Let's Collaborate.

Payment reform is the new driver of innovation in long-term and post-acute care, according to Laurence Gumina, CEO of Columbus-Ohio-based Ohio Living (formerly Ohio Presbyterian Retirement Services). He conveyed his message via a session at the LeadingAge annual meeting last month, along with his colleague, Wendy Price Kiser, executive director of Ohio Living Home Health & Hospice of Greater Toledo.

Gumina recently led the organization through a new strategy development and name change, and the results are indeed innovative. With 12 life plan communities, a home health and hospice care agency, and a foundation under its umbrella, Gumina says he wanted to step outside the boundaries of a typical model and create an innovative value proposition that would be effective in moving the organization into the new world of value-based purchasing.

What’s more, Gumina saw the writing on the wall; he knew he had to be proactive about adapting to the new payment reforms before it was too late. Another significant factor in Ohio Living’s drive to be more innovative is the impending SNF readmission measure that takes effect fiscal year 2019.

The most interesting of Ohio Living’s new models, in my opinion, is its successful home health and hospice services. Branded as the Home to Stay Program, it was created to improve quality and reduce hospital readmissions for patients.

In outlining Home to Stay’s highly successful relationships with two ACOs, Price Kiser noted that although it took their first partner six months to respond to her call, the care coordination model is now a valued component in the ACO’s continuum. “We told them that we wanted to work with them and that we would see all of the discharges coming out of the hospital,” said Price Kiser. Yes, she said ALL of their discharges. It was a risky offer to provide free transitional care to some patients but they bet on the fact that it would enhance their value proposition for the ACO--and it worked.

And like many creative and innovative models that are rooted in everyday common sense, so too is Ohio Living’s. As Price Kiser said: “It isn’t rocket science.” With some “basic clinical judgment” baked into the program, she pointed to a simple yet critical factor in their model: caregivers meet with the patients the very next day after they are discharged. In addition, they focus on two things: medication safety and medication reconciliation.

Here’s how it works:

• Day 1-Coach Visit: The patient signs a consent form, the caregiver conducts a medication reconciliation, takes vitals, creates a personal emergency plan, does a fall risk assessment, confirms a follow-up appointment with (and transportation to) a primary care provider.
• Day 8 – Coach Visit: Review any red flags, determine signs and symptoms and coach interventions, follow up on any issues identified during the first visit, review medication plan, and determine if any PCP appointments and medication changes are necessary.
• Day 17 – Coaching Call: Confirm a PCP visit was made and discuss the results of the visit.
• Day 22 – Coaching Call: Determine signs and/or symptoms and coach interventions, if necessary.
• Day 30 – Coaching Call: Determine signs and/or symptoms and coach interventions and discharge from the program.

As of October, the cumulative hospital readmission rate was 3.6 percent, Price Kiser reported.

Also successful is Home to Stay’s involvement in a Comprehensive Joint Replacement model. Similar to its ACO model, tracking metrics and a focus on patient engagement and education are key to preventing avoidable readmissions under the CJR, Price Kiser said.

The two presenters offered some additional advice for providers seeking their own secret sauce for innovation: Create a value differentiator—something that makes your organization memorable; seek new and unique partnerships; and, last but not least, track metrics, analyze them, and share that data with potential partners.

If you want to create innovative new services or business lines, facilitated by experts in the senior living field, with candid feedback, contact Quantum Age today.

Fall show season in the long-term and post-acute care industry has come to a close. As someone who has diligently attended many aging services-related conferences over the last 20 or so years, I can report that one stood out among the usual suspects this year—the Aging 2.0 OPTIMIZE conference.

In fact, I had anticipated the conference for some time, having heard about it from colleagues and given its promise to marry innovation and aging. For the most part, it did not disappoint: there were many new and enthusiastic entrepreneurs eager to show off their innovations and win over investors and customers. With about 900 attendees, the feeling of the conference was energetic, perhaps because many of those in attendance were relative newcomers to our relatively small aging services ecosystem.

