2012 l di a a l m ti2012 leadingage annual meeting · · 2016-07-18type of start-up operating...

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2012 L di A A l M ti2012 LeadingAge Annual Meeting

104‐F. Home and Community Based Services: Organizational Readiness

and Reward

October 24, 2012

©2012 CliftonLarsonAllen LLP0 00

ThirdAge, a division of CliftonLarsonAllen

Topics for Today…

• Traditional Models & Current Innovations & Why

• Readiness Decision Tools

– Target Market

– Financial Investment and Return

– Level of Difficulty

– Market and Financial Feasibility

– Assessing Organizational Readiness

– Market Entry Options

• United Church Homes

©2012 CliftonLarsonAllen LLP1 ThirdAge, a division of CliftonLarsonAllen

• Well‐Spring

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Traditional and Innovative OptionsOptions



Home & Community Based Models

• Traditional Offerings– Home Health Care

• Non‐traditional Initiatives– Membership/Club/Village Model F Cl b M d l– Home Care

– Hospice– Adult Day Care

– Free Club Model– PACE– Life Care at HomeAdult Day Care

– Care ManagementLife Care at Home

– Senior Center– Technology


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Why Consider Community Based Services?Based Services?



Why Consider Home Services?

• Mission driven decision• Strategic growth strategy• Strategic growth strategy• More comprehensive service offerings • Manage quality of services delivered on campusManage quality of services delivered on campus• Difficult to access capital – HCBS often require little up‐front capital

• Consumer and government trends• Expanded revenue and increased margins• Leverage management expertise and expense• Increase brand awareness


• Prepare for health care reform

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Decision Tools



Who Does Your Organization Want to Serve?Private Duty

Hospice Home Health

Life Care at Home

Adult Day PACE

Home/Housing

CCRC - IL

Assisted Living

Skilled Nursing

Low Income

Moderate Income

High Income

Medicaid

Medicare

Insurance


Insurance

Private Pay

Investment and Return

Type of Start-Up Operating Breakeven Operating Program Costs Capital (Cash Flow) Margin

Private Duty $100,000 $150,000 Year 3 10% – 15%

Hospice $100,000 $200,000 Year 2 10% -15%

Home Health $200,000 $300,000 Year 2 10% - 20%*

Life Care at Home

$100,000 $150,000 Year 1** 5% – 10%

Adult Day variable $200 000 Year 1 - 2 1% - 5%Adult Day variable $200,000 Year 1 - 2 1% - 5%

PACE $2 to $4 m Included in start-up

Year 2 - 3 5% - 10%


*Changing with Health Care Reform.**Breakeven on an accounting basis in years 4 or 5.

Program Development/Operating Challenge Ranking(1 lowest level of challenge – 5 highest level of challenge)

Private Duty

Hospice Home Health

Life Care at Home

Adult Day PACE

Regulatory Oversight

1 4 5 1 4 5

Management Staff 2 5 5 3 3 5gExpertise NeededDirect Care Staff Recruitment

3 3 4 1 2 2

SBilling, Service Delivery, Compliance

2 4 5 1 3 5

Financial Risk (C )

3 3 4 1 3 5(Cost)Financial Reward 3 1 1 1 5 4

Health Care 1 4 5 5 2 3


ReformTOTAL SCORE 15 24 29 13 22 29

• Care Management• Technology• Technology


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Market and Financial FeasibilityFeasibility

©2012 CliftonLarsonAllen LLP111111


External Market Study Components

Define Service AreaDefine Service Area

Define target marketDefine target market

Analyze demographicsAnalyze demographics

Complete a Competitive AnalysisComplete a Competitive Analysis Complete a Competitive Analysis Complete a Competitive Analysis PricePrice Services OfferedServices Offered Service Area Service Area WagesWages


External Market Study Components (cont.)

Interview Key Informants (aging professionals and Interview Key Informants (aging professionals and possible referral sources)possible referral sources)–– Subjective opinions regarding needSubjective opinions regarding need

Determine Market Need/DemandDetermine Market Need/Demand Determine Market Need/Demand Determine Market Need/Demand Program size based on average utilization, future need Program size based on average utilization, future need


Financial Feasibility

Project census growth (internal and external) and Project census growth (internal and external) and capcapcapcap

Determine priceDetermine price EstimateEstimate Estimate Estimate

hours/episodes of service hours/episodes of service staffing productivity and needsstaffing productivity and needs staffing productivity and needsstaffing productivity and needssalaries, benefits and operating expenses salaries, benefits and operating expenses

ti fti f operating performanceoperating performance investment capital neededinvestment capital needed


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Assessing Organizational ReadinessReadiness



Organizational Readiness Assessment

• Do home & community‐based services support our y ppmission?

