Plans would come to include an elaborate courtyard, a large upscale dining room, a library, and a modern and spacious gym for rehabilitation.

But there was one snag before the building could come to fruition: The site had a “very small” family cemetery sitting on it. Franklin, who oversees Franklin Architects, says there are “ways to handle” such relocation issues that are respectful. 

It was the biggest challenge the team faced, and after that, it was all systems go for the site, which is 20 miles east of Chattanooga, just off Highway 75. The building opened in February 2013.

Franklin commended the building’s interior design team, noting how Life Care Centers of America considers “every detail, down to the bedspread.”

“They aren’t just stamped out. Each designer brings individual flare,” Franklin notes.

Interior designer Megan Jones also laid out the neighboring Life Care Center assisted living center, The Bridge at Ooltewah. She says there is a team effort in making the centers thrive.

“Everybody is putting their minds together,” she says, from the selection of a courtyard statue to how she designed sample rooms. She chose rust and terracotta colors for the SNF. A spa area, for example, features tile and flooring that reflects the color scheme, she says.

The skilled nursing facility, which has 70 private rooms and 25 semi-private rooms, is easy to navigate. Amenities include flat-screen televisions with a speaker by the bedside and heat lamps in the showers.

All rooms have a window view, and a physician suite was built into the plans, former administrator Ginger Crawford says. The dining area includes carpet and an array of menu entries, such as an “always available” option.

“Patients can stay in their rooms for meals, but we encourage them to get out,” she says. The dining area also has a private room for celebrations, and a separate ice cream parlor, which is a big hit with families. Open from 2 p.m. to 4 p.m., the ice cream “helps promote calorie intake,” for residents, she added.

Ooltewah encourages families to spend their downtime or work hours there. The Wi-Fi in the library area allows them to bring their laptops, Crawford says. 

The rehabilitation area includes an anti-gravity treadmill, and it has a separate entrance for those receiving outpatient services. Franklin notes how the center “has some of the best equipment” and that the site also maximizes the ability to be outdoors.

“There’s a putting green and physical therapy courtyard, and the whole courtyard has different walking surfaces,” he says. “As someone is recovering, you can take them over concrete, gravel or steps.”

The bottom line, Franklin explains, is the center offers “a homelike environment with a hospitality twist.” 

That may be good news for the frontline workers and other staff who literally do the heavy lifting. But it’s not so great for those who have to make sure payroll is met.

So what gives me the gall to suggest this coming surge? The short answer is that after some very tough years, our economy is slowly crawling out of the crater caused by the Great Recession. The obvious signs are more companies are hiring, and real gross domestic product is on the rise.

But the real clincher is a recent jobs report. That would be the one showing that the nation’s overall unemployment rate has dropped to 5.6%. 

As things are trending, the unemployment rate will be reduced to 5% this summer, well ahead of 2016 — when the Federal Reserve was expecting that goal to arrive. In fact, the Deutsche Bank is now predicting that unemployment may actually drop to 4.7% by year’s end.

And given the “If you give a mouse a cookie” nature of our economy, wage inflation is all but certain to be on the other side of that coin.

To be clear, there won’t be too many union stewards crying on behalf of operators suddenly facing higher staffing costs. 

The reality is that such expenses have been moving little if at all in the past few years. And if we are going to be completely honest, many operators have benefitted greatly from current market conditions that have allowed them to keep a lid on labor costs while borrowing money at ridiculously low rates. Talk about serendipity.

But that does not change the simple fact that labor remains the single highest cost of doing business in this field. 

It’s a rare community where salaries and wages are not at least half of the budget. At many places it’s closer to two-thirds. In some communities, it’s actually north of 70%. At least, that’s what some of the people doing the math keep telling me.

Given that elephant in the room, any hint of higher wages will get heartbeats in the accounting department racing pretty quickly. So please don’t shoot the messenger. I’m simply here to tell you that wages are going to be going up. 

The only real question is by how much.

Perhaps technology’s greatest gift is its ability to transform resident care and satisfaction, and improve outcomes. As Majd Alwan, Ph.D., senior VP of technology, LeadingAge, and executive director for the Center for Aging Services Technologies, explained, “Technology has the potential to improve the accuracy and timeliness of care documentation, shift the paradigm of care from reactive to proactive, support care coordination, improve health and quality of life, and increase efficiencies of caregivers and staff.” 

If that’s not enough incentive for operators to get on board, they may also want to consider that technology can give them a strong competitive advantage.

“Incoming seniors and their families are looking at environments where technology is utilized, and they’re favoring those entities over those still overtly using paper charts,” noted Maria Moen, VP of Care Innovations at VorroHealth. “Technology implementation can bring the management of resident care and conditions, as well as the surrounding environment, to a level where safety, quality and satisfaction are natural outcomes.”