Unfortunately, too many of the exhibitors—all of whom I’m sure have good intentions—had made what I believe were incorrect assumptions about what or how their inventions would aid older adults. In some instances the name of a gadget or software platform was condescending, ageist even. In one example, a service for elders and their families seemed to make an assumption that the users would have positive reactions to a robotic, Siri-like voice making phone calls to them. In another, a “simplified” tablet would make technology accessible easy for old people (those 50+). Being a member of that demographic, I wasn’t clear what problem this solved for me (I love my tablet).

For the uninitiated, Aging 2.0 is a San Francisco-based organization that “connects, educates and supports innovators through community, events, startup programs, and content.” You may be familiar with the local Aging 2.0 chapters that host pitch events for senior facing startup companies in search of investors.

On display in the main meeting room of OPTIMIZE were some 60 exhibitors. The majority of them were in a startup phase, hoping to attract funding for their innovations.

Some highlights of the conference for me:

1. UZURV: A transportation reservation services app “created to enhance the on-demand riding and driving experience.” The app works in conjunction with existing on-demand transportation services like Uber and Lyft, allowing riders to make advanced reservations with the driver of their choice. The company was at Aging 2.0 seeking capital to expand its services into the senior living niche. The appeal to riders is that it’s customizable—the user can filter drivers in a variety of ways: by vehicle, amenities and special services; by driver profiles; and by sending requests to favorite drivers they know and trust. In doing so, the company hopes to appeal to elders and their caregivers because it “improves the quality, safety, and accessibility of on-demand transportation.” 

   My take on it: Since UZURV is already in 60 or so cities it’s a no-brainer to make the expansion into senior living, although rollout strategy will be extremely important. However, the company will have to work with Lyft and Uber, which could present some challenges.

2. FibriCheck: Created by a Belgium-based company, FibriCheck is a screening and monitoring software that detects arrhythmias in patients. Whenever a patient feels symptoms, FibriCheck can immediately record the heart rhythm using their phone camera function, which is the coolest thing about the technology—it requires only an index finger on the smartphone camera.

   My take on it: It’s incredibly user-friendly. What’s not to like about its simplicity? It has already been deployed in Belgium but the technology could face some challenges getting into the U.S. market. Of note: FibriCheck was also the conference’s Audience Choice winner.        

3. Cariloop: A service that provides comprehensive “coaching” via phone or video chat for loved ones of older adults whose lives been turned upside down by an event that requires myriad medical, legal, and financial assistance. The company also organizes medical records and other important information into a secure portal that allows for “easy storage of important files and ongoing collaboration” with a coach. 

   My take on it: Since Cariloop contracts with companies to benefit their employees, their services are sort of like having an employee assistance plan and a geriatric care manager all rolled into one. I like this no-wrong-door approach.

There were a number of other innovative and clever creations that I’m sure will be successful in the longevity economy. But for those that don’t have a handle on what elders really need and want, I hope they will consider spending more time with elders and designing with them—not just for them. 

Our last post on content marketing provided tips for making content—but that’s only the first step. Next, you need to promote your content and then measure your results, according to Andy Crestodina, strategic director of Orbit Media Studios.

Just like the real estate adage “location, location, location,” good content marketing is just as much about promoting, promoting, promoting your content as it is about producing it. Over two presentations at the 2016 Senior Care Marketing Sales (SMASH) Summit, Crestodina shared lots of tips for max reader engagement.

To compliment the 9 tips provided in our first post, here are 11 ways to implement the next steps of content marketing:

Promote Content

Tip 10: Capture interest. Your content can be the best in the world—but it’s worthless unless you’re grabbing people’s attention and getting them to read it. Headlines are crucial, and there are several rules for creating good ones:

• Make your headline explicit and concise.
• Don’t give away the whole article in the headline. At the same time, don’t hide what the article is about.
• Trigger curiosity. Appeal to emotions.
• Use numbers or percentages when possible.

Tip 11: Know how to generate traffic. Send out an email with your article and promote it on social media. Putting your content directly in someone’s inbox is an easy way to reach them, while posting content on Twitter, Facebook, or LinkedIn makes it easy for people to share.