• Do we have the start up capital to invest?• Do we have the start‐up capital to invest?

• Who will our competitors be and will there be anyWho will our competitors be and will there be any negative or positive impact on our current business?

• Do we have (or need) the support of our current residents? How will we inform our residents or involve them?


them?


• Do we have the management resources to focus on a new venture?

• Do we have the expertise in the new service or do we need to recruit?need to recruit?

• Do we want to serve residents living on campus only or those living both on and off campus?

• If we decide to serve campus residents only will there be• If we decide to serve campus residents only, will there be enough business to support the new entity?


• What impact will assisting residents to age in place have on the organization?


• Will the new entity be non‐profit or for‐profit?

• What socio‐economic group do we want to serve?

D l i d l h• Do we want to separately incorporate or develop the new entity as a department within our current corporate structure?

• Can we leverage our current infrastructure and support this program (e.g. human resources, finance, billing, etc.)?p g g g

• Do we want the program to be financially self‐sufficient or are we willing to subsidize the program?


are we willing to subsidize the program?

•


• Do we want to serve an age group other than seniors?

• Will this program help position us for Health Care Reform?Reform?

• Will Health Care Reform have a positive or negative• Will Health Care Reform have a positive or negative impact on this program?

• Do we want to develop a new entity, purchase a going concern and/or purchase a franchise?


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Market Entry Options



Options for Market Entry

• Greenfield Start up• Greenfield Start‐up

• Purchase• Purchase

• Franchise• Franchise

• Joint VentureJoint Venture


Greenfield Start‐Up

• Advantages– Complete decision making control– Management chosen instead of inherited– Don’t inherit problems– Initial start‐up capital may be lower than acquisition price– Can develop unique corporate culture and identity– Can grow slowly

Di d• Disadvantages– May take longer to establish – no market presence– Heavy start‐up activities include hiring, establishing office

d l i li i d ddeveloping policies, procedures and processes– Little initial revenue to offset expense ‐must grow revenue over

timeMay fail without the right management


– May fail without the right management

Franchise

• Advantages– Brand awareness– Central advertising– Corporate infrastructure and on‐going assistance/training

• Disadvantages– On‐going costs– For‐profit venture– Limited service area– Corporate branding – may not be able to capitalize on your

organization’s reputation– Share management control


Acquisition

• Advantages– Immediate market presence with operations, staff, customers and

market sharemarket share– May be only option to enter market (CON)– Existing infrastructure– Immediate revenue to off‐set initial investmentImmediate revenue to off set initial investment– Experienced management– Eliminates a competitor– Inherit an existing pool of caregiversg p g

• Disadvantages– Acquisition may require large capital investment – higher financial risk– The organization may not have been valued correctly– Must overcome existing market perceptions – Inherit existing corporate culture

M i h it t M di /M di id i t k


– May inherit past Medicare/Medicaid mistakes– Process may delay market entry

Joint Venture

• Advantages– Can share in the start‐up costs and management oversight– Can leverage both organization’s management expertise– May have a larger referral base

• Disadvantages– New bureaucracy may not have the flexibility required to

succeedsucceed– Must blend two or more corporate cultures– May have differing goals for the program, e.g. financial success,

i imission– Must share in earnings


Contact Information

Sarah Lentz Spellman, DirectorCliftonLarsonAllenCliftonLarsonAllen609‐760‐2991S h ll @ lift l [email protected]


104‐F HOME AND COMMUNITY BASED SERVICES:

ORGANIZATIONAL READINESS AND REWARD

NATIONAL CHURCH RESIDENCES RESPONSE

• Compare HCBS options available to meet our organization’s structure and culture

• Assess our organization’s readiness and the needed capital investment

• How will we integrate HCBS with campus/organizational services to provide

h d lit f lif f id t denhanced quality of life for residents and clients

What is National Church Residences?

i iMission

The National Church Residences Way: Resident Focus

Th i i f N i l Ch h R id i id li h iThe mission of National Church Residences is to provide quality housing and care at affordable prices in communities of caring persons. Our mission is national in scope and originates from a Christian commitment of service to older adults which began in 1961 We have become a leadingservice to older adults, which began in 1961. We have become a leading name in senior services, retirement community management and support for people in need.

i iVision

National Church Residences is committed to continually improving i i b f i h i d l blcommunities by transforming the way seniors and vulnerable

populations live and thrive.

lCore ValuesMISSIONMISSIONWe are drive by a deep sense that our work should serve God and always produceGood for others

We truly care about people and seek to treat residents, employees and neighbors withdignity, respect and fairness.

