High-speed Train
1st Apr

“Please don’t miss this train at the station, cause if you miss it, I feel sorry, sorry for you.” Oh how I miss the sounds of Motown! The O’Jays were talking about the “Love Train,” but I am referring to the “get ready for managed care train.”

Since the passing of the Affordable Care Act and the subsequent affirmation of it by the Supremes, not the group. Sorry, that is my last Motown reference. From that time, the American healthcare system has been careening toward managed care for seniors, and the poor that the government has been looking after.

There are several programs which were implemented and have added to that momentum.  There is the Dual Eligible initiative, which is a financial alignment demonstration in nineteen states with Medicare and Medicaid recipients being moved to an HMO. It is a three year pilot project that is designed to bring cost savings to both State and Federal governments. Medicaid Expansion is a program where the Federal government is increasing Medicaid dollars to states to cover those who earn up to 138% of the Federal poverty level. As of February 7, 2014, there were 25 states and Washington, DC participating. The Health Benefit Exchange or “Obamacare,” has a goal of providing up to twenty-nine million people with affordable healthcare by the year 2019. Along with this, there are now fourteen and a half million people enrolled in Medicare Advantage plans in the country today. With the tremendous increase in the baby boomer population, over the next several years, things are going to get interesting.

All of this means a monumental shift in the way skilled nursing providers will have to do business. The lengths of stay are going to get shorter and the reimbursement timelines are going to get longer. Where you were getting paid in fourteen to twenty days, you will soon be paid in forty-five to sixty days. So, cash flow will become an issue. I have only mentioned two issues that will change, there are many, many more.

This may sound like an insurmountable task, but it is not. You must, however, begin to understand the metrics of your business. You must be able to determine how much it will cost you to deliver your services, your length of stay and your readmission rates. In a nutshell, you are going to have to change the way you do business. The train is already rolling down the tracks. It is up to you if you want to get on board or get left behind.

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