Tip 12: Add tools to your arsenal. Use tools like Buffer to share content efficiently. Buffer allows you to queue up content you want to share on social media and then spaces out when that content is released throughout the day.

Tip 13: Be a big fish in a small pond. Don’t view the fractionalized senior living market as a threat. View it as a marketing opportunity to specialize in a niche.

Tip 14: Don’t date yourself. When publishing articles that aren’t news-oriented, don’t include the date. With information that’s useful no matter when it’s posted, including the date may discourage someone from reading it as time passes.

Tip 15: Connect with everyone on LinkedIn. It’s a content sharing platform—treat it as such. Content marketers benefit from connecting with each other.

Tip 16: Be a fount of information. Content marketing is a test of generosity. It costs nothing to give away your best advice and knowledge, and that’s how you’ll win the relationships that give you the links, the authority, the rank—all leading to getting qualified visitors on your website.

Measure Your Results

Tip 17: Use data to your advantage. How much authority does your page have? Find out with tools like Google Analytics. Make use of available data, and adjust your content accordingly.

Tip 18: Focus on what matters. There’s a very long road between getting a “like” and making money. A very low number of social media interactions convert into leads. Your website is much more likely to get a visit from a Google search, so put the bulk of your energy into where you get the best results.

Tip 19: Share content people want to see. Look at what’s getting shared and clicked the most. Use Google Analytics to find the articles that will get people to subscribe to your newsletter. Put these items on your sharing list.

Tip 20: Know when to share. Track your web traffic and email click-through performance to find out when people click on your content. Generally, 11:00 a.m. Central is a good time to share because both coasts are up and running.

Remember, when it comes to content, it’s all about relevance and authority. By making content, promoting that content, and measuring the results, you will master the content marketing game and get found when prospects are looking for answers.

Content marketing. It’s the magic sauce to make your website show up when people in your area search for the service you provide. Showing up depends on your Google rank, but many people don’t realize that Google doesn’t rank websites—it ranks webpages, according to Andy Crestodina, strategic director of Orbit Media Studios. That means your own website’s pages are in competition with each other, and with tons of other pages.

Crestodina’s two presentations at the 2016 Senior Care Marketing Sales (SMASH) Summit, covered the ABCs of content marketing. The key is to make your webpages, and especially the pages where you’re trying to compel visitor action, as competitive as possible, he advised session attendees

There are two things that matter most when it comes to improving your website’s rankings: Relevance and authority. They’re achieved when other people share your content and link to your pages. Research gets lots of links; opinions get lots of shares. It all comes down to producing content.

The three steps to content marketing are:

1. Make content (i.e., blogs, white papers, studies, etc.)
2. Promote your content via search engines, social media, email, etc.
3. Measure your results.

Here are tips for mastering the first step:

Make Content

Tip 1: Start the conversation. Content marketing’s primary role is to answer people’s questions. People do a lot of research before making big decisions. Many senior living shoppers get answers online before reaching out to your sales team. That’s why your webpages should seem like a conversation with a salesperson. Find people’s questions, put them in an article, and answer them.

Tip 2: Say what no one else is saying. Make a list of your strongest opinions, then write about them. If you’re stating a strong opinion—especially one that no else is sharing—it catches people’s attention and is more likely to get shared. Get people talking about you. Increased interactions improve visibility and promote higher levels of interaction.

Tip 3: Produce research. The three main ways to produce research are through observation, aggregation, and surveys. Look at available data sets, then write about your observations. Aggregate research that others have done. Create your own data by surveying others and writing about your findings.

Tip 4: Make your content reader-friendly. Most people visiting your site are scanning your page, so make your content scannable. Use lots of headers, subheaders, and bullet points. Avoid large blocks of text and make use of white space. Include lots of images.

Tip 5: Create the long click. Keep visitors on your page as long as possible. Sometimes visitors find the answer to their question on the first page they look at—and that’s OK.  But if you can interest them in something else, they’ll stay on your site longer and give you more conversion opportunities.

