Value-Based Care Series: Michael Bailey, President and CEO, American Health Partners

Michael Bailey is President and CEO of American Health Partners. The company provides long-term residential care and rehabilitation through US Health Communities, as well as health plans designed for nursing home residents through US Health Plans.

Through the Value-Based Care Series, Bailey shares key elements of the American Health Plans model, including the TruHealth approach to care and a joint venture ownership approach with nursing home partners. Bailey explains the three things he believes are necessary for a value-based care network, how skilled nurse operators can get off the “fee-for-service treadmill,” and why he thinks the shift to care based on value is not done quickly enough.

In one sentence, define what values-based care means to you.

I see value-based care as the alignment of goals between provider and patient to encourage proactive and preventative care at the patient’s bedside, thereby improving that person’s overall health and quality of life.

What does a value-based network need to have in place to be successful?

Skilled nursing providers need three key elements to successfully transition to a value-based model of care: a strong insurer who believes in their partners, a medical provider, and a HCV-minded retirement home operator.

An insurer that believes in its partners and has the insight, financial strength and willingness to invest gives providers the latitude to implement a value-based system of care. This insurer is the key, first and foremost.

Second, the medical provider, which is TruHealth in our case, provides access to advanced practice providers who have the knowledge, the proper infrastructure, and the ability to go to a particular nursing home and work with clinical staff. By delivering its value proposition, the provider will provide proactive, person-centered care that will keep those people healthier and reduce unnecessary hospitalizations.

The third element, which is unique to the skilled nursing industry, is a nursing home operator that embraces the value-based model of care. The operator must be willing to let the medical provider in and disrupt the status quo of a fee-for-service model to install a better system of value-based models of care that will improve the health and quality of their residents .

These three elements work together. Value-based care then incentivizes a provider’s time in a way that fee-for-service cannot. Simply put, it allows providers to spend more time with patients and focus intensely on the patient’s condition while providing a model of care tailored to each patient.

In our case, the TruHealth team of advanced practice providers expanded the capabilities of existing clinical staff in the nursing home. We work collaboratively with nursing home staff and the patient’s physician, and the TruHealth team thereby enhances and aligns resources with the needs of the patient at that bedside. This innovation makes a real difference in the lives of our patients. This is the key to success in achieving superior clinical results.

What are the main barriers to achieving value-based care?

The shift to value-based care is a sea change. It’s innovative, and it requires a paradigm shift. Moving to a value-based model is complicated and retirement home operators are like everyone else facing the challenges of change. We believe suppliers need a partner who can help them take the leap.

The SNF operator needs a partner who can create and deliver a model of care tailored to the needs of patients and their residents. They need a clinical partner like TruHealth who will work alongside the SNF leadership team to improve the patient’s quality of life. Our TruHealth clinical team provides coordinated proactive care and eases the clinical burdens of healthcare personnel and facilities management from these skilled nursing operators.

Do you see any downsides to value-based care?

There’s a lot of noise in the market made by players in this space claiming they can’t back up. As a result, it’s hard for patients and nursing home operators to get rid of all that noise. The transition to value-based care requires perseverance, and providers who have a foot in it will not succeed.

Choosing the right partner can make all the difference in the world for a retirement home operator who decides to make the transition to value-based care. And with all the aforementioned noise, this decision requires some caution.

When I say partner, I mean a literal partner, I don’t mean it in a broad sense. Our model is a vendor-owned model, which means it is a joint venture between us and that nursing home operator. Both parties invest capital in the equation.

There are value-based models that offer a financial incentive to the skilled nursing operator, they get it, but the SNF operator does not own the plan. The insurance company owns the plan, it only contracts with the operator. This is a very fundamental difference.

In this case, it’s like they own the plan, they own the Medicare Advantage plan in partnership, in a joint agreement with American Health Plans. I just wanted to clarify that point, because it’s so important.

What role is technology playing in the shift from fee-for-service to value-based care?

Healthcare in general is going through a massive digital transformation, and TruHealth operates with more technology today than ever before. He is there to help us improve our efficiency and effectiveness at the bedside. My belief is that great care is provided at the bedside by wonderful people. Any value-enhancing technology allows our clinicians to spend more time at the bedside.

Technology on the insurance side and technology on the value-based care side need to work together, but the two systems were never designed to do so. Our approach in this regard is to leverage our perspective as owner/operator and insurer to navigate the varying levels of technology expertise and budgets.

We’re stepping in as TruHealth to simplify that and integrate with what those providers have, taking that burden on ourselves. Skilled nurse operators don’t have to install new software or manage data migrations. It’s a burden we take on as a supplier and partner to reduce their need for technology on their end.

Historically, do you think it has been difficult for NFCs to get a seat at the table when it comes to value-based care, and if so, why?

Yes. For years, skilled nurse operators have been on a fee-for-service treadmill. It’s been going on for a long, long time. Nursing home operators have been viewed by major insurance companies and CMS as gatekeepers, not innovators. Value-based care is a sea change, and I believe this is a watershed moment for our industry.

In the world of fee-for-service, care home operators and owners have looked outside, trying to get a piece of the pie based on the value someone else owns. We believe in having the best control of the cake and the best control of the future of your business. That’s why we’re committed to adopting a vendor-owner asset model – it’s a game-changer for the industry.

In operations, this works well because people in an organization work directly with our team to install this program. The result is an insurance program and clinical model that provides better resident care, greater peace of mind for resident families, and better financial performance for the nursing home itself. This is one of those rare cases where you have a win, a win, and a third win for all three attributes.

What role do you think NFCs should play in the value-based care landscape?

It’s a complicated world. As I alluded to before, operators need a partner with expertise, energy and focus. Having worked with approximately 400 nursing facilities, we understand the potholes and challenges, recognizing that each circumstance is unique. Each state is unique. Navigating each one effectively requires time in the field to work hand-in-hand with these partners.

What should SNF operators do in value-based care to get a fair financial reward?

Owners get a share of our model and without divulging the full essence of this model, they get all the financial rewards that come with it. As a partner, we do not share any savings resulting from excellent clinical care, as we do not house patients. Homeowners see every dollar that comes and goes, and the financial rewards that come with providing good care are given back to the buildings that desperately need it today.

Everyone’s struggling to find staff, so we literally like to see where those rewards go and how that trickles down to those facilities. It builds trust, it creates momentum in those facilities, and they want to do better every month and every quarter.

Do you think the transition to value-based care is happening fast enough? If not, what needs to change to facilitate a faster transition?

In my opinion, the transition to value-based care is not moving fast enough.

When you consider the fact that nationally only about 10% of eligible people living in nursing homes are members of a Medicare Advantage plan, receiving a value-based model of care, you realize there there is a huge opportunity. That said, however, it’s hard to move quickly through this transition because, as we’ve discussed, it’s not easy to do.

This requires an insurer who believes in you and who is able and willing to support the transition financially. You need a medical provider who has the ability to perform in a nursing home environment and provide excellent resident care. Then you need a retirement home operator and a partner committed to the model.

Then assembling all these elements is difficult and time consuming. I think the future is very, very bright for value-based care, and that has a profound impact on the retirement home industry today. This is an innovation that puts the patient at the center of the care model and bottom line, value-based care is the right thing to do because our patients and residents deserve it. They receive an improved and coordinated level of care and nursing home operators who take this leap will reap the financial reward. I think the future is bright.