for services.
I am in no way saying that we can play God and determine what measures should be taken to extend a life but we have to also be realistic and understand the economics of the price of the technology we have today. From the beginning of life, a premature baby born at a birth weigh as low as 1lb,with a multitude of medical challenges, can survive and grow to old age but the cost far exceeds what it typically would cost for a baby born at a normal birth weight. This same baby who reaches his/her senior years again can, with technology, have their life expectancy extended indefinitely,which again is at a cost that far exceeds what was once the cost of typical senior care.
Now do the math and you understand where I am going. I don’t really think the issue of the cost of healthcare is one that will or can be solved because of our advances in medical technology, which has nothing to do with who is or is not in the oval office. People from other countries come here to receive the quality of care that is only available in the United States. Truth in fact if a person without insurance, who has a catastrophic medical condition or any medical need, lands in an emergency room, that person will receive treatment regardless.
Fortunately we have the greatest medical technology in the world but unfortunately we have created a monster that will only continue to grow larger as time goes by.
From LinkedIn Groups
Group: Senior Living, the way it ought to be…, Consulting and more
Discussion: How ObmaCare has the potential to be a win for senior housing! What do you think?
A win? Please tell me of any Federal Gov’t. program that has been fiscally successful?
We are broke and kicking the proverbial can down the road to our children and grandchildren. Thanks.
Posted by Frank Sindelar
Many uninsured americans are using the emergency room as their only care option and then not paying for it. It drives up medical care costs for all of us. Getting those folks onto a care plan and out of the emergency room will lower costs and free up critical care resources for everyone.
Great set of articles Steve, I believe you are correct in saying that assisted living providers need to develop good relationships with hospitals, and I also believe the same will apply to independent living as well. What is interesting is that while the assisted living industry has always marketed themselves as a “social model”, I really think both assisted and independent living need to develop relationships with not only hospitals, but also with primary care physicians to show the hospitals they have ‘clinical oversight’ to assist in keeping the residents from readmission to the hospital (this is the driving force).
While there are many providers already working with local physicians, it is important for AL and IL providers to recognize that if you want hospitals to discharge to your community, then you will need to actively have partnerships in place that can provide this ‘clinical oversight’ as we all have to participate in the continuum of care model.
I also found it interesting in the July 3, 2012 Dallas Morning News, there was an article on a major hospital group partnering with a large home health agency to provide ‘clinical oversight’ to their patients post-discharge. Again, another example of the measures hospitals are taking to keep from being penalized for readmissions.