Tip 6: Start a “mastermind group.” Talk to, say, five other content producers—noncompetitive people who also blog or write—each month. Ask them, ‘What are you doing that we can promote? What are you writing that we can collaborate on? Do I know anyone that you want to meet?’ The benefits can be enormous, and it costs nothing.

Tip 7: Collaborate with guest writers. When writing a blog post or article, get quotes from experts, then get your contributors to share your article. Alternately, ask someone to write a post that links to your website. Or, write a guest post that links back to one of your blog posts.

Tip 8: Game the system. Google is now paying more attention to what’s called “semantic SEO” by giving more weight to topics over keywords. Optimize your Google rank with blog posts that are about a topic, not just a word or phrase.

Tip 9: Get ideas from analytics. Google Analytics provides key word and phrase reports that you can use for ideas and examples. If you have a topic in mind for a blog post, create a list of all the phrases that are linked to your topic. Include them in your article to generate more search hits.

Make sure to check out our next post, Part 2 of 20 Tips for Kickstarting Your Content, to learn how to implement Crestodina’s next steps for creating irresistible content and improving your web presence.

In just a couple of weeks, Quantum Age Collaborative will head to the Aging 2.0 OPTIMIZE conference in San Francisco, where we expect to find some highly innovative individuals, organizations, and companies navigating their way through the opportunities presented by the longevity economy.

I am particularly excited about one individual on the OPTIMIZE agenda, Jennie Bucove, founder and CEO of Furnished Living, a company with a new line of furniture “that addresses the needs of older adults and people with Alzheimer’s disease and other dementias.”

What’s most intriguing about the products is that they seem to be highly person-centered. I was able to catch up with Bucove recently to get some more details about the company, as well as a sneak peek of her talk at Aging 2.0 before she gives it on Thursday, Oct. 13.

Like many entrepreneurs in the senior living space, Bucove spent much of her career climbing the corporate ladder before her father’s health began to decline and he had to move to a long-term care center. “The home was lovely and extremely helpful to my father,” says Bucove, “but when I visited him I noticed that once he sat down in the chair in his room he couldn’t get up out of it.” As a result, Bucove says she often had to help him get up.

In addition, Bucove noticed that her father’s bed was made with a plastic headboard that was not at all conducive to his mobility or safety. “His furniture looked like it belonged in a dorm room,” she says.

After talking with friends who’d had similar experiences with their parents and loved ones in long-term care communities, Bucove realized that there had to be a market for better furniture—furniture that would both optimize elders’ independence and heighten engagement with staff and family members. “It was a light-bulb moment for me,” she says.

Bucove soon began compiling a design team and launched a search for a manufacturer. The process was not an easy one, she says, but she eventually found the right group of people, which included renowned gerontologist Rosemary Bakker.

The next step was to find a place to put the furniture to use. In a serendipitous turn of events, Bucove met Mike Shmerling, founder of Abe’s Garden, a memory care community in Nashville, Tenn. Shmerling’s father had Alzheimer’s disease and had lived in multiple long-term care centers. “He had been kicked out of every facility because of his disease, so Mike decided to create a community on his own,” Bucove explains.

She credits Shmerling’s entrepreneurial spirit for being open to putting her furniture designs in his building.

“So I worked with Mike and his design firm to fine-tune the furniture before putting them into Abe’s Garden,” says Bucove. Since then, she says she has learned that the furniture is helpful in improving residents’ independence, enhancing engagement with visitors, and helping staff avoid injury, among other things.

Of the eight pieces of furniture designed and produced by Furnish Living, the supply cabinet and the night stand sound most promising to me. The supply cabinet has a magnetic cover that holds cloth and magnetic frames for photos. “It’s made so family members can take them down and look at them with their loved ones,” says Bucove. The door on the supply cabinet also has no handles and it uses a magnetic lock system so that staff need carry only one key fob to disengage the lock, when necessary.

