Paul Willging Says…

Today’s association upheavals put LTC unity at risk

In the spirit of full disclosure, I hasten to add that I served as president of two of those organizations, AHCA and ALFA. That might, on one hand, suggest that I’ve been too close to the turnover to objectively assess the reasons for it. But I might also have been in the best position to isolate its significance. I leave it for my readers to decide.

It’s easy, of course (and superficial) to attribute the departure of any CEO simply to “conflict”-conflict in personalities, conflict in management styles, conflict over policy. I guess, to same extent, that is a part of the equation, even in those cases when it is the president who decides that, for mostly personal reasons, the time has come to move on. The story of such “amicable” transitions is, after all, made incredibly more compelling when the president describes “tension” within the organization. But having been personally involved in two of those transitions, I can assure you that such analyses don’t go deep enough. Tension-be it a product of personality, management style, or policy-is usually rooted in much deeper concerns.

I would argue that such transitions are more often than not the result of the failure of all parties to share common missions or the same definition of “value.”

Let’s start with AHCA. From its inception in the late 1940s through most of the next two decades, AHCA’s focus was as much on camaraderie and professional development as it was on effective representation in the public-policy arena. At its second annual convention in 1949, AHCA saw as its primary objectives:

• to improve the standards of service and administration of member nursing homes;
• to secure and merit public/official recognition and approval of the work of nursing homes;
• to adopt and promote programs of education, legislation, better understanding, and mutual cooperation.

Representation was almost an afterthought, and understandably so. Not until the advent of Medicaid in 1965 did the lobbying function begin to take on the importance it has today. Unwittingly, Medicaid became the primary source of financial support, public or private, for nursing facilities. The industry took on many of the characteristics of a public utility (with very few of the attendant advantages). And with that financial imperative came a necessary emphasis on public policy. The industry became what economists refer to as a monopsony-essentially, a single-customer market. Since the customer was government, the focus of the association had to move from an inward emphasis (e.g., professional development) to an external one (i.e., influencing legislation and regulation).

That was, in reality, the reason for a transition in AHCA’s leadership in 1984, when I assumed the position of executive vice-president. It was assumed, given my background with the federal government, that I was in a position to move the organization more vigorously into the realm of public-policy representation. (That confidence on the part of AHCA’s leadership might or might not have been well founded-I leave that also for my readers to decide.)

But I came quickly to my own conclusion that, while enhanced emphasis on lobbying was important, and even imperative, it could not become the sole rationale for a trade association’s existence-at least not one purporting to represent the entire nursing home industry. That conclusion was based on the makeup of the industry itself. In the 1980s and 1990s, AHCA represented (and still represents today) an extremely diverse clientele. It has both proprietary and nonproprietary members. It has the big guys with hundreds of facilities, as well as the “mom and pops.” It looks out for the interests of those in states with differing levels and forms of reimbursement and licensure. And as a federation (as opposed to a direct membership organization), it represents multiple state associations, with their own panoply of interests and characteristics.

Not all of these entities share a single-minded dedication to representation as AHCA’s primary-some would argue exclusive-focus. For many (as one of my early chairpersons was fond of informing me), the purpose of an association was to “associate,” with the annual convention being members’ primary interest. Others looked to professional development. For many, it was the association’s publications that served as the principal attraction.

The list of membership advantages was endless-but not for one critical (and quite vocal) segment of the membership: the multifacility corporations. For the “multis,” the association’s mission was, first and foremost, public-policy representation. There were no other functions important enough to warrant the price they paid for membership. It was, quite simply, the effectiveness of the association’s lobbying prowess that created “value” for the multis. And there’s nothing intrinsically wrong with that. Let’s be honest with ourselves, trade association membership is an expensive proposition for a large multifacility enterprise. As with anything else it purchases-be it supplies or insurance, utilities or public relations-a business looks for a return on its investment.

What I felt the multis failed to realize was that their goal, no matter how laudable, was best met within a broader structure that combined their interests with those of facilities whose primary interests lie perhaps in other areas. My view was a simple one: Alone, the multis carried too much political baggage to be taken seriously; the multifacility corporation was better served by presenting its views in concert with a united industry.

And simply throwing dollars at the issue wasn’t going to change that. Individual operators can augment the resources available to the large corporations. They have leverage in the political process that can never be emulated by the multis. They are, after all, of the community. The multis are, almost by definition, from outside the community, at least in the command and control sense. It’s much more likely that you are going to be a confidante of a legislator if you went to high school with her rather than if you simply send her a letter (even with a PAC check) from corporate headquarters nine hundred miles away, or send a lobbyist from two states over.

Combining the strengths of both parties was, I thought, key to AHCA’s success. And for 15 years that formula seemed to succeed-until, that is, Medicare PPS arrived in 1997. Now we added yet another complicating factor to the equation. Now it was not just public policy, it was one topic within public policy: Medicare reimbursement.

PPS is a perfect example of hubris misplaced. I remember so vividly (because I attended so many of their Wall Street presentations) the enthusiasm with which the multis greeted PPS. They truly thought this was to be somehow their long-term fiscal salvation. You can imagine their consternation when the opposite transpired. Howls of pain began emanating from corporate headquarters: The very future of long-term care was in jeopardy. Ten percent of the industry was faced with impending bankruptcy. The quality of service stood on the precipice. Only additional federal dollars could avert absolute Armageddon.

