Foundations of Value-Based Care - Episode 1

In this first episode in the NIC Chats series on value-based care, host Lisa McCracken, Head of Research & Analytics at NIC, sits down with Anne Tumlinson, CEO and founder of ATI Advisory, to demystify value-based care in the senior living sector. Together, they break down what value-based care really means and why it matters for operators and residents alike.  

Tumlinson explains how senior living communities can leverage their unique environments to deliver better health outcomes and resident experiences, the importance of scale and partnerships, and the operational and financial considerations of implementing value-based care arrangements. The conversation also explores the evolving policy landscape, including new opportunities signaled by the latest federal strategies, and why the industry is at risk of falling behind.  

Whether you’re a senior living operator, care provider, or industry stakeholder, this episode offers timely guidance on embracing innovation and staying ahead in a rapidly changing healthcare environment. 

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Transcript

Lisa McCracken: Thanks everyone for joining us for this episode of the NIC Chats podcast. I'm Lisa McCracken, Head of Research & Analytics with NIC. So glad that you are joining us today. 

I'm going to introduce our guest panelists here in a second, but I do want to thank our sponsor, Sage. Without their sponsorship of this webinar series — in which we're touching on value-based care from three different perspectives — without their sponsorship and support, it would not be possible. 

In case you want to check them out, they are at hellosage.com. What they do in terms of their solution, they empower senior living communities with real-time data, proactive insights and intelligent care coordination, which transforms operations, enhances resident outcomes, and helps teams make faster, smarter decisions every day. 

So, thank you to Sage, and I know Ann and I will be probably touching on a couple of those things. Welcome Anne from ATI advisory, the CEO and I believe founder of ATI. I'll let you introduce yourself, because you'll do a better job of it than me, just so people have background on the organization and a little bit about you, Anne. 

Anne Tumlinson: Yeah, sure. Thank you. Thanks for having me. And thank you for doing the series. My name is Anne Tumlinson. I am the CEO and founder of ATI Advisory which is a professional services research firm that works to make care work better for everybody. But I would say our differentiation and focus is on the population that has complex care needs and for older adults is my area of expertise in particular. 

So, I've had a lot of wonderful opportunities to work with the senior living operators in particular around how the value-based care programs and the Medicare Advantage program can help, essentially, pay for finance, facilitate, bringing and integrating healthcare and care management on site for residents. 

Lisa McCracken: It's been fun to watch your organization grow over the years. I feel like I'm always seeing about new folks joining. How many, what are you guys up to in terms of team? 

Anne Tumlinson: Yeah, thank you. We are up to about 50 people. Wow. Now Yeah, I know. And I do want to just say that NIC was one of my very first clients. 

When I started the firm, coming out my background was I, worked at Avalara Health, another consulting firm for many years where I led the post-acute and long-term care practice group and also worked to build and launch a business intelligence solution based on Medicare claims data and got to know a lot of the skilled nursing facility post-acute care providers who have been very active in the NIC community. 

And when I went over to launch my own enterprise. I obviously knew a lot of them, and I knew NIC and I knew Bob Kramer, and I was very fortunate to have the opportunity to work on, I think, early days of thinking about, the role of senior living and skilled nursing facilities within the context of value-based care and just the many opportunities that provides. 

Lisa McCracken: Yeah, and I do feel like we've been talking about it for a while, but yet I would observe people are still in very different places. I think that's one of the reasons why we're doing this series. I joke, we often sometimes talk about as in, people are in the first inning of the baseball, scenario. 

But there's still some people picking out their uniforms too. So, I would observe, I think we've got folks in very different places. But the exciting thing for us is, I think we're at this a really unique time right now, and I do want to talk about some of the stuff that came out in recent weeks from the new administration. 

And I know you guys are all on top of that, but let's step back first and if you were to describe to someone, really 1 0 1, throw a little 2 0 1 in there that's okay. Of, what value-based care means in the senior living care sector for somebody trying to understand it. How would you break that down? Because it comes in a lot of different forms and shapes and sizes and... 

Anne Tumlinson: Yeah 

Lisa McCracken: I think it can be very intimidating for a lot of folks, to be honest. 

Anne Tumlinson: It's a phrase that's just thrown around. Correct. All the time. And it is really used to encompass a very wide variety of things. And so, what I always encourage people to do is to start small. 

And what I mean by that is. Just think about your own, let's just back up. Think about your own healthcare. Think about how you interact with the healthcare delivery system. You go to the physician's office and then they bill your insurance company for a visit, go to the hospital, bills for a hospital stay. 