The nightstand has a light that illuminates the floor in front of it so the user can see the floor in the middle of the night—thus reducing fall risks—and a dimmer so that it doesn’t keep sleeping residents awake but allows for enough light for a staff member to check in.

The Aging2.0 OPTIMIZE conference, which takes place from Oct. 12 to 14 in San Francisco, brings together senior care executives, tech companies, investors, and entrepreneurs from around the globe to experience the intersection of aging and innovation.

If you are interested in attending, the Aging 2.0 folks are offering a last-minute discount for those who register with this code: A2NETWORK.

I hope to see you there!

Hung on the door of Bill Clinton’s Little Rock headquarters and originally meant as some levity for fellow campaign workers, campaign strategist James Carville made the phrase, “The economy, stupid,” a battle cry for the 1992 Clinton presidential campaign that still resonates today.

Reasons often cited for the current stagnant economy of the United States include debt hangover from the housing bubble, a slowdown of new technologies, and government over-regulation. A recent academic study from the National Bureau of Economic Research provides another explanation for the country’s lagging economic growth: an aging population.

“The fraction of the United States population age 60 and older will increase by 21 percent between 2010 and 2020,” says the study, which was coauthored by economists Nicole Maestas of Harvard Medical School and Kathleen Mullen and David Powell of the Rand Corp., a public policy think tank. “Our results imply that [Gross Domestic Product or GDP] growth will slow to 0.68% this decade and 1.28% next decade.”

A recent Washington Post article explained that from the 1950s to 2007, the U.S. GDP grew to about 3 percent per year. Since 2010, however, annual growth has averaged about 2 percent. Adding the paper’s dismal prediction of 1.2 percent annual growth lost to aging would keep the GDP at roughly 3 percent.

The rise of the U.S. population aging today is the result of a decline in the birth rate in the 1960s, which marked the end of the Baby Boom era, and the long-running decline in mortality rates. While it is becoming widely recognized (as highlighted in a previous blog) that Baby Boomers are a consumer force to be reckoned with, the new study paints a gloomier picture. Using 1980, 1990, and 2000 Census data and 2009-2011 American Community Surveys from the Census bureau to compare U.S. states with fast- and slow-growing populations, this study finds that states with the fastest increases in the elderly had the poorest economic performances.

The paper suggests that only one-third of the economic slowdown can be attributed to slower labor force growth. Curiously, the remaining two-thirds is due to reduced worker productivity—workers young and old have become less efficient. However, no clear reason is given for the latter finding. The paper postulates that the best workers may be leaving the workforce, despite other studies claiming that the most skilled older workers stay in their jobs longer.

Aging populations in other countries have produced similar results. Take, for instance, Japan, which has the highest percentage of people age 60 and older (35 percent), according to the United Nations. The aging of the Japanese population is due to its low fertility rate (about 1.4 children born to each woman) as well as its highest life expectancy (87 for women, 80 for men). In 2014, sales of adult diapers surpassed those of baby diapers. The country's economy is currently at a tailspin, with a GDP of 1.4 percent.

East Asian countries, such as China and South Korea are following suit. A recent World Bank report predicted that shrinking labor forces in these two countries will increase health and pension spending, as well as wreak havoc on their respective annual economies.

Europe’s economy is also not immune. A similar labor shortage caused by an increasing aging population in Austria, Germany, Greece, Italy, Spain, and Sweden will depress the E.U.’s annual growth by 0.4 percentage points from 2000 to 2025, states a study from the Organisation for Economic Cooperation and Development.

The World Economic Forum’s Global Agenda Council on Ageing predicts that over the next four decades, “rapid ageing of populations will be one of the most powerful transformative forces affecting society … This will have a significant impact in areas such as social welfare, public health and economic prosperity.”

As if it hasn’t been said enough—the aging of our population will have a momentous affect on all aspects of society. What’s more, aging guru Ken Dychtwald, PhD, may disagree with these studies’ conclusions, as a previous post in this space indicates.

Whatever the future holds, it’s important to be aware that an aging population will create a longevity economy that has the potential to be a tremendous asset to our society.

