How to Combat Four Long-term Care Market Shifts

The skilled nursing industry is in a state of flux, but there are solutions.

Michael Rivas, Senior Vice President of Risk Services, Assurance

According to recent data by the Centers for Disease Control and Prevention, there are over 65,000 paid and regulated long-term care (LTC) facilities in U.S. serving about 9 million patients.

The LTC sector includes everything from nursing homes, adult day care service centers and home health agencies to hospice homes, assisted living communities and other residential care centers. The LTC market is experiencing significant shifts because attitudes towards long-term care are changing. Owners and operators are in the midst of developing creative solutions for the evolving industry by diversifying services and increasing specialized care.

Hospitals used to keep patients longer. There was a clear difference between nursing homes and assisted living offerings. In addition, family members and residents weren’t as informed.

Fast forward two decades to now, we see the largest living adult generation (baby boomers) are retiring. Chronic disease rates are rising. There are longer life expectancies. Lastly, advances in medical technology will result in a record number of individuals needing LTC services.

A significant shift in healthcare acuity has occurred, whereby assisted living and skilled nursing facilities are taking on the responsibility of more acute residents. This shift has caused a domino effect of increased professional liability insurance premiums. This is also coupled with low workforce retention rates integral to improving quality of care and meeting changing demands.

Here is a closer look at some of the challenges due to the LTC market shift.

Challenge 1: More Acute Residents in LTC Communities

Hospitals used to keep patients longer. Now hospitals are discharging patients early, transferring them to a post-acute facility. This has resulted in longer stays and the need for more diverse forms of medical attention across the LTC spectrum. LTC facilities are responding to these shifts by employing more nurses, post-acute providers, doctors and other healthcare professionals to tend to resident needs.

Owners and operators have begun working with risk managers to create programs that allow for these services to be possible. Human resource departments are also recruiting specific skillsets to match changing demands.

When the owner-operator attracts and retains top talent, the workforce then has a major impact on improving quality and minimizing risk. Improved quality helps with occupancy rates and profitability. A focus on minimizing risk can reduce incidents that cause high claim costs.

For instance, resident falls are the most frequent claim in the LTC market. Partnering with an insurance broker, carrier or safety provider can help in creating fall prevention programs to minimize risk. Your health insurance broker can even provide strategic direction on low- or no-cost benefits that can attract and retain the talent you need to execute these programs.

Challenge 2: Quality of Life Expectations

As post-acute facilities continue to evolve, so do the mindsets of the resident and their family members. Emphasis on an individual’s quality of life has become increasingly prevalent.

One of the largest trends shaping the LTC industry is how communities are shaping their services to the residential clientele. Over the past few years, many of the more progressive facilities have moved toward a hospitality business model, as opposed to the more traditional nursing home setting. This differs immensely from decades ago.

Baby boomers want the benefits of living in a green building facility with quality services and green living options such as gardens and even a solar power generated facility.

Challenge 3: More Informed Families and Residents

Family members and residents are becoming more informed. The internet allows families to come to site visits with more questions and expectations from what they read is happening at other communities. Reviews and ratings are readily available.

This poses a challenge for owners and operators, as they are forced to adapt to the needs of the customer in order to compete in a growing market.

Customer service and risk management programs are important to keep residents safe and families happy. With the shifting market, owners and operators are looking beyond just meeting public health regulations. They are turning to more progressive risk management programs that include fall prevention, vestibular rehabilitation, wellness, strength and safe patient handling.

Although it is a costly initial investment, these initiatives can reduce the severity and frequency of claims. A better claims experience can curb rising liability and workers’ compensation insurance costs that LTC facilities are faced with due to residents staying longer and more acute care needs. These preventative strategies will also increase quality of life, employees/resident safety and inevitably family satisfaction.

Challenge 4: Desire to Age in Place

More and more individuals are looking to age in place. Since a resident’s length of stay is increasing, additional services and structural changes are required.

Continuing care retirement communities, also known as life plan communities, are multi-faceted with a higher quality of care. These communities have apartments that allow for more independent living, along with assisted living care for residents that may need help intermittently throughout the day in another wing/building. In addition to those two areas, multi-care communities also have skilled nursing for individuals in need of consistent memory or physical care at the highest level.

Retirement communities are starting to look like a campus and offer the full spectrum of care from the lowest level to the highest. However, a campus like the one described is not as common as one would hope, especially in dense urban areas with limited amounts of land.

As the LTC industry continues to evolve, so will its challenges. Improvements that will never go out of trend include creating more risk management programs to improve quality of life for your residents, expanding your facility into an all-encompassing community, or focusing on retaining and attracting top talent.

Michael Rivas is senior vice president of risk services at Assurance. He oversees the company’s risk services department, which includes compliance, wellness, risk transfer, safety and claims.