Technology also can help facilities’ bottom line. Doug Fullaway, VP, Senior Living, RealPage Inc., pointed out that technology that helps control purchasing costs and eliminate paper invoices can help facilities be more competitive with their pricing. What’s more, it can help operators determine how much staff is really needed, based on residents’ needs, which can help facilities make the most of their existing resources, he said.

Broadening the reach

The combination of advancements in wireless and mobile technologies, advanced user interfaces and sensor-based technologies has made applications — like point-of-care documentation by staff and remote monitoring of biometrics, activities and behavior — relevant and easy to use, Alwan noted.

Medication management is one key area being transformed by technology. Some solutions, such as the MatrixCare CareAssist application, combine electronic medication administration records (eMAR) and Point of Care in one application. This gives caregivers the information they need to provide personalized service, while also “reflecting the reality that caregivers in senior living communities wear many hats,” said Kim Ross, Senior Director of Marketing for MatrixCare.

What’s more, when the medication management function is electronic, med techs and nurses can be alerted to any missed medications and can take appropriate action in a timely manner, added Eric Kolber, VP of Senior Housing at Yardi Systems Inc. 

“Not only are errors reduced in that way, but operational efficiencies are gained as well,” he pointed out. 

With paper medication administration records, staff must sort through paper at the end of a med pass to look for missed medication — a lengthy and often error-prone process, Kolber continued. “With electronic medication management, the software immediately and effortlessly delivers this information directly to appropriate staff,” he said.

Timeliness of data entry and documentation is another technology advantage that can improve accuracy, especially in senior housing where the pace is fast and caregivers often find themselves managing multiple tasks and caring for multiple residents inside the same general time period. “[This] creates an even wider potential for not documenting every service,” Moen explained. “Inaccuracy is always a possibility, too, if you’re not writing what you do and what you see as the moment is occurring.” VorroHealth’s application allows for tablet documentation of resident condition and service provided, while allowing for a console view at a full computer for times when overall care delivery management is needed.

Mobile technologies that manage and document care delivery will have a tremendous impact on residents’ quality of life, assured Ross: “Caregivers will have their task schedule for the day and information on residents’ individual preferences at their fingertips, resulting in efficient, personalized service delivery.”

Experts added technology-enhanced care management can positively impact staffing. Care management takes the mystery out of staffing to meet resident acuity, said Fullaway, and mobile task completion lets staff view task lists specific to each resident and close the loop by marking the task as complete from their smart device.  Based on the resident-specific assessment, the RealPage Care Management software creates a service plan, assigns tasks to caregivers, calculates the cost of providing the service, and creates reports in state-mandated formats. 

Staff retention and satisfaction are other upsides to targeted staffing and scheduling solutions, added Mark Woodka, CEO, OnShift. 

“Our smartphone app for staff increases employee retention by getting staff engaged. Reducing time spent on administrative tasks and automating manual processes frees up more time for care,” he said.

Enhanced interoperability is improving technology’s depth, tying together previously disconnected software and hardware to streamline data capture, analysis and dissemination, and reduce redundancies. Resident security solutions are just one example. 

“In the past, a caregiver would carry pagers and hear alarms for many different systems – one for a legacy wired nurse call, another for a mobile pendant alarm, and location-specific alarms for fall management and elopement,” said Laurence Yudkovitch, product manager, Long Term Care at RF Technologies Inc. The Code Alert system allows all systems to be fully integrated and send alerts to caregivers on their preferred device, whether it’s a pager, walkie-talkie, Cisco or EnGenius phone, or their mobile device. “This reduces alarm fatigue and makes the facility more homelike.”

Beyond that, technology gives administrators better tools to track resident needs and caregiver efficiency. “Advanced reporting capabilities allow administrators to determine optimal staffing levels and ensure residents are being cared for promptly and accurately,” Yudkovitch added.

Easing transitions 

As organizations strive to run more efficiently, technology makes it easier than ever for them to implement and maintain best practices, and streamline care transition, discharge and intake processes.    

“One of the tasks in a skilled nursing facility during intake is to verify patient eligibility, and have the clinical case manager review and approve the patient for admission,” noted Bud Meadows, executive VP, ABILITY Network. Its eligibility workflow service automates this process and allows patient eligibility to be managed, monitored and updated from the moment of intake to the ongoing care that is delivered.

“Both intake and billing staff have access to the same patient information that can be routed to their work queues. Managers are also provided performance dashboards, so they can measure the effectiveness of their intake programs.” 