Providers should pay heed to Bob Dylan’s famous song, “The Times They Are A-Changing,” as they may have to adapt to Medicaid’s dwindling funding.

Medicaid has become a safety net for many seniors who need long-term services and support (LTSS), but it appears to be stretched too thin.

About half of today’s seniors over the age of 65 will need daily help as they age because of a cognitive or physical limitation (e.g., dementia, stroke, severe vision loss, or significant pain that prevents movement), states a recent report from the Kaiser Commission on Medicaid and the Uninsured. Such long-term care annually costs an average of $90,000 for nursing facility care, $40,000 for homemaker or home health services, and nearly $20,000 for adult day health care, the report adds.

The report goes on to state that about 30% of current seniors are living in or near poverty and few have private long-term care insurance to meet their needs. As such, they turn to Medicaid. Additionally, middle-class elderly Americans essentially go bankrupt by “spending down” or transferring their assets to qualify for Medicaid coverage.

Most Medicaid spending on behalf of seniors is for LTSS, the report claims, with some states spending a little over half while others spend more than 90 percent.

More than a dozen states are contracting with managed care companies to provide both medical and LTSS to Medicaid beneficiaries, one NPR article wrote, adding that several organizations and policymakers such as the SCAN Foundation, the Urban Institute, and the Bipartisan Policy center are trying to come up with new insurance options that could offset the Sisyphean burden currently placed on Medicaid.

Other than joining a managed care organization or considering bundled payments, long-term post-acute vendors and providers may want to consider other options.

For instance, assisted living facilities, or diversified LTPACs that also offer home care, could opt for funding under the Medicaid home and community-based services (HCBS). The Deficit Reduction Act of 2005 gave states the option, which was currently expanded by the Affordable Care Act, to provide Medicaid HCBS to people with functional limitations that do not yet give rise to an institutional level of care.

Not all states, however, allow HCBS waivers or funding for residential care. According to a 2009 report, 37 states use §1915 (c) HCBS waivers to cover services in residential settings; 13 states use the Medicaid state plan services (personal care or other state plan service); four include services in residential settings under §1115 demonstration program authority; and six use state general revenues.

Another option would be to offer telemedicine to residents. Telemedicine or “telehealth” refers to the use of technology such as videoconferencing, telephones, email, and texting to deliver healthcare services. Benefits to telemedicine include reduced travel costs and better monitoring of chronic conditions such as congestive heart failure or end stage renal disease that may result in fewer hospital visits. In January 2015, the Centers for Medicare and Medicaid Services (CMS) issued new provider reimbursement codes for non-face-to-face healthcare services for patients who have chronic medical conditions.

Adequate access to affordable LTSS for seniors is likely to remain a topic of discussion among policymakers and other stakeholders, such as LTPAC providers, in the coming decades.

Answers to this issue, may be coming soon or remain elusive, or as Bob Dylan sang, “Blowin’ in the Wind.”

Physicians and skilled nursing facilities (SNFs) may be facing a Brexit of their own as to whether they will continue receiving Medicare payments, according to the latest troubling results from the program’s trustees report. Published two months ago, the report was mostly ignored in the news cycle as the world focused on the fallout from the United Kingdom voting to exit the European Union (aka the Brexit vote).

According to the report, an aging population and longer-living enrollees are increasing per-enrollee healthcare costs that will not keep pace with the program’s funding sources. The trustees are calling on policymakers to act with urgency to shore up this essential program, stating that “such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”

Although physician payment updates and new incentives established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) led to more significant physician payment issues than would have resulted from the sustainable growth rate (SGR) approach, these additional payments are scheduled to expire in 2025. In their report, the Trustees anticipate that the physician payment rates will be lower than they would have been under the SGR formula by 2048. If subsequent legislation is not passed to correct the problem, the Trustees anticipate that “the availability and quality of health care received by Medicare beneficiaries would, under current law, fall over time compared to that received by those with private health insurance.”

According to a Medscape Medical News survey, four of 10 physicians in solo or small group practices say the new MACRA payment system will lead to many physicians dropping out as Medicare providers because of what the survey notes as “punishing penalties.”

