Magic or mayhem: What’s ahead?

Predicting can be a fool's game-so many unforeseen events, personalities and circumstances can intrude to cloud the crystal ball. Predictions are as notorious for being wrong as for being right. Still, after you've been around for a while and developed some sense of discrimination between the golden clues and the dross, you can begin to discern at least a reasonable view of the future. I venture to do so with a field with which I've been associated for nearly three decades-that is, 10 predictions for long-term care, starting with the Big One foreshadowing all the rest.

FINANCING: THE QUIET DISASTER

It is a disaster: A family with a frail elderly loved one or suddenly disabled young person encounters the personal expense of long-term care for the first time and falls, quickly and unexpectedly, into the impoverished ranks of Medicaid. A disaster for providers, too, as their margins are squeezed by already tight state budgets, if not lost altogether. Add to that Medicare reimbursement cuts amounting to 11.1 percent this fiscal year, along with a never-ending housing crisis smashing traditional private-pay piggybanks, a private LTC insurance industry struggling to find its financial footing and raising already hefty premiums, and a steadily diminishing middle class.

Even the one piece of potential relief in sight, the CLASS (Community Living Assistance Services and Supports) Act, met its demise recently with the Obama administration's decision to suspend it idefinitely. Designed to be supported by premiums paid through voluntary payroll deductions for five years, but with uncertain public buy-in, CLASS was a testament to actuarial fogginess, with no one quite sure of its fiscal soundness.

This all adds up to a quiet disaster because those families that stumble into long-term care one by one are generally unaware of the financial realities until it's too late. This lack of public understanding explains government policies that casually cut facility reimbursements by the billions and eventually hundreds of billions of dollars without large-scale debate.

This is the environment governing all the predictions that follow in this article. By the same token, as the vast baby boom generation and its parents start learning their LTC lessons the hard way, public perception will grow exponentially. The LTC financing model will almost certainly change no matter what happens to Medicare, Medicaid or CLASS. The predictions that follow do in fact indicate what that model will eventually look like, and which providers will likely succeed and prosper.

But first, a grim reality:

REGULATION: IT'S INEVITABLE

OBRA ′87 and the Minimum Data Set (MDS) occurred well after Ben Franklin's time or his list of life's inevitabilities would have read, “death, taxes-and regulation.” Whatever happens with LTC financing, operational models or public perception in the coming years, continued regulatory micromanagement is a good bet for this field.

Within the past year SNFs have been hit with a complicated update for the MDS (never an easily comprehended document to begin with) which, among other things, changed RUG-based assessment rules and expanded the discharge process for already time-challenged staff. More recently the PPS Final Rule calls for far more detailed rehabilitation documentation and assessments rescheduled in ways threatening potential confusion. Misinterpretation in this field is dangerous, of course, as it can lead to reimbursement cuts, outright denials-or worse. Government is cracking down with the recently introduced Recovery Audit process, and the Affordable Care Act (“Obamacare”) has placed new emphasis on federal enforcement of LTC corporate compliance, with specific program requirements, new penalties and possible federal False Claims Act prosecution for the worst offenders.

Meanwhile, the 20-plus-year-old state survey process continues unabated, despite uneven enforcement efforts by the states and the gradual advent of an alternative survey approach called the Quality Improvement Survey (QIS). Adding to the regulatory challenge are workplace safety requirements from the federal Occupational Safety and Health Administration and ever-changing labor relations dictates from the National Labor Relations Board, among others.

LTC leaders are challenged to maintain updated regulatory compliance without adding significantly to costs. Those who will succeed are among the elite of American business managers, even though no one says as much.

TRENDS: HOME SWEET HOME?

To read the headlines, nursing homes, assisted living facilities-even CCRCs-might as well close their doors and go home. Go home, that is, to serve that vast majority of people who wish to remain there the rest of their lives. Recent data from the AARP and the National Association of Home Builders, for example, indicate that 89 percent of people 50 and older want to remain in their homes indefinitely, and 75 percent of remodelers are receiving increased orders for aging-in-place work on private homes. Combining this with developments in home-based technologies (see “Technology”), what possible reason would people have for moving into facilities?

Trend-watchers see a different picture. “There simply won't be enough human labor available to staff at-home care of this magnitude in the future,” says Andrew Carle, assistant professor and director of assisted living/senior housing administration at George Mason University, Fairfax, Va. “When the last of the Baby Boom retires in 2030, we will have 35 million more jobs in that sector than we will have people to fill them, especially if current restrictive policies toward immigration continue.” Social isolation could be a particular problem for home-dwellers unless existing transportation networks upgrade significantly. One recent study found that, by 2015, 15.5 million Americans over age 65 will live with poor access to transit.

