The status was announced Jan. 2.

“The dedicated leadership of our two entities ensures not only the expansion of services for aging adults but also a commitment to excellence in healthcare and housing for everyone we serve,” Knute Nelson CEO Mark Anderson said in an online post. “We are also strategically positioning ourselves to grow our technological capabilities and broaden our mission of enhancing lives to reach more people across our geographical regions.”

Anderson became the new president and CEO of the newly joined entity effective Jan. 1. He had led Knute Nelson for almost 20 years. Scott Riddle, former Walker Methodist CEO, retired Dec. 31.

The merger will expand the services each company provides across an integrated continuum of care, including home- and community-based services, housing options and rehabilitation/skilled nursing.

The combined entity now provides services in more than 58 counties in Minnesota, North Dakota and Wisconsin, with a portfolio of 34 communities that offer assisted living, memory care, home healthcare, wellness, a therapy continuum and hospice care. 

Before the merger, Knute Nelson operated in 43 counties in Minnesota and eastern North Dakota, whereas Walker Methodist owned and managed 19 senior living communities in Minnesota and western Wisconsin.

Nursing home care spending grew by 7.8% for the same period, after having in September represented one of the fastest-growing categories of national health spending; spending on home care, on the other hand at that time, however, showed the slowest growth rate.

The Altarum brief expands on the official estimate of Medicare and Medicaid expenses in 2022, as reported by the Centers for Medicare & Medicaid Services in the January issue of the journal Health Affairs. Altarum expanded on CMS’ research to include data through October 2023.

Growth rates in both home care and nursing home care spending exceeded overall growth in national health expenditures in 2022, which was 4.1%, Altarum Fellow and Senior Researcher George Miller told the McKnight’s Business Daily.

Year-over-year prices for nursing home care grew by 5.1%; prices for home healthcare increased by 4.6%. 

“Both exceeded the overall growth in prices for healthcare, which was 3.1% in October, year over year,” Miller said. “Price growth in November was somewhat lower, at 4.3% for home healthcare and 4% for nursing homes, year over year, according to our HSEI estimates.”

Personal healthcare spending growth in October was 7.7%, year over year. That growth was driven by increased use rather than price increases, according to Altarum. 

Job growth

Meanwhile, in November, the healthcare sector added 76,800 jobs, tying July for most jobs added in a month over the past year, according to Altarum. Most of the increase came from ambulatory care settings, which collectively added 35,800 jobs, and hospitals, which added 23,700 jobs.

Employment in nursing and residential care facilities grew by 6.7% in November, year over year, “representing one of the highest growth rates among healthcare components,” however, Miller said. “Employment in home health care grew by 4.4% over the same period.”

Nursing and residential care facilities added 17,300 jobs in November. Nursing homes added 5,700 of those jobs, with other nursing and residential care settings adding 11,600 jobs.

Healthcare employment growth is showing signs of slowing, however, according to the latest Bureau of Labor Statistics data.

Wage growth in healthcare settings was highest in nursing and residential care, at 4.7% year over year in October, followed by hospitals at 4% and ambulatory care settings at 3.2%, according to the brief.

Home health agencies that do not have electronic health record systems in place are at a disadvantage, but many still lack this technology, according to a recent study published in the journal Home Health Care Management and Practice.

Among a sample of more than 1,500 Medicare home health providers, approximately 10% did not use EHRs. Some instead used paper and pencil for clinical documentation, whereas others explored other means of transmitting patients’ health information, such as by using telephone calls. EHR tools, however, were found to be the most effective, whereas the alternatives led to challenges for the providers and the patients they served.

Those challenges included operational and administrative slowdowns. Paper charting was found to be less efficient and more time-consuming than electronic means, and as a result, providers using those outdated means experienced more challenges coordinating care with patients’ other providers.

Those providers without EHR systems in place tended to be smaller, and were more often for-profit rather than nonprofit entities. Those without EHRs also had lower Star Ratings and weaker Home Health Consumer Assessment of Healthcare Providers and Systems scores, on average.

EHR advantages

Meanwhile, providers that use EHR systems were reportedly better able to monitor their patient population, more effectively coordinate care and collect data for quality improvement. They generally produced better health outcomes at lower costs, the study found. 

But those agencies still noted challenges that came with using EHR tools. For example, electronic health information platforms can be difficult for staff members to learn and use, the researchers noted. Some providers reported “ongoing difficulties and barriers” preventing effective use of EHR technology.

“These challenges may inadvertently lead to higher workloads due to the need to transcribe paper notes into the EHR and resolve HIT issues, which may decrease user satisfaction with the system,” the researchers wrote. “The switch to a new EHR system increased the time clinicians spent on charting, suggesting that there may be an initial learning curve associated with instituting new technology resulting in an initial increase in workload.”