Furthermore, the Trustees predict that the depletion date for the Hospital Insurance (HI) Trust fund of Medicare—known as Medicare Part A and helps pay for SNFs—is 2028, two years earlier than in last year’s report.

For the past five years, the Centers for Medicare & Medicaid Services (CMS) Chief Actuary Richard Foster reported that MACRA’s Medicare provider payment cuts would make hospitals and other Medicare Part A healthcare providers unprofitable and “jeopardize” seniors’ access to care. The report states that Foster claims “by 2040, simulations suggest that approximately half of hospitals, 70 percent of SNFs, and 90 percent of home health agencies would have negative total facility margins, raising the possibility of access and quality of care issues for Medicare beneficiaries.”

So what can SNFs do to preserve their profits if they chose to stay with Medicare? They can embrace alternative payment options such as bundling models, the virtues of which are discussed in a previous post.

SNFs should also prepare for CMS’ value-based purchasing model, which will commence in October 2018 with the SNF Readmissions Measure (SNFRM). The SNFRM is an all-cause rehospitalization measure, which means that any admission directly to a hospital from a SNF will count regardless of why it happened. Readmissions will be tracked within 30 days of discharge “from a prior proximal hospitalization.” Part A rates will then be cut (or not) at up to 2 percent for one year, based on a SNF’s rehospitalization scores.

Although the model does not take effect until 2018, CMS will look at rehospitalizations beginning this January until December 2017. There are myriad resources and tools available to SNF providers to help reduce hospital readmissions. Taking advantage of them may be one of the most important things a SNF can do to prepare for the coming Medicare payment reduction storm.

In addition, MedPAC proposed to Congress an alternative payment concept in a March 2016 report that calls for a unified PAC prospective payment system to replace the current fee-for-service system. A similar SNF-bundled PAC payment legislation is being advocated by the American Health Care Association, which claims that Medicare would receive $1 billion in expected savings over the next 10 years.

Medicare funding may be dwindling faster than expected, but preparation now is key. Embracing alternative payment models, reducing hospital readmissions, and embracing the longevity economy should be high priorities if you want to claim a piece of shrinking Medicare pie.

For insights on how you can tap into the longevity economy, engage with Quantum Age today.

Businesses may have to pay heed to the adage, “listen to your elders.” According to a recent report from the worldwide management consulting firm McKinsey Global Institute, the 60+ age group will be one of the top three consumer groups to generate half of the global urban consumption from now to 2030.

The retiring and elderly in developed economies, along with China’s working age population and North America’s working age population, form a consumer seismic shift that will “reshape global consumer markets over the next 15 years,” the authors write in the April 2016 report titled, “Urban World: The Global Consumers to Watch.”

Reasons for the economic dominance of the elderly include the high number of baby boomers—the post-World War II generation that resulted from the largest spike in birthrate—entering the 60-plus age group as well as the growing number of those who are aged 75 and older.

Typically these consumers spend more per head than younger people. Although health care remains the main service that is purchased (In developed countries, a 30-year-old consumer spends on average $3,000 per year on health care, while a 60-year-old and a 90-year-old respectively spend annually $8,200 and about $35,000), this group also spends more than 40 percent on transport, housing, and entertainment, the report states.

For example, people over 50 bought nearly two-thirds of the new cars sold in the United States in 2011, the report states, adding that half of all Americans riding Harley-Davidson motorcycles are baby boomers.

The elderly increasingly want to “age in place.” As such, the authors claim that those aged 55 and older account for nearly half of the U.S. spending on home improvements.

Yet this population is not nearly as homogenous as previous generations. Several factors affect the buying power of this age group: retirement age, rate of divorce, spousal death, and the need for, and timing of, assisted living. While they will continue to spend on health care, this generation uses technology at rates closer to those of the 20- to 30-year-old Millennials, enjoys more active lifestyles and vacations, and spends more on good design and higher-cost items when their savings can support it, states the report.

