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Much has been written about the expected "silver tsunami" of senior citizens that will soon reach an age that often necessitates long-term care.

The number of people 65 and over already hit the half-billion mark in 2008. That same population will soon outnumber children aged 5 and younger for the first time in history, according to the U.S. Census Bureau.

Long-term care facilities are therefore facing a triple challenge of:

• preparing for this record number of new patients;
• maintaining and improving quality of care while facing staffing and financial challenges; and
• adjusting to the impact of IT and other mandates resulting from healthcare reform.

Preparation is in the Eye of the Provider
As of mid-2010, only 35 long-term care facilities achieved five star ratings across all quality measurement segments - which include overall, health inspection, nurse staffing, quality measure and RN ratings - from the Centers for Medicare & Medicaid Services. (See " Billian's HealthDATA InFocus Market Report: Nursing Home Quality Ratings," Sept. 15, 2010").

How will these facilities maintain their ratings in light of the anticipated influx of new admissions? What can the remaining market share of long-term care facilities do to prepare and even match their higher-quality counterparts? It depends on whom you ask.

"I believe we are ahead of the curve when compared to other colleagues in the industry," says James Malloy, Administrator at Fairview, a 120-bed, non-profit skilled nursing care and rehabilitation facility in Groton, Conn., that is owned by Odd Fellows Home of Connecticut Inc. The five-star facility has invested $5 million in a number of new upgrades and additions to prepare for the expected surge of new patients. "We reconfigured space, eliminated 32 beds, increased the size of our rehabilitation department, added more private rooms, added two hospice rooms, increased the size of the nursing stations, created new lounge space and added a bistro restaurant.

"Several months ago we closed a free-standing child daycare center and are currently converting that space into independent apartments for seniors," he adds. "We are concurrently developing a master plan to add additional housing and assisted living on our campus."

Marc Herrera, Vice President of Skilled Nursing Administration and Risk Management at Southern California Presbyterian Homes (SCPH), which oversees five-star-rated, Glendale, Calif.-based Windsor Manor, sees things a little differently.

"Quite honestly, we are not in a good position to prepare for the influx of people forecasted to need long-term care services in the future because of the lack of capital and what appears to be a reducing number of people able to pay ... [our annual] cost," explains Herrera. "There is also a well-documented shortage of key personnel including administrators, directors of nursing and doctors."

"Improvement in recruiting and retention are critical to future success," says Brian Hudson, Senior Vice President at Avant Healthcare Professionals, a healthcare staffing company that provides professionals to long-term care facilities in 25 states. "This includes improving the quality and quantity of basic education and training; increasing financial incentives; improving the work environment; and employing progressive strategies to develop a robust healthcare workforce, which includes transitioning workers from other industries, and employing internationally trained healthcare professionals."

Considering the Financials
Both providers and patients wonder where the money is going to come from to pay for long-term care.

"Nursing home care is predominantly a Medicaid-reimbursed program that does not adequately compensate for the true costs of care," Herrera says. "The private pay population has been shifting to assisted living care for years. Healthcare reform will further incentivize payment to long-term care, but we are not seeing it yet."

Hudson adds that "the challenges that assisted living facilities are faced with is the uncertainty of reforms and how they will impact profitability."

The bottom line is more important than ever now, as facilities struggle with making ends meet in light of both their patients' shrinking pocketbooks as a result of the recent economic downturn, and any incentives they may receive as a result of healthcare reform.

"Most are lacking capital for program and physical plant improvements," says Herrera. "Many are looking at electronic medical record innovation, but this is also a 'wait and see' due to the impact of healthcare reform - how will technological innovation be funded and integrated with hospitals and doctors? We are somewhat buffered since we operate relatively small nursing facilities, and our nursing homes are integrated into multilevel, continuing-care retirement communities."

IT Gets an Upgrade
Electronic medical record s (EMR s) are one element of healthcare IT that these types of facilities are certainly paying attention to. Fairview has upgraded its IT systems, recently installing a new financial system and EMR.

Healthcare IT upgrades are also of major importance to the preparations of the Avanté Group, a skilled nursing and rehabilitation organization with facilities in Florida, N.C. and Virginia. "The company is moving rapidly to convert to a fully electronic medical record to increase efficiency and reduce errors," says Arnie Kruisland, Vice President of Ancillary Services at Avanté Group Inc. "Each provider is making modifications and preparations to suit their specific niche," Kruisland explains. "In a highly competitive environment, distinguishing oneself from the pack provides a competitive advantage ...."

Quality Still Above all Else
A long-term care facility's biggest competitive advantage is the level of quality it provides to its patients, and so it goes without saying that that these facilities will continue to strive for five stars.

Quality data plays a central role in decision-making at Avanté, whose Leesburg, Fla., facility is currently rated with five stars. "The company has fully embraced the Five Star Quality program," Kruisland says. "Quality Measure/Quality Indicator data is reviewed monthly and is an integral part of each facility's quality assurance process."

Windsor Manor bases its system-wide goals on such philosophical principles as quality first, the not-for-profit difference, talent management, and a key management/ operational focus for skilled nursing.

Fairview continues to strive for operational excellence by focusing on: enhancing quality of life and providing superior service and care at competitive rates; continuing advancements in technology, treatment and facilities; exceptional satisfaction to those served; having a skilled, motivated and caring workforce that believes Fairview is a desirable place to work; and being a vital community resource exercising responsible stewardship.

What it's Going to Take
Though many long-term care providers are in the position of "wait and see" when it comes to adopting new technologies in light of healthcare reform and its associated incentives, most know that adequate preparation, though a huge challenge, is something they must undertake in order to maintain that competitive edge.

It goes without saying that quality - five-star or otherwise - will not be achieved if long-term care facilities are not ready to meet the needs of so many more patients. Time will tell if the nation's elderly will be well-served by this segment of the healthcare market.

"The future may reveal both vertical (hospitals) and horizontal (other senior-living providers) integration," Herrera adds. "What is certain is that we are currently operating in a hyper-turbulent environment due to the economic downturn and unknown impact of healthcare reform!"

Source: Billian's HealthDATA