COMPASSION

g y, p

PROFESSIONALISMWe strive to be excellent at what we do and to be sound managers of resources with solid,ethical business practices

LEADERSHIPWe will be leaders in our field: setting a good example for others visionary growing andWe will be leaders in our field: setting a good example for others, visionary, growing and constantly improving.

• 501 C‐3 Not for Profit• Founded in 1961 by four Ohio Presbyterians• Founded in 1961 by four Ohio Presbyterians

Mil tMilestones • 1961 Bristol Village, Waverly, Ohio (first facility)1977 Fi HUD 202 Aff d bl• 1977 First HUD 202 Affordable Housing facility

• 1992 Hired first Service Coordinator1992 Hired first Service Coordinator• 1993 First Historic Tax Credit, Toledo,

Ohio• 1999 First Licensed Healthcare

Facility• 2001 Initiated System wide Service• 2001 Initiated System‐wide Service

Coordination imperative in Affordable Housing

• 2003 Opened first supportive housing building for homeless

Mil tMilestones• 2005 First Home & Community

B d S i l tiBased Services location• 2009 First Adult Day Site (merged

with Heritage Adult Day)t e tage du t ay)• 2012 Initiated “Aging at Home

Medical Practice” with three pilot isites

National Church Residences Today

Sites & agencies: 337Total Clients served annually: 30,013Campuses : 7Home and Community Based ServiceHome and Community Based ServiceAgencies: 9Adult Day Centers: 6Adult Day Centers: 6Supportive Housing for the Homeless: 5Affordable family complex: 21Affordable senior buildings: 289

li d b iClients served by serviceService Total Clients

d l l hAdult Day Health 609

Skilled Home Care 158

Health & Wellness 380

Medical Practice 550

Skilled Nursing 534

Assisted Living 427Assisted Living 427

Market Rate Independent Living 561

Senior Affordable Independent Living 19,143

F il Aff d bl I d d Li i 1 658Family Affordable Independent Living 1,658

Supportive Housing for Homeless 450

Hospice 125

Client turnover (10‐900%) 5,418

JERRY‐ISMSJERRY ISMS (NOT AUTHORIZED OR ENDORSED BY NATIONAL CHURCH RESIDENCES!!)NATIONAL CHURCH RESIDENCES!!)

f i f i *Costs of Services for Seniors*Hospital $1600 per dayHospital $1600 per day

Skilled Rehab $400 per day

Intermediate Nursing Home $200 per day

Assisted Living $100 per day

Home Health $50 per day

Adult Day Care $50 per dayy p y

Housing/Service Coordinators $25+2 = $27 per day

*Numbers vary by state/level of service and intensity of service

Affordable Housing is delivered in four environments. National Church Residences strives for 3’s and4’s.

1. Old & unsafe apartment building 02. Modern safe apartment building 20%3 M d & f ith i di ti 75%3. Modern & safe with service coordination 75%4. Modern & safe with service coordination and care

management/Aging at Home Medical Practice 5%management/Aging at Home Medical Practice 5%

DONE PREACHING!!

Home & Community Based Services atHome & Community Based Services at National Church Residences• Service Coordination• Quality Assurance for Affordable Housing• Aging at Home Medical Practiceg g• Adult Day Health• Skilled Home Care• Health & Wellness/Private Duty Home Health• Health & Wellness/Private Duty Home Health• Hospice• National Church Residences Rehab• Service Navigation• Fire House Program• Under development (PACE, Care Coordination)p ( , )

HCBS Analysis Answering TheseHCBS Analysis Answering These Questions1. When2. What3. Why 4 How4. How 5. Indicators (#, $)

i di iService CoordinationWhen: 1993When: 1993What: Social Work and related experience associates providing

consultation and support to clients, average salary $33,000. The result of a Robert Wood Johnson Demonstration Grant inThe result of a Robert Wood Johnson Demonstration Grant in 1985

Why: Coordinate services for clients to improve quality of life and satisfactionsatisfaction