While many in the 60-plus age group are wealthy, others have not saved enough to sustain their retirement. The latter may have to supplement their income by downsizing, renting out rooms, or taking out reverse mortgages, suggests the report. Many baby boomers are also delaying retirement.

According to the report, nearly 65 percent of U.S. baby boomers plan to work past the age of 65; of those, 62 percent plan to continue to work either to maintain income or health benefits, while the rest will do so because they enjoy their work.

This tech-savvy, resourceful, and energetic group is causing many businesses to rethink their consumer models and tap into the longevity economy.

“Companies in every sector—some of which have never been associated with the elderly—will need to prioritize this market as never before,” wrote the same authors in a recent Harvard Business Review article.

For insights on how you can tap into the longevity economy, engage with Quantum Age today.

Bundled payments are here to stay—at least that’s the conclusion one may come to given some recent analyses of the topic. And if the powers that be at CMS read the latest Harvard Business Review, they would find some compelling arguments for making bundled payments a permanent fixture in the agency’s efforts to move Medicare into alternative payment models.

The article, “How to Pay for Health Care,” was particularly helpful in explaining why this model could be very successful in achieving the triple aim the agency aspires to. Authored by noted Harvard Professors Michael Porter and Robert Kaplan, the article offers some persuasive opinions about the potential that bundled payment models have in improving health care, reducing costs, and providing individualized care.

Within the context of long-term and post-acute care, there are two demonstrations under way that impact providers: the Comprehensive Care for Joint Replacement (CJR) model and the Bundled Payments for Care Improvement (BPCI) initiative.

In a bundled payment model providers are paid for the care of a patient’s entire care cycle—such as all services, procedures, tests, drugs, and devices used to treat a patient with a condition such as heart failure or a hip replacement, for example. 

Bundled payments represent one component of CMS’ effort to boost value-based reimbursement, with capitation being the other. But Porter and Kaplan note that under capitation a provider must meet all the needs of a patient population with a fixed payment (per year, per covered life).

As the authors compare and contrast capitation and bundled payments, they are convinced that the solution to improving individualized health care and creating efficiencies will come with the latter. They liken bundled payments to a consumer’s experience purchasing products and services, where a single price is paid for a whole package that meets their needs—such as a car. With the purchase of a car, they argue, the consumer does not buy the motor from one supplier and the brakes from another—they buy a complete product from a single entity.

Bundled payments, they say, simply “draw on an approach long used in virtually every other industry.”

Among the arguments made against capitation is that it creates competition at the wrong level and on the wrong things, “rather than on what really matters to patients and to the healthcare system overall,” the authors state, noting that this is similar to how FFS models have traditionally worked. “Capitation rewards improvement at population level but not at individual level.” It is also not aligned with better or efficient care for each patient’s particular condition.

Another downside to capitation models: The risk factors are complex, which leads to an incentive for health systems to claim as many comorbidities as possible to bolster their revenue and profitability, they contend.

Porter and Kaplan conclude that capitation is wrong because it is a “top-down approach that achieves some cost savings by targeting low-hanging fruit such as readmission rates, expensive drugs, and better management of post-acute care.” The problem with this, they add, is that it doesn’t change how health care is delivered and neither does it hold providers accountable for efficiency and outcomes when it comes to patients and the treatment of their conditions. In short, it restricts patient choice and inhibits provider competition.

A recent analysis by consulting firm Avalere Health asserts that the increase in bundled payment models will impact LTPAC providers in several ways. Among them, will be fewer FFS patients, shorter lengths of stay, fewer readmissions, and a decreased use of costly settings

Avalere also has some predictions about bundled payments for the coming year and beyond: a reopening of the BPCI demonstration for new participants, a potential for new models, and an expansion of mandatory bundles like CJR.

Porter and Kaplan also state that bundled payments “will be the catalyst that finally motivates provider teams to work together to understand the actual costs of each step in the entire care process, learn how to do things better, and get care right the first time.”

These arguments could have a significant impact on healthcare delivery and LTPAC in particular. It’s worth the read.