So essentially where our entire healthcare delivery system works and our financing system works is that we pay on units of service. That's it. More units of service, more payment. Value based care in its essence, is really changing that paradigm to pay instead for the outcome of the service as opposed to the unit of service itself. 

And the reason is it’s hard, it’s really hard, because we have to be able to measure and report on those outcomes. We have to know what needs value in order to be able to pay for it. So, in its essence, that's what value-based care is, right? In the context of senior living, and maybe actually before I go there, let me just say that's value-based care. Then there's value-based payment, and that is how you construct the payment in order to get to that higher value outcome that you want from the service delivery. And the easiest way to think about it is that if you're not gonna pay for a unit of service and you wanna reward the outcome on some level, what you want to do is say to the provider of the care, Hey, I'm gonna pay you some money and I'm gonna pay you more if the outcome is better, I'm gonna pay you less if the outcome is worse. In that scenario, what is happening is that the provider is taking risk, what we call risk. And there are lots of different types of risk, but I think for the purposes of this conversation, one of the easiest ways to understand it is like insurance risk. 

Lisa McCracken: Right. 

Anne Tumlinson: We're saying to them, look, this needs to cost no more than X and deliver Y outcomes, and if it doesn't, then you get less money for it, or you lose money as a result. 

So it's important...one of the most important concepts here, is that it is asking the provider to take the risk, not an insurance company. Managed care is, I guess you could argue, a form of value-based care, but it's really not. Insurance companies manage risk, they don't manage care. And what we know to be true is that the only way you could get value out of care delivery is if you ask the providers...if you change the incentives in terms of how you're paying the providers, right?  

So, in the context of senior living, what we're doing is we're saying we have all of these people who are using a lot of units of service in healthcare. It’s low value because it's completely disconnected from anything else that's happening in their care as individuals who need a lot of support around function and cognition. 

And what we want to do is introduce a way of paying for healthcare for those individuals that changes the value proposition for them. And their senior living is a great place to do it because you have scale. Scale is one of the most important enablers of value-based care because you need to be able to, you need, it's...scale's important in everything. 

Lisa McCracken: But what kind of scale are we talking about? Because that does come up often, Anne. So it's like how big is big enough? And it probably depends on what type we're talking about. But because there's scale, then there's concentrated scale and that does come up often. 

But it can be achieved through partnerships and collaborations too. 

Anne Tumlinson: Oh, totally. 

Lisa McCracken: But if you could talk a little bit about that scale piece a little bit. 

Anne Tumlinson: Absolutely. So, I'm going to talk about like operational risk for a minute instead of financial risk. An operational risk is assuming that we are doing something different with the delivery of healthcare. 

One building, let me just paint a different picture. Imagine nurse practitioners in cars driving to individual homes. That is not scale. 

Lisa McCracken: Inefficient. 

Anne Tumlinson: That is, from an operational standpoint, really challenging from a scale perspective. If that nurse practitioner is now driving to a building where there are 50 people, yeah. 

That is a much better sort of operational scale. So that's the first level. And, why probably many senior living operators who might be listening to this or active in the NIC community probably have experienced, this is why the home health agencies, the hospice agencies, the physician groups, others, like they want access to your building because they can come in and deliver what would otherwise be a very operationally inefficient service at much higher scale and concentration. It’s operationally efficient and it's better, it's better for scale.  

So that is like first and foremost, I think when you move into the realm where you're beginning to layer on top of that some degree of financial and clinical risk. So, for example, we need to get a hospitalization rate that is at a certain level, and we need to be able to immunize at a certain level. Or like we have all these metrics that kind of determine value. Ultimately, you’re insurance risk and you're talking about the law of large numbers. 

It's math. Now the thing is, not to get too wonky, the more control that you have, the less big numbers you need. So the reason why an ACO’s requirement is like for 5,000 people, it's because they're all living all over the place and you don't even know who's in your ACO. It’s very hard to get a handle on it. Inside senior living, you have a lot of control. Inside a nursing home, you have a ton of control. That's why if you've, if people have heard of those or the ACOs in nursing home settings do very well because that's a very controlled, really medicalized environment. It gets harder in senior living, but it's still a lot more controlled, right. 

Then just you don't need as many large numbers, like if you're familiar with a program for all-inclusive care, for the elderly Pace, like a Pace center at most will be 300 people. And they're taking full risk for all spending insurance risk on Medicare and Medicaid, and they do very well. 