ABILITY’s new transition of care service lets acute care facilities electronically route referrals and send discharge information directly to SNFs. The SaaS-based service can be deployed in days at a low monthly cost, and helps SNFs, hospitals and home health agencies facilitate the transition of care with communication that replaces phone calls and faxes, Meadows said. 

Technology also allows integration of electronic health records and enterprise resource planning solutions. This integration helps ensure facilities are providing the best care — and the best care setting — for each resident. 

“By connecting these areas in a single system, sales staff can market their communities and manage their leads, and then easily include clinical staff at the appropriate point in the cycle to assess a prospective resident’s housing and care needs,” said Kolber, referring to Yardi’s Senior Living Suite, which combines a complete ERP solution with the latest EHR technology. “As the cycle continues, proposals are converted to leases, and prospects are moved in as residents — with no redundant data entry, and with billing and accounting staff receiving a 100 percent accurate picture.”

Clicking with residents 

More than ever, technology also is helping residents stay connected and engaged.

“There’s a broad array of social connectedness applications, including video conferencing on lightweight tablet computers, that are popular among older adults,” Alwan said. Not only do these devices have simple, user-friendly icons on graphical user interfaces that are activated by touch, but they also come packed with accessibility features, including voice activation, enhanced contrast, large fonts, zoom-in functions, and read-aloud for individuals with vision impairments.

Further, technology can contribute to a positive family experience by allowing family members to stay involved with their loved one’s care and activity participation. 

Yardi’s software, for example, allows wellness program calendars to be maintained and resident participation tracked through the online Resident & Family portal.

Official policy since Oct. 6, the rule stems from a Drug Enforcement Administration initiative to reschedule hydrocodone combination products to Schedule II of the Controlled Substances Act. The DEA’s rationale for the move is to combat prescription drug abuse. Hydrocodone combination products had previously been listed under the less restrictive Schedule III designation.

Tim Williams, director of pharmacy operations for Guardian Pharmacy, says he understands the intent of the measure and generally supports the move.

“This new rule came about from a lot of research and it has been made for a legitimate reason — hydrocodone is addictive and it slips out into the public,” he says. “The DEA felt it needed to act.”

Even so, the shift of hydrocodone combination products from Schedule III (C-3) to the more heavily controlled Schedule II (C-2) poses potential complications and delays for residents with chronic pain, especially as it relates to refills, pharmacy specialists say.

“Since a C-3 drug is allowed to be refilled five times — or six months from the date the original prescription — and C-2 drugs are only allowed full fills once or partial fills for up to 60 days, a written prescription from the provider will have to be obtained more frequently,” explains Rob T. Shulman, director of consulting services for Remedi SeniorCare. “This could result in a serious delay in obtaining the prescription, especially at night and on the weekends, when prescribers are commonly less accessible. The delay in obtaining the prescription will result in a delay of the patient receiving the medication.”

The main opioid pain medication affected by the change is Vicodin, a combination of hydrocodone and acetaminophen. The drug is commonly prescribed in the long-term care environment, Shulman says, so pharmacists are expecting to spend more time with Vicodin prescriptions.

“From an operational perspective, processing a C-2 takes an estimated 15% to 20% more time, due primarily to an increase in recordkeeping compared to a C-3,” Shulman says. “This is both pharmacy technician time and pharmacist time during product review. This added labor cost would most likely be absorbed by pharmacy providers.”

Still, the new rule will also create an impetus for strengthening relationships among senior living professionals, Williams says.

“It is also an opportunity for us to help the prescribers and communities,” he says. “We need to collaborate with the DONs and physicians and come up with better processes to get medications to the residents who need them to control their pain.”

Associations concerned

As the new rule went through the input phase before becoming final in early October, the American Pharmacists Association and American Society of Consultant Pharmacists expressed concern about patients possibly being deprived of vital medications.

“While the ASCP commends the DEA’s efforts to combat prescription drug abuse, we believe that the increased controls imposed on these products will have an adverse effect in senior living settings,” association officials said in a prepared statement. “Because many residents of senior living facilities are patients living with chronic pain, it is imperative that they receive relief in a timely manner. It is likely that the increased controls will delay access to these crucial medications.”

Meanwhile, APA officials said they were anticipating confusion around refills of prescriptions written before the regulation took effect.

Technology factor

Because hydrocodone combination drugs are fast movers, pharmacies are increasingly relying on automation to dispense them, says Dawn Astorino, marketing communications manager at Parata. The regulatory change affects the way pharmacies label and package these prescriptions, she says, as well as their security protocols, inventory, recordkeeping and reporting. 

“For many pharmacies, this means removing Schedule II drugs from automation and more time counting by hand,” Astorino explains.