How: Secure grants from HUDIndicators: 160 in owned and managed properties

150 in properties not owned or managedSecured 140 grants over the last 5 years for other operators $14 million in 2011S i f i f i d liSatisfaction surveys of associates and clientsPositive margin of 10%

l / ff d blQuality Assurance/Affordable Housing

When: 2003What: Risk Management/file review/consultant servicesg / /Why: Improve quality, protect housing operations investment

interestHow: Mastered level Social WorkersHow: Mastered level Social WorkersIndicators: Cost $3200 annually, 310 accounts nationwide

Positive margin of 30%

i di l iAging at Home Medical Practice

When: 2012What: Primary medical care provided by physicians and nurse

i ipractitioner.Why: Aging in place, care continuity, gap in service availability.How: Clients in 3 pilot environments/CCRC/affordable.p / /

Housing and adult day care have access to these primary care providers for episodic care or as primary provider.

Indicators: Model requires 10‐12 visits per day per service provider, we q p y p p ,track avoidable hospitalization and tailor presence at sites based on need and demand. No margin, annualized startup loss $500,000 annually, breakeven 18 months.

Centers for Senior HealthCenters for Senior Health(Adult Day Services)When: 1984 (National Church Residences 2009)What: Medical Day Care for adults, average 2.5 visits per week, 14%

private pay no Medicare dollars 80% meet a nursing homeprivate pay, no Medicare dollars, 80% meet a nursing home level of care

Why: Aging in place, caregiver support, socialization for the elder, meet basic needs for therapy and medical care Clientmeet basic needs for therapy and medical care. Client satisfaction.

How: 85% are transported to site ranging in size from 32‐105 ti i t d il Cli t ff d id f ti itiparticipants daily. Clients are offered a wide array of activities

and medical support.Indicators: High satisfaction levels, low turnover, negative margin 10%

kill d l hWhen: 2005

Wh t Skill d h i i f iliti i t t

Skilled Home HealthWhat: Skilled home care services in facilities, senior apartment

complexes and the home. Evolution of payor mix from 90% Medicare Part A to 60% Part A replaced with managed care plans that pay below our cost.p y

Why: Improve seamless transition for clients in the system, prospective margin, response to client desire and payment trends.

How: Employment of therapists, nurses and direct care givers, audit charts and billing, utilization of the Alscripts electronic health record.

Indicators: Average length of time on case load 96 days. Home Care Compare on Medicare.gov used to measure quality. Bottom line 5% from startup. The path to breakeven had a range inside 3 agencies from 30 days to 18 months! 60% of clients live or haveagencies from 30 days to 18 months! 60% of clients live or have lived in a National Church Residences facility.

l h & ll / iHealth & Wellness/Private Duty

When: 2005, for new startups we lead with this productWhat: Unskilled services from shopping to bathingWhy: Aging in place, maintain independenceHow: Support to our clients, primarily congregate settings, minimum

one hour visitsIndicators: No margin (Ohio Home Choice Program) a big plus for clients

and agency

iHospiceWhen: 2005When: 2005

What: End of life services/primarily funded by Medicare

Why: Dignity, Aging in Place, Pain managementy g y, g g , g

How: Registered Nurses, Volunteer Program, Chaplancy

Indicators: Pain management, client/family satisfaction, chart & billing audits. Positive margin of 10%. Challenges include physician education, increased support to our Foundation

i l h h id h bNational Church Residences RehabWhen: 2007When: 2007What: Facility, Home Health , outpatient therapy servicesWhy: Improve quality, continuity, reduce operating expenseHow: Employ own therapists, promote positive work environment

and reasonable productivity, decrease therapist turnoverIndicators: 91 full‐time equivalentsq

Turnover for 5 years 7.2%Margin improved by $350,000 annually over contract relationshipHigh therapist satisfaction scoresFlexibility for growth

Assessment

• All HCBS have enhanced our mission and resident quality of life.

• Hospice has been the most consistent and well received• Hospice has been the most consistent and well received.• Adult day reimbursement is inadequate for a stand alone

model.• Aging in place Medical Home has the greatest potential for

payor savings and improved client outcomes.b li C & C C di i ll• We believe PACE & Care Coordination are excellent programs.

• Startup losses are highly variable by site and service, 0‐$500,000 annually.0 $500,000 annually.