Of course, payment rates are also quite high, so it helps, right? 

Lisa McCracken: Yeah. Yeah. 

Anne Tumlinson: But basically, I think, if you are an operator that has made a decision that you want to go at risk from an insurance perspective for the healthcare of your residents, you will need more than one building. 

That's where we see these consortiums, like the [...] Consortium and others form partnerships because what they're doing is essentially adding numbers to the risk pool, if you will. But if you don't want to do that, there are a lot of other options. 

There are so many wonderful enablers and partners. It's just a very exciting time. I go to, I went to the NIC Spring Conference and I just got back from LTC 100, a Lincoln Healthcare Event and, I'm just so impressed and excited by the robustness of the market to bring solutions. I think this is something that you want to do, and we can talk about the why in a minute, but there's a lot of really great choices. 

Lisa McCracken: Yeah. 

Anne Tumlinson: Partners. 

Lisa McCracken: Yeah. Now I definitely think that we have evolved, without a doubt, and there's more conversation than ever about it. And I appreciate that you separated the value-based care from the payment, because to me, when I look about this, look at the systems and whatever you, maybe call it, or however you structure the care piece to ensure there's positive outcomes and so forth. 

That's just a better way of, I say, doing business, but providing for just a better quality of life for the residents, and higher resident satisfaction. There's a lot of secondary benefits outside of the payment piece, but I think you've gotta have all of that in order, like your ducks in a row, to be ready to enter the payment piece of it. 

It’s not like you just flip a switch and say, okay, we're all on board here. But I do think you mentioned the why. I really think that's important to say, okay, what’s the why here? Why should I care about this? Is this the flavor of the month or the year or, okay, CMS wants it, but what’s in it for me? Is it like, if you don't, you're going to be in trouble down the road? Can you paint that picture and the compelling why? 

Anne Tumlinson: Yes. People need to pay attention. Yeah, and what I have learned over the last few years is that, particularly going through COVID with this industry and everything, is that it's been a tough sell. 

And in part because the business of value-based care and the business of healthcare are really very different from what most operators are doing on a daily basis. However, the consumer, the resident, and their family are increasingly asking or requiring of them, what their solution is going to be. 

That it has the features that enable a much better sort of care, an overall holistic care management experience. So maybe putting just a finer point on it. Not to sound like, I feel like I'm echoing Bob Kramer right now, but... 

Lisa McCracken: I find I do that sometimes too, 

Anne Tumlinson: Which is a good thing. 

It's a very good thing. But the adult daughter or son does not want to spend all their time at the emergency room. 

Lisa McCracken: Sure. 

Anne Tumlinson: And the only way, I mean value-based care and value-based payment are the mechanisms to finance the care management and the healthcare delivery inside of that building for those residents. 

It goes together really well. And, I think if you want to take it a step further, you could say, oh, this gives you the senior living community the opportunity to get paid for some of the value that you're already delivering. I think if you want to finance programs that you know your residents need around medication management, care management, onsite primary care - they need those things. That's a much consumer experience, and it's an expectation increasingly of the consumer and their family. The good news is that it's like there's so many ways to get that delivered and paid for in your building. 

You could go out to the market and pick and choose how you wanna do it. I think where we, and I will just put myself in this bucket, where we ran into some challenges was I'll, just say I, was trying to make a financial case to senior living, you should do this because there's a lot of savings here, and you should be, if we can reduce ER rates or hospitalization rates, then you can reap that reward and like there's so much value that these primary care groups are getting from being in your building and you should get paid for that. And the fact of the matter is that just wasn't that compelling. I think of a case done on pure financial terms, but I still remain convinced that ultimately this is what the residents really need and want. 

And, more importantly, there's a lot of ways to do it now that are pretty low risk, low lift and still have some financial upside. 

Lisa McCracken: I think the options definitely, that's one of the nice things that there are more ways to participate and be engaged than in the past. So before we get into sort of some of the stuff that's been rolled out recently, I do want to just have you talk a little bit about where this does come into play outside of skilled nursing. I think skilled nursing is the obvious one and the obvious place, and again, you definitely have more control over that group and they have the highest, acuity and chronic health needs. 

But we've done that work with NORC at the University of Chicago and we looked at the settings outside of the nursing home. To say, these individuals who often have many chronic health conditions, assisted living, memory care, even independent living, we know do. And there are things that there's value that we are providing to those individuals that helps keep them out of the hospital, keeps them living longer and so forth. 