Some companies, including Parata, offer secure dispenser kits to enable pharmacies to continue automating hydrocodone combination drugs, however. The kits contain tools to secure, track, audit and report on controlled substances.

The company’s system has cells that automatically lock when they are closed and stay locked until they are removed from the unit. The cells are replenished while in the unit and open only when an authorized user verifies a barcode match between the cell and the stock bottle.

Device demand

Kirby Lester experienced “a significant increase” in demand for its KL1 and KL1Plus tablet counting devices immediately following the new rule’s launch, says Mike Stotz, the company’s senior marketing manager. In a one-month period, Kirby Lester experienced approximately a 45% increase in direct inbound inquiries via website and telephone, and a 30% increase in KL1 tablet counter devices either sold or shipped out for a free trial. 

“Our customers who might have been putting off any changes with their systems started going through the hydrocodone medications they produce and realized there has to be a better way than double-counting by hand,” Stotz says. “They need the right impetus for investing in automation and this is it. Now they see it as a tool to help their business rather than as an expense.”

New opportunities

While changing hydrocodone’s status for combination drugs may cause some challenges for pharmacists and patients, Guardian’s Williams prefers to see the situation as a new opportunity.

“I don’t like to use the word ‘challenge,’” he says. “Anytime there is a change, there will be a period of time to look at processes. I don’t see a challenge — I see reality. My job as pharmacist is to make sure my patients are being treated. If we have to get those meds, we need better communication with prescribing physicians. The regulation does provide an opportunity for physicians to evaluate patients’ needs; whether that is changing from hydrocodone or not, that is something the physician could do.”

Williams sees the consultant pharmacist role becoming more important because the pharmacists are charged with evaluating patients monthly, and also with determining which therapies and treatment plans would best help patients manage their pain.

“Each individual is unique, with different needs,” he says. “Depending on the findings, they may see an opportunity to get a patient to try something else, such as tramadol, which is Tylenol with codeine.”

Shulman agrees tramadol could be a viable option.

“It is an opioid that is not covered by the new changes,” he says. “It is restricted, however, due to its abuse potential and is not considered a viable alternative when a written prescription cannot be obtained.”

Under the C-2 protocols, refills for hydrocodone combination products are being curtailed and physicians are charged with writing new prescriptions.

The full impact of the new rule may not be known for a bit, Williams says, because six-month refills written before the start date still had to be honored.

“We will know more when the refills expire in April,” he says. “Nevertheless, this is an opportunity for physicians to strengthen their relationships with patients.”

No going back

Despite the concerns associated with the new rule, Shulman says the reclassification is likely to be a permanent designation.

“The widespread heroin epidemic, coupled with an increased public awareness of drug abuse in general, means the outcry to restrict access to addictive prescription drugs will continue to escalate,” Shulman says. “This could cause more pain medications to get reclassified. The Controlled Substance Act is not a document the DEA has traditionally changed with much frequency or without good reason. Therefore, I do not foresee this getting repealed or modified any time in the near future.”

Memory impairment has a way of turning life upside down. It’s the main reason I co-authored the book, “I Care — A Handbook for Care Partners of People with Dementia.” The book is not just for family members who accept the daunting task of caring for a loved one, but also for the professional caregiver, who spends a significant portion of the workday navigating challenges. 

The question for family members and professionals is the same. How can I help the person diagnosed to achieve the maximum level of independence and self-sufficiency, and enjoy the highest life quality possible? Often lost in the process is the impact on the caregiver, which is why we prefer to use the term “care partner.”

A “caregiver” is just that: It’s someone who provides the necessities for the memory-impaired person. A “care partner” is someone who creates an environment in which the person contributes to his or her own care to the degree possible. “Impossible” is the typical response we hear when such a methodology is suggested either to the family care partner or the professional. This is because the conventional method of care approaches the situation in much the same way as caring for an infant. This does not mean the caregiver is lacking in love or compassion, but rather misinterprets what is needed. 

An infant is incapable of caring for itself because of a lack of experience and a lack of motor skills. A person with dementia, typically, is not lacking either. The goal should not be to satisfy every need. Instead, an environment should encourage independence and allow the person to meet his or her own needs. This, however, requires the caregiver to adopt a new mindset and develop a new approach.

A new approach

The new approach is being used in many out-of-home communities caring for the memory impaired. The results from our workshops in teaching this new approach is encouraging. Participants have been enthusiastic, participative and eager to try the strategies. Follow-up to our training continues to reveal considerable success in the way dementia residents have been responding. Behavioral issues have been reduced, families are delighted, and professional care partners are more motivated and fulfilled in their work.