However, facilities are evolving in important ways to meet the challenge. Wellness facilities are seeing major growth, with a 2010 survey conducted by the International Council on Active Aging (ICAA) finding that 77 percent of providers were planning to add more wellness-a 51 percent increase from the previous year-and with 41 percent planning capital projects. “There was a time not long ago,” says ICAA CEO Colin Milner, “when I'd be shown the door for talking about wellness because, I was told, we'd be ‘killing residents.’ But the last five years have seen growth and the last two have been ka-boom in this field.”

Despite increasing home- and community-based options, such as naturally occurring retirement communities (NORCs) and urban villages, the better facilities will do well, if only because they're the most efficient model of service delivery for this population. They just have to survive today's tough times.

HEALTHCARE SYSTEM: TEAR DOWN THESE WALLS!

Echoes of former President Ronald Reagan's famous clarion call to East Berlin's Russian masters are being heard these days by LTC operators. When regarding the future of the freestanding facility within its four walls, operators may be tempted to ask: What future?

That certainly seems to be the consensus of analyst reports on the outlook for standalone facilities-particularly SNFs-now under the gun to form partnerships and alliances with hospitals, physicians and home care agencies. They're confronted by a set of acronyms: ACO, PACE, CCRC Without Walls.

No matter what the prospects are for the controversial Accountable Care Act, those partnerships and alliances are beckoning, both for SNFs and for assisted living facilities. Medicare initiatives to reduce hospital readmissions (more on that in “Clinical” section, Part 2) are forcing hospitals and nursing facilities to size each other up more closely than ever. SNFs will need to be open and transparent with hospitals and even take the lead in creating the new relationships. “Yes, the dollars will absolutely be controlled by hospitals,” says Cheryl Phillips, MD, vice president of advocacy for LeadingAge. “But if SNFs can only appreciate the depth of information they have, and take the initiative in sharing key clinical data, they can say to the ACO [accountable care organization], ‘This is a time of innovation, and you can't do it without us.’”

Phillips recently authored a LeadingAge/CAST report called “A Look Into the Future” (www.leadingage.org/uploadedFiles/Content/About/CAST/About_CAST/CAST_Scenario_Planning.pdf) and found further evidence of crumbling of traditional healthcare silos. “We're moving toward virtual facilities now,” she says, “with nursing homes without walls such as the PACE [Program of All-inclusive Care for the Elderly] model and CCRCs Without Walls delivering aging-in-place services to their communities.”

The traditional facilities that remain will very likely merge with one another into larger organizations that can better withstand the competitive pressures the new partnerships might bring upon them, according to the LeadingAge report. In short, the walls will continue to crumble. “Those that don't see this,” says Phillips, “are in for a very hard time.”

TECHNOLOGY: SOMETHING TO WATCH OVER ME

One of the more fascinating-and timely-convergences of technology and social change has been the advent of electronic devices enabling frail elderly to stay at home longer and more safely than ever before. This is happening just when healthcare economics and popular sentiment are forcing increased attention on aging in place. The devices range from personally worn sensors, to smart home-based functional monitoring systems, to interactive clinical monitoring systems supporting telehealthcare.

It's still very early days-these devices are not widely known about, and those who do know of them can be put off by questions of personal expense (no insurance coverage) and privacy (the number of one's trips to the bathroom or refrigerator are nobody's business). But important developments continue-for example, systems that monitor resident physical and brain health, track medication compliance and promote socialization. Other established companies have weighed in, too, with Wi-Fi systems and touch-screen communication using fail-safe mesh technology.

LTC providers are gradually catching on, says Majd Alwan, vice president of the Center for Aging Services Technologies (CAST), the LeadingAge arm that makes it its business to track such developments. Despite the lack of public awareness or financial reward for offering such services, providers are beginning to grasp that this technology is very much of its time.

Look for five more of Richard Peck's predictions for the LTC industry in the December 2011 issue of Long-Term Living Long-Term Living 2011 November;60(11):26-31

Richard Peck

Richard L. Peck was editor in chief of I Advance Senior Care / Long-Term Living for 18 years. For eight years previous to that, he served as editor of the clinical magazine Geriatrics. He has written extensively on developments in the field of senior care and housing.