So, if I'm someone that doesn't have skilled nursing, what's this mean for me? Is this the primary care play with some of my residents and partnering on that front and the ACO? What's this mean for me if I'm not in skilled nursing? 

Anne Tumlinson: Oh, gosh. Yeah. I think it's, the way I look at it is, it means you can bring healthcare home for your residents. 

It's not about medicalizing the setting, it's quite the opposite. It's about competing with the community where healthcare at home is becoming increasingly used. I can get, if I live in Pittsburgh right now and I'm in the Highmark Health Plan, I can get SNF at home. 

When I leave the hospital. I can get, like a wide, like if I live in Richmond, I can get, At Home Harmony, they have a traveling, advanced practice nurse set up with telehealth and remote patient monitoring. And so these models are developing in real time all over the place, for people who live in the community. 

So in a way it's like there's, as I said before this, the opportunity for senior living is like really leveling up what it is that you do and you offer to residents so that it competes with the best of what they could get even in their home. And I do worry about the industry falling behind. 

Lisa McCracken: So, isn't that interesting? Falling behind what residents can get in their own home? 

Anne Tumlinson: Yes. Like you want to be better than home. And I think as long as we in the industry are taking advantage of our scale and the business overlay to enable healthcare at home, we've created a whole other value proposition for our future residents that is harder to deliver at scale at home. If we don't, I think we get outcompeted over time because of technology, AI, digital health and things like that. 

Lisa McCracken: Yeah, it is interesting when I think back about what some of that value proposition has been even in years past about, oh, hospitality on demand, we can provide transportation or this and that. 

We live in this sort of uberized on-demand economy, so you know, I can get stuff delivered, I can get people to take me somewhere and this and that. Now, the socialization piece isn't in there, but, yeah, I agree. It's very interesting to think about it that way of the pace of what is happening, the evolution in your home versus how quickly are we as a sector keeping up with that.  

Anne Tumlinson: Yeah. 

Lisa McCracken: It's a very interesting thing to think about.  

Anne Tumlinson: And you're super charging the value of healthcare because of what you already do, right? So, you have that socialization in place. You have the long-term care pharmacy in place, or you have these pieces. You're bringing it all together and supercharging that it's like a value multiplier when you bring the healthcare on site to all the things that you're already doing. 

Lisa McCracken: Yeah. So I'd love for you to comment on, when, you see senior living and care organizations, again, whether it's CCRC, a nursing home, a memory care community, when you see them getting traction in this space, doing things well, are there certain, common elements of success or attributes that they have where you might say they've really devoted resources to this or invested in this? 

Are there common characteristics that you see among them?  

Anne Tumlinson: Yeah. I think it's going to sound very basic but this isn't, you have to be good, you have to just decide that you're going to be a good partner to whomever you're working with. In other words, you do have to align around the business goals. 

So if you've chosen a partner and everyone has agreed on kind of the overarching goals, then you simply have to commit to whatever kinds of change management that you have to do on site in order to make it clear that this is a priority in your organization. That's it. Executive directors have to be bought in. 

Your onsite staff have to be bought in. They have to be. And your partner has to know how to work with them and make it work for, so the, it's really that, the hardest part in all of this is just that on the ground integration. Because in order for this to work, your residents have to sign up. 

For whatever it is, whether it's a primary care physician or whether it's a Medicare Advantage plan, or it's both, or however it's working in your organization. And there are many different flavors, it won't work if the organization's not committed and the people on the ground level aren't well integrated with the partner in alignment with the common goal. 

So that's hard work. That's really the hardest work. Everything else is simple. Yeah. But that, piece is really quite challenging. And like if, the protocol is, you don't call the ambulance right away anymore. Or like you have to be a good... 

Lisa McCracken: Change management. 

Anne Tumlinson: Yeah, so it's like having good quality to begin with and being ready to partner well, and to do the change management and to adhere to some of the kind of care processes that need to be in place. But it's very doable. But it does require some change. 

Lisa McCracken: And I would think grit is part of that change because sometimes you take two steps forward, one step back, right? We pivot; we change. But if you have the right partner, you can work through that stuff together. So I think about grit and I think about patience because not all this happens quickly and it depends, and sometimes if you're in this model and you're getting upside risk or you might have to wait a long time to get that payment and so forth out of the government or whatever. 