One finding emerges from all our workshops. Specifically, professional care partners have the desire to see residents flourish using best care practices but lack the education. Once they begin to employ the new techniques, they are shocked to see how residents respond and how bad behaviors diminish. They also notice a drop in their own stress level, allowing them to provide even better care.

Our model is not complicated. Here are some of the highlights:

1. Recognize a person with dementia has his or her own “reality.” Avoid trying to drag the resident into your reality – join them in their world.

2. Don’t correct unimportant information expressed by the resident even when you know it is inaccurate. Referring to their grandchild with the wrong name is not critical to the well-being of the resident. Instead, engage the resident in way that might help them remember accurately.

3. The resident will have difficulty retrieving accurate information. But, remember the essence of the person is very much intact.

4. Do not use care techniques that you would not like used on you. The resident has cognitive issues; they have not lost their mind. For instance, don’t force a resident to bathe. They will likely be uncomfortable undressing in front of you but will not be able to express it. As a result, the resident may become physically aggressive for lack of any other manner in which to respond to an uncomfortable situation.

5. Use your creativity in creating an environment that is conducive to the resident desiring to bathe rather than forcing the outcome.

6. There’s a reason that the ratio of care partners to residents is higher in a dementia community. Memory-impaired residents function best with care partners who are patient, creative, resourceful and, above all, appropriately trained in the finer points of caring for this very special population group.

Management teams in dementia environments are beginning to realize that efficient care should not be the objective in their communities. Once this becomes evident, management quickly sees the value of relational care. I am not oblivious to the demands of the bottom line. Having served as executive director for several dementia communities, I know the financial constraints.

But I learned early on that ROI is tied to occupancy and that census requirements are better met with better care practices. The reason is simple: Families will not settle for conventional eldercare practices for their loved one with dementia. These families want to see their loved ones having fun, enjoying some degree of fulfillment, experiencing a peaceful and calm lifestyle, and being able to thrive in a dignified and respectful residence. 

The communities that offer this level of care for their memory-impaired residents usually have full occupancy and a long waiting list.

When I managed a dementia community on the upper West Side of Manhattan several years ago, I was able to establish full occupancy within eight months of taking over and routinely maintained a waiting list of 17. I was able to accomplish this by using the very techniques I now teach to professional care partners. 

It’s not impossible for a growing list of healthcare organizations that have the courage and rationale to change the way they deliver care to this unique segment of our society.

It has taken nearly seven years to reach this feverish pace after an extended dormant period following the Wall Street implosion in 2008. Seniors housing was not as damaged by the financial turmoil as were commercial real estate and other parts of the economy, and it has proven advantageous in its recovery.

After years of sitting on the sidelines, lenders are once again actively engaged in the market, says Russ Dey, assistant vice president of Healthcare and Multifamily Finance for Walker & Dunlop.

“Competition is the word,” he says. “The seniors housing asset class has become more and more attractive to institutional capital as it continues to provide investors with competitive, risk-adjusted returns, at a higher going-in yield than other mainstream asset classes. This has translated into more capital chasing every deal from both an equity and debt standpoint, including lenders and developers that are new to the space.”

Similarly, F. Donald Kelly III, senior director of healthcare finance for CapitalSource, calls the current state of the capital market “aggressive,” and that competition for property acquisition has been “fierce,” citing a drop in acquisition cap rates based upon “in place” net operating income.

“Buyers are paying for upside a couple years into the future, which is concerning from a macro perspective,” Kelly says.

With memories of the 1999-2000 overdevelopment fallout still fresh 15 years later, investment pros have solid context on how vulnerable senior housing can be to irresponsible financing. And with the marketplace showing signs of a budding frenzy, their concerns are legitimate.

Not all financiers are worried about the sector reaching a boiling point yet, however. Michael Gehl, chief investment officer at Home & Health Care Finance, sees the investment rate as “stable” and that capital is “abundant” for facility operators who need it.

“If you look at the best data we have from NIC MAP, industry occupancy at assisted living facilities has been increasing from cyclical lows, and while there has been a pickup in new inventory, projections show absorption keeping pace with new inventory, creating a stable occupancy environment,” he says. “There are clearly markets where this is not the case, but generally speaking, the supply-demand relationship is a stable one.”

Favorable figures

With commercial banks, real estate investment trusts, private equity finance companies and commercial mortgage-backed securities firms along with public financing stalwarts HUD, Fannie Mae and Freddie Mac lining up to underwrite loans at low interest rates, “it could not be a better time to be a borrower” in the senior housing space, Gehl says.

Even with a growing amount of capital entering the space, the critical indicators in the market show no reason for alarm about overheating, Gehl says, pointing to the following:

• Occupancy levels — Citing NIC MAP data, the occupancy rate for assisted living facilities averaged 89.3%, which is 2.8% above its cyclical low. Those numbers show a strong demand for a needs-based product, but also a “recession-resistant” nature of the property, he says.