I could spend another column on the reasons for multifacility missteps when it came to Medicare. But that’s not the purpose of this column, which is to suggest that single-purpose entities within a multipurpose organization tend to rend the fabric of common goals and mission, of a common definition of value. And the end result is likely to be internal tension that can quite literally tear the organization apart, as it almost did to AHCA (and might still).

The recent AHCA story is a simple one. In an attempt to augment what it considered inadequate AHCA lobbying, the multifacility corporations established their own organization, the Alliance for Quality Nursing Home Care. In a deal brokered with AHCA’s leadership, the members of the Alliance were given credit for dues paid to their organization as though they had been paid to AHCA. You can argue over whether that was a good deal for either party (I have my own opinion), but it was the attempt by recent AHCA leadership to return to the more traditional dues process that led to the recent upheaval in the organization.

But, again, those were mere symptoms of the underlying problem: failure to agree on a common mission, a common purpose, and common goals. Associations sometimes delude themselves into thinking that membership loyalty is somehow their birthright. Nonsense. Associations are businesses, just as their members are businesses. If those respective businesses don’t share common values, one is bound to fail-and it will seldom be that of the dues-paying member. Indeed, my definition of our primary function as trade associations was to protect the business interests of our members. It is their business interests, after all, that induce them to join our associations in the first place.

None of my AHCA members disagreed with that definition (although, admittedly, it took some time to persuade some of my nonproprietary members that they, too, were in business; they just put their profits to different purposes). For my part, I argued that protecting the members’ business interests went beyond lobbying. Lobbying would be of no benefit if public perception of the industry was negative. And public perception was as much a function of how well we performed as how well we said we performed.

No, the problem was not the definition of our primary purpose. It was to maintain a common definition as to what our business interests were and how best to achieve them. That required mutual tolerance among members. The multifacility corporations might not themselves have required the professional development activities of the association, for example; most of these companies do it themselves. But if that was what created “value” for the mom and pops, then so be it if the end result was a stronger association. The independents might not have understood the rationale for such heavy involvement in the topic of tort litigation, but if that created “value” for the multis, then so be it if the end result was a stronger association.

It was once that fabric was torn asunder that AHCA stood on its own precipice. How well it can pull back, only time will tell. I know the association is proposing changes to its governing structure, and that’s not unimportant. But it isn’t sufficient. Structure cannot create, in and of itself, a sense of shared value. That can come only from leadership. And, hopefully, leadership-on both sides of the debate-understands that reality.

What about ALFA and the College? Well, the underlying principle remains the same: a shared sense of “value.” At ALFA, it was also the multifacility corporations that precipitated major changes in leadership and direction. And that was, perhaps, to be expected. The association was established by one of the major corporate actors in the industry, and its board consisted largely of members from the larger corporations. During my days as president of ALFA, I attempted to reach out to our state affiliates and emphasize the role of the smaller independent provider. That was a transformation not uniformly supported, and my tenure was a limited one.

But I have to give ALFA’s leadership credit. With my departure and the advent of a new president, the association made it clear what it considered to be its primary focus and who its primary clientele is. Therein, perhaps, lies an essential difference between the two organizations. AHCA preached unity of purpose, but underneath the surface lay a simmering cauldron of discontent waiting to erupt. ALFA saw the potential of conflicting goals within the organization and made an explicit choice as to which path it chose to follow. It has now publicly positioned itself as being “exclusively dedicated to professionally operated assisted living communities” (emphasis mine; read, multifacility corporations). As a result, while it might have sacrificed its role as an organization representing the broad diversity of assisted living membership, it also is more likely to operate, and operate successfully, with a common sense of “value” and purpose.

At the College, there was also a question of perceived “value”-in this case, value as perceived by individual nursing home administrators and the price they’ve been asked to pay for it. I’ve always been impressed with the continuing improvements made to the College’s product line-and equally dismayed by what appears to be a constant disinclination on the part of its membership to pay for it. ACHCA has been beset for years by an inability to induce potential members to support, with very modest dues, the association’s role in professional development. Its immediate past president fought for years to enhance that sense of “value.” While succeeding in enhancing the product line, she, as was true of all of her predecessors, could never successfully come to grips with the problem of stagnant membership. Here, too, multifacility corporations were a part of the problem. Unwilling to support financially the membership of their administrators in the association, the multis effectively precluded the College from marketing its products to a substantial part of the industry.

But, again, can one fault the multis? While they supported their own training programs, the price asked for membership in ACHCA was not commensurate with the perceived incremental value to them.

However, ACHCA is not a trade association. Observing unity of purpose, in the broader perspective, is necessary when looking to the future of the trade association known as AHCA. And that is the challenge AHCA must face if it is again to become a vital representative for long-term care. Unity of purpose is not easy to come by and even less so to maintain. It is a disaster when unity is lost, and it is recovered only with great difficulty. Let’s hope that AHCA can pull it off. There’s too much at stake for it not to.