So, I want to spend a few minutes here at about the last five minutes of our time. Getting your take on where we are now because there's obviously been a lot happening quickly during the current administration for the good or for the bad. But there has been a new strategic vision rolled out by CMMI, and I think I'm not the expert in this, you are certainly more than I am, but I think many of us looked at that and saw this is pretty promising, and I think this reinforces that we have the opportunity for a seat at the table. So, can you just recap where you see some of the opportunities right now with the new administration and what you saw emphasized? 

Anne Tumlinson: Yes. Yeah, I'd be happy to. It's a pretty broad stroke strategy and, some of the concepts are very similar to what we've seen in the past, but there are a few key differences and there's some breadcrumbs, as you might put it, or signals, in the text that are really new and different and exciting to me. 

And I've never seen the Center for Innovation, they call themselves the Innovation Center now instead of CMMI, explicitly, call out caregivers in their strategy along with, I've never seen the words functional decline and cognitive decline function and cognition. I've never seen those used in a strategy that's being promulgated by, like at the beginning of an administration to say this is something that we're going to be very focused on going forward. And, in particular, like even in-home support services were mentioned. So, I think, it remains to be seen what the details of any kind of models that'll be coming out will look like. 

I think it's very notable that the Guide model, the dimension model was not discontinued from the previous administration. I think that we could see something very creative and maybe even similar to the Guide model coming out, to help meet the needs of individuals and Medicare beneficiaries who have cognitive and functional decline, their family caregivers. 

But there were a couple other signals in there that I think are important clues. One was the word prevention. And what I loved about it was that we often talk, like we are always talking about how we're serving people who have already experienced pretty severe functional decline, as opposed to what do we do to intervene in that trajectory of functional decline, like in the earlier stages to help delay and prevent decline, to prevent the more expensive spells of morbidity towards the end of life. And I've always felt that there is a lot more that we could be doing if we set the incentives up correctly. So, I'm excited to see what else will happen there. And this is where independent living, active adult, low income seniors housing, places that aren't maybe... 

Lisa McCracken: Middle income. 

Anne Tumlinson: Middle income, yeah for sure. Yeah. There is a lot of interest in the population we call near duals.  

Lisa McCracken: Yeah. Yes.  

Anne Tumlinson: Meaning people who are not yet duly eligible for Medicare and Medicaid but have relatively low income. And then the other thing that was explicit was that they would be looking to foster models where the provider has the risk directly, as opposed to what we might call enablers. So this is, this would be like the primary care organization, the hospital, the health system really being on the hook for that insurance risk, but having a lot more flexibility and tools, more like an insurance company, than we've seen in the past. So, like the ability maybe to do prior authorization or the ability to pay for things that wouldn't otherwise be covered by Medicare. I think it's exciting to see what is coming down the pike. 

I think the senior living industry and all its partners should be paying very close attention. Yes. Because there could be some incredible opportunities.  

Lisa McCracken: Yeah. It's something we want to stay on top of and we call it the Partnering for Health strategic initiative of our strategic plan. 

But all of this stuff falls under that umbrella, here. We’re going to continue to make sure we are partnering with experts like you and others in the industry that day to day have your eyes and ears to the ground with this. I do think it's an exciting time and it's a little bit of the time now. Our opportunity is now for this.  

Anne Tumlinson: We are not a moment too soon. The baby boomers just started turning 80. 

Lisa McCracken: I know. Yeah. A little overwhelming, but it's exciting at the same time too.  

Anne Tumlinson: I agree.  

Lisa McCracken: Any final comments as we wrap this up? 

I know we're about out of time, but are there any final words of wisdom for our listeners?  

Anne Tumlinson: I, no, not really. Huge kudos to you, Lisa, for your leadership and to NIC for this, for the vision, to be in the spot that you're in it takes a lot of courage, I think to be out in front of something that isn't necessarily, as obvious to everybody as we would like it to be. 

And, but I think it's gonna be very beneficial to the industry as these next few years unfold. Really excited about the work you all are doing.  

Lisa McCracken: Thank you. And, again, we appreciate partners like all of you because at the end of the day, groups like you too are educating it to do the right thing, because at the end of the day, all this boils down to what is in the best interests of the older adult, the senior or family and the workforce and so forth. So thank you, Anne. I really appreciate your time with us and thank you again to Sage for their sponsorship. We encourage you to check out the other editions of the NIC Chats podcast. But appreciate all of you listening and, thank you for joining us here today, Anne.  

Anne Tumlinson: Thank you.