• Operational stability — Based on the Earnings Before Interest, Taxes, Depreciation, Amortization and Rent, assisted living margins have been “pretty consistent” in the 25% to 30% range, which is well within the confines of acceptability, Gehl says.

• Property development — Construction starts as a percentage of inventory in the assisted living space are in line with unit absorption, which indicates stability in the marketplace.

Overall, the seniors housing industry continues to experience incremental gains in average occupancy and rent growth, which Dey agrees indicates rational, positive performance for the market.

“There are a couple pockets around the country where new inventory is outpacing current absorption, but this shouldn’t impact the fundamentals too much in the long term,” he says. “It’s important to remember that the first baby boomers are only turning 69 this year, so the big wave of demand that everyone is anticipating is still a long way out when you consider the average age of a seniors housing resident is 82.”

Financing preferences

Different lenders have specific preferences in the types of projects they underwrite, but in general they are looking for a balance between need-driven services and private income sources, financial specialists say.

“Many lenders would prefer to finance properties where the predominant payer source is private pay for need-driven services due to the perceived stability this model provides,” Dey says. “Other lenders take the opposite view and would prefer a heavy Medicaid concentration in assisted living, provided the state is on solid financial footing.”

There are also some lenders who still prefer choice-based independent living due to the lack of operational risk associated with this care type, Dey explains.

“Over time, lenders for properties that offer higher acuity care will have to adapt to changing payer sources as ACOs become more prominent and the national healthcare delivery model continues to evolve.”

Researchers at the Cognitive Neurology and Alzheimer’s Disease Center at the Northwestern University Feinberg School of Medicine recently revealed their extensive study of memory-crisp seniors 80 and above are remarkably healthy and teeming with neuron-rich social intelligence. Some of the study participants had memories that were as good as those decades younger and with 90% fewer “tangles” than the brains of those with Alzheimer’s, scientists said.

The study, published in the Jan. 28 issue of Journal of Neuroscience, is reportedly the first to quantify brain differences of Super Agers and “normal” older people. 

Understanding the brain structure unique to Super Agers may help researchers decipher the genetic or molecular underpinnings that set them apart. It also could lead to new dementia-avoidance strategies and caregiving insights, experts say.

Super Agers were first identified in 2007 by scientists at Northwestern’s Cognitive Neurology and Alzheimer’s Disease Center at the Northwestern University Feinberg School of Medicine. 

Compared to other people of similar ages, Super Agers appear to enjoy three common advantages: a thicker region of the cortex; significantly fewer tangles (a primary marker of Alzheimer’s disease) and a large supply of a specific neuron — von Economo — linked to higher social intelligence.

“The brains of the Super Agers are either wired differently or have structural differences,” said Changiz Geula, study senior author and a research professor at the Cognitive Neurology and Alzheimer’s Disease Center. “It may be one factor, such as expression of a specific gene, or a combination of factors that offers protection.” 

“By studying their brains we can link the attributes of the living person to the underlying cellular features,” Gueula added. Most of the Super Ager participants planned to donate their brains to the study.

But developing a sound exit strategy doesn’t necessarily mean you’re actually planning to get out of the senior living business. It means you think it’s prudent to objectively evaluate your individual project or portfolio of properties to determine their true value and overall competitiveness, while identifying any potential weaknesses. Picture grooming your assets to get a very favorable response from a hypothetical buyer; it’s the acid test for financial viability and the best insurance for future survival, success and profitability.

NEGOTIATIONS LIKELY

Start by putting yourself in the shoes of a pragmatic buyer or cautious, risk averse lender. Factor in reality by answering these key questions for either individual communities or a consolidated portfolio: 1) How competitive would an objective third-party perceive your campus to be in two time frames: now, and over the next five years? 2) If a knowledgeable observer were scoring you and your competition on a scale of 1 to 10 for product, service, price and value, how would you measure up? 3) If you were on the other side of the negotiating table and about to purchase your community, what concerns would you have? 4) As a potential buyer of your community, are there any flaws or shortcomings that would require you to reduce your price? 5) Based on your answers to the first four questions, what should you change over the next 18 months? 

Both the for-profit and not-for-profit industry sectors could be in for major wake-up calls as product life cycles shorten, consumers become more demanding, and savvy competitors (with sound exit strategies) sharpen their operations and market-responsiveness.

Keeping up with the changing market also means investing constantly in such things as advanced computer software, best practices, training and education, and capital equipment. Whether you are a self-contained, internally operated for-profit or not-for-profit organization, charge your community a management fee of approximately 5 percent of net revenues. This won’t hurt your financial profile, as lenders expect to see such an assessment as a normal line item under operating expenses.