QUESTIONSQ

Well•Spring Retirement Community

2008-2011 STRATEGIC PLANNING

• Revenue Analysis• Re affirmation of Not For Profit Status• Re-affirmation of Not-For-Profit Status• Commitment to:

B d C t B– Broaden Customer Base– Increase Maximum Number of Clients

ServedServed– Diversify Revenue

I d Di if M k t P t ti– Increase and Diversify Market Penetration– Mitigate Risk– Explore Partnerships/JVs

MISSION STATEMENT

“Well•Spring is a not-for-profit p g porganization providing aging adults services which create anservices which create an experience that exceeds the needs of an evolving population of olderof an evolving population of older adults.”

DEVELOPMENT OF CORPORATEDEVELOPMENT OF CORPORATE STRUCTURE

DIVERSIFICATION OF REVENUE SOURCES AND GROWTH OPPORTUNITIES FOR BRAND

PACE Home Care v Home Health Home Care v. Home Health Senior Housing

RISK MITIGATION AND STRATEGICRISK MITIGATION AND STRATEGIC PARTNERING

PACE of The Triad PACE of The Southern Piedmont

PartnersPartners• Cone Health• Advanced Home CareAdvanced Home Care• HOSPICE and Palliative Care of Greensboro• HOSPICE and Palliative Care of Charlotte• HOSPICE and Palliative Care of Charlotte

WHAT IS PACE?

• Alternative model of long-term care delivery targeted to nursing home eligible seniors

• P id di l d t i• Provides medical and support services that allow “aging in place. ”

C t ff ti–Cost effective–Improves health outcomes

I d lit f lif7

–Improved quality of life

KEY COMPONENTS – 4 C’S

• C• Community-based: PACE Center/ADHC– Door to Door Transportation

• Coordinated Care – Interdisciplinary Team

• Comprehensive services• Comprehensive services

• Capitated – Risk Managed Program

8

PACE: SERVICES PROVIDED

• Adult day care that offers nursing; physical, occupational and recreational therapies; meals; nutritional counseling; social work and p gpersonal care

• Medical care provided by a PACE physician familiar with the history, needs and preferences of each participant

• Home health care and personal care• All necessary prescription drugs• Social services• Medical specialists such as audiology, dentistry, optometry, podiatry,

and speech therapy• Respite care

H it l d i h h• Hospital and nursing home care when necessary

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ELIGIBILITY & CHARACTERISTICS

• EligibilityEligibility– Resident of approved service area (exclusive) – Certified by FL2 as needing skilled nursing home care

Able to live safely in the community with the services– Able to live safely in the community with the services of the PACE program at the time of enrollment

• CharacteristicsNinety percent plus are dually eligible for Medicare– Ninety percent plus are dually eligible for Medicare and Medicaid

– Almost ½ have dementia as a significant diagnosis

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SUMMARY OF BENEFITS

FOR PARTIPANTS & CAREGIVERS:• ComprehensiveComprehensive• Stay in the community as long as possible• Good care outcomes, high enrollee satisfaction and low

disenrollment ratesdisenrollment rates• Caregiver respite and reduced burnout

FOR PACE PROVIDERS:FOR PACE PROVIDERS:• Freedom from traditional FFS restrictions• Focus on the entire range of needs of individual

Ti htl t ll d t d tili ti t• Tightly controlled care management and utilization systems

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INTEGRATION WITH FLAGSHIP CCRC

• Operations– Dining (1.0 FTE)– Facility Services (.2 FTE)

S it d T t ti (C lti )– Security and Transportation (Consulting)

• Population/Programming• Population/Programming– Negligible

LESSONS LEARNED

• Strong Partners make Good Partners• El t d Ti f• Elongated Timeframe• Complexity

Billing– Billing– Regulations – Survey Processy

• Staffing Models (Timing)• Location, Location, Location

WELL SPRING PERSONAL CAREWELL•SPRING PERSONAL CARE SERVICES

• Home CareHome Care– CCRC Based to Community Based

• Integrated Admin/Accounting/HR• Integrated Admin/Accounting/HR• 25 FTE’s (50 Employees)• 4200 Hours/Month

COSTS

• PACE– Partners Equity– $4 2 Million L O C$4.2 Million L.O.C.

• Home Care1 FTE (RN)– 1 FTE (RN)

– Software– Marketing Materials

THANK YOU!THANK YOU!

Stephen P. FlemingPresident and CEO

[email protected]

2012 l di a a l m ti2012 leadingage annual meeting · · 2016-07-18type of start-up operating...

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