CAP RATE CONSIDERATIONS

The key value indicator for your community is your net operating income. As an exit strategy, a buyer will generally look at your community as an income-producing “black box.” In today’s market, these potential buyers (or lenders) are likely to value your community at the Net Operating Income (NOI) level using a capitalization rate of approximately 6.5% to 8.0%, depending on the primary living arrangement — independent living versus assisted living.  

SIMPLE RULE OF THUMB

This simple exit strategy rule of thumb for value indicates that using today’s cap rates, for every extra dollar of annual net operating income you realize, increases the value of your community by $15 or more. This can be accomplished by either enhancing revenues or decreasing expenses. Remember, cash flow is the “lifeblood” of your community; whether you are a for-profit having to answer to lenders and investors or a not-for-profit funding an ongoing charitable mission.

‘KNOW WHEN TO FOLD ‘EM’

There are many owner/operators who have not considered or do not realize that, all things considered, it might be appropriate to execute or at least plan an exit strategy.  Kenny Rogers’ advice in his classic country and western song — “You’ve got to know when to hold ’em and know when the fold ’em.” — is certainly sound advice for some senior housing sponsors and owner/operators. Sometimes your smartest move is to get out of the game. But whether you plan to fold your cards soon or hold them for a very long time, always having a sound exit strategy is your ace in the hole. 

A report from the General Accountability Office calls for greater oversight in senior living communities beyond skilled care settings.

Nearly a third of elderly dementia residents spending more than three months in nursing homes wind up taking the powerful drugs, GAO investigators found after combing through databases of the Medicare Part D prescription drug program. But a smaller yet no less disturbing number (14%) of dementia patients are also getting prescribed antipsychotics in home settings and assisted living facilities, the GAO noted.

The study found that while the drugs may be appropriately prescribed to address patients expressing agitation or delusions, they have been shown by the Food and Drug Administration to pose an increased risk of death in people suffering simultaneously from dementia and psychosis. 

Sen. Thomas Carper (D-DE) said the report shows that “many seniors with dementia are receiving risky mind-altering medications.” The GAO report acknowledges that HHS agencies already are addressing antipsychotic drug use by older adults in nursing homes under the auspices of the National Alzheimer’s Plan, but none of those efforts have been focused in settings like assisted living facilities.

Pain assessment blast 

Caregivers have no reliable means to gauge pain in dementia patients, university researchers maintain while calling for new methods to assess chronic pain in those populations.

While verbalizing experienced pain levels is the gold standard for caregiver assessments, no such standard exists for dementia patients, researchers in the United Kingdom and New York reported in the journal BMC Geriatrics.

Another smoking risk

Exposure to smoke from just one cigarette decreases blood flow to chronic wounds such as pressure ulcers, venous leg ulcers and diabetic foot ulcers. A new study shows the habit’s impact on healing is rarely discussed with patients. 

Researchers from The Ohio State University School of Nursing examined how smoking affects the wound healing process and found chronic wounds share common characteristics of inflammation and reduced blood flow that make them particularly susceptible to the approximately 4,000 toxic chemicals found in cigarette smoke.

“The deep skin wrinkling associated with chronic smoking is caused by chemicals that impact the production of collagen, a protein that is also critical to the wound repair process,” said Jodi McDaniel, Ph.D., CNP, a study co-author. 

For med substitution

Drug substitutions saved the government $13 million last year, but more drug substitutions under Medicare Part B would have saved an additional $6 million, the Office of Inspector General for Health and Human Services concluded in a recent report to Congress. 

Under the Centers for Medicare & Medicaid Services’ price substitution policy, 15 drug codes were subject to reimbursement reductions on the basis of data from 2013, according to an OIG report released February 27. 

“We estimate that if CMS had expanded its price substitution criteria to include drug codes with complete average manufacturer price data in a single quarter or certain codes with partial AMP [average manufacturer price] data, the agency could have generated almost $6 million in additional savings,” OIG authors noted.

New fasting benefits

Periods of fasting could be one way to sidestep some chronic illnesses such as diabetes, and add years to one’s life. Meanwhile, consecutive daily fasting supplemented with antioxidants could hinder those perceived benefits, University of Florida researchers said.

In a study published in the journal Rejuvenation Research, the group concluded that intermittent fasting caused a slight increase to SIRT 3, a well-known gene that promotes longevity and is involved in protective cell responses, said Harvard Medical School doctoral candidate Michael Guo. Such fasting also was found to lower insulin levels.

Screenings challenge 

British researchers warned that routine screening for abdominal aortic aneurysms in over-65 males may be doing more harm than good.

Detection rates for AAAs boomed after formal screening methodologies became commonplace in the 1980s, but they’ve done very little to prevent overall mortality rates, scientists argue in the British Medical Journal. 

What’s the catch?

Catching a weighted medicine ball can improve balance and could help prevent falls in the elderly, according to two studies from the University of Illinois at Chicago.

Principal Investigator Alexander Aruin, Ph.D., a professor of physical therapy, has been studying whether special training or exercises could enhance the kinds of anticipatory adjustments people typically make to help prevent falls. The elderly are less likely to anticipate falls and/or absorb jostling.

Aruin and his colleagues asked a group of healthy young adults to stand and catch a medicine ball. In a second study, they asked the same of a group of healthy older adults. The researchers measured the electrical activity of leg and trunk muscles to look for differences in the two age groups’ ability to make postural adjustments both before and after a single short training session.

Appearing at an educational session sponsored by the Capitol Hill Steering Committee on Telehealth and Healthcare Informatics were AHCA / NCAL members Rustan (Rusty) Williams, vice president and chief information officer of the Evangelical Lutheran Good Samaritan Society, based in Sioux Falls, SD; and Gary Kelso, president and CEO of Mission Health Services, Ogden, UT.

The session, titled “Adopting Information Technologies for Post-Acute and Long Term Care: Achieving Care Continuity,” provided a forum for experts to discuss the latest in health IT potential and issues in support of rapidly evolving payment mechanisms.

“Continuity among providers and payers in the delivery of care is the key to quality and efficiency,” said Mark Parkinson, president and CEO of NCAL. “Health information technology platforms that allow providers and payers to communicate and share data are essential to ensuring continuity of care and facilitating close relationships between health care delivery partners.”

Despite the lack of government incentives, providers need to find the resources necessary to implement modern electronic information systems. Health IT will be essential for new care delivery models — such as accountable care organizations — and for value-based payment approaches,” Parkinson said. “We are pleased to see our members speaking out in support of health IT and to encourage its adoption.”

Williams referenced Good Samaritan Society’s LivingWell@Home program that electronically monitors patient vitals and activities of daily living in the home. He explained that the systemic change required to implement a technology of this magnitude does not happen overnight.

“This is not a service we started looking at one or two years ago,” Williams says. “We’ve been developing this for over a decade, including several years of trial and error.”

Bill covers telehealth

In a move that could greatly expand the visibility and adoption of telehealth systems, Congress is proposing that Medicare reimburse telehealth services at the same rate as in-person medical visits.

Members of the House Energy and Commerce Committee’s subcommittee on Health began circulating a draft that would expand reimbursement for telehealth services that address unmet needs, substitute for an in-person visit, reduce hospital readmissions or enable a person to move to a “lower level of care.”

The draft leaves space for later versions to include more specific criteria for meeting these requirements.

Insurance coverage has been practically non-existent for telehealth services to date, but observers believe if Medicare starts offering coverage, private payers would follow.

Some commercial payers are already waking up to its potential, says Aaron Carlock, managing director for Chicago-based Huron Healthcare’s IT solution Vonlay.

GAO’s quality push

A new report to Congress casts significant doubts on the integrity and effectiveness of information systems many state Medicaid programs use to process claims, and CMS has agreed with it in its recommendation that they verify those systems when applying for Medicaid funds.

State Medicaid agencies should be required to measure and report to the federal government how well their electronic payment-integrity tools work, the Government Accountability Office concluded in its March 2 report.

“The effectiveness of the states’ use of the systems for program integrity purposes is not known,” GAO analysts noted, adding that CMS does not require states to measure or report quantifiable benefits achieved as a result of using the systems.

The GAO analyzed Medicaid management information systems in nine states and the Virgin Islands. Inspectors found a wide variety of IT systems to prevent and detect improper payments. Three state programs were working on MMIS platforms that were more than 20 years old. Seven had performed some kind of upgrade or implemented ancillary programs with data analytics and decision support features to review multiple claims and flag potentially fraudulent billing patterns.

Telemonitoring rebuff

Once touted as a viable, emerging cost-effective care option, telemedicine may not be the savior some forecast it to be, Mayo Clinic and Purdue University researchers concluded recently.

After examining the outcomes of 205 older adults with multiple chronic conditions who used conventional in-office and telemonitoring services, researchers concluded there were very little significant savings with telemonitoring. The results were published in the January issue of Telemedicine and eHealth.

The conventional group was able to access physician offices, home healthcare services and phone consultation while the telemedicine group transmitted data from vital sign devices and other kinds of devices to monitor things such as weight, glucose and blood pressure to clinicians.