Big investment

The process of adopting an EHR can be a challenge in and of itself, as selecting the appropriate electronic tool requires a large investment of time and money, according to the study. A highly fragmented market of EHR tools impedes healthcare interoperability, reducing efficiency and making care coordination harder, the researchers noted.

In related news, five EHR vendors entered the Trusted Exchange Framework and Common Agreement in a move that could advance efforts of creating interoperable patient data tools. Epic Nexus, Health Gorilla, KONZA and MedAllies and eHealth Exchange make up the first five qualified health information networks under TEFCA. They will be able to share patient data with providers using any other TEFCA-aligned EHR software.

What’s especially significant here is Judge Douglas L. Fleming Jr.’s searing words — and their unmistakable implication. Boiled down, he said that assisted living communities are not qualified to call themselves healthcare players.

His reasoning for such a rejection? Because senior living communities are not licensed as nursing homes or hospitals, nor do they employ licensed healthcare providers to “primarily” render healthcare services.

“One only has to look at the statutory distinction between an assisted living facility and nursing homes,” Fleming wrote. “[W]hile each facility renders healthcare services, only a nursing home primarily does so.”

Well, I guess that’s one way to kick a budding movement in the pants.

These days, fewer senior living communities simply describe themselves as a choice-driven, nonmedical setting for the aged.

Sure, maybe senior living (especially assisted living) might have aligned with that description a few decades ago. But times have changed.

Some assisted living settings now accept Medicaid payments (so much for the old private-pay-only requirement).

More notably, they no longer shy away from acknowledging the evident truth: healthcare is occurring within their walls.

Trade shows in recent years have showcased more operators proudly proclaiming to be healthcare providers. More than a few actively are competing against nursing homes (and to a lesser extent, home health settings) for residents being discharged from hospitals.

That’s why Judge Fleming’s ruling could become a real buzz kill.

Not only does the decision come as an eye opener; it also could give ammunition against the sector to at least two notable groups.

One is other plaintiffs who may believe that they were misled by marketing promises of more care than actually was delivered.

Another is nursing homes, which may believe that an unqualified — as in nonmedical — foe is unfairly restricting their access to people requiring post-acute care.

All of which could leave senior living operators with two obvious but uncomfortable choices.

One is to ramp up their medical care standards and pursue licensure.

The other is to revert to the official stance that healthcare is not really happening, despite overwhelming evidence to the contrary.

Care to pick your poison?

John O’Connor is editorial director for McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.

A subsidiary of The Pennant Group will manage the home health business of the Concord, CA-based John Muir Health Center under the terms of a joint venture announced Tuesday. The deal was effective Jan. 1.

The new business is called Muir Home Health and will provide home health services, including skilled nursing, physical occupational and speech therapy, home health aides and medical social work services, to patients throughout the San Francisco East Bay Region. Pennant Services Inc. is the majority owner and will provide operational and administrative support services for the venture.

“Muir Home Health will bring together the deep experience of one of the Bay Area’s premier health systems with Pennant’s deep experience in managing and supporting the delivery of life-changing home health services,” Pennant CEO Brent Guerisoli said Tuesday. “This collaboration will create a unique continuum of care that will benefit Bay Area residents for many years to come. …Muir Home Health is poised to hit the ground running.”

John Muir Health President and CEO Mike Thomas said his company chose Pennant because of the firm’s track record in home health.

“Our new joint venture will expand access to home healthcare in the area and enable deployment of care pathways, the latest protocols and best practices developed by Pennant through operation of its home health agencies nationwide,” he said.

Pennant said it will continue to pursue opportunities to acquire senior living, home health and hospice businesses throughout the United States, a sentiment that Guerisoli has shared on recent earnings calls. In the third quarter of 2023, the company announced that it had added two senior living communities, three home health agencies, three hospice agencies and two home care agencies.

Olga Yakusheva, PhD, from the University of Michigan School of Nursing in Ann Arbor, and colleagues examined how the association of nurse assessments of patients’ readiness for discharge with referral to HHC services at the time of hospital discharge differs by race and ethnic minority group. The analysis included data from 14,684 Medicare beneficiaries seen at 31 US hospitals.

The researchers found that adjusted Readiness for Hospital Discharge Scale (RHDS) scores were similar for non-Hispanic white (8.21), non-Hispanic Black (8.20), Hispanic (7.92) and other race/ethnicity patients (8.09). Among patients with low RHDS scores (≤6), non-Hispanic Black patients were less likely than non-Hispanic white patients to be discharged with an HHC referral (26.8 versus 32.6%).

“With Black patients, the difference in referral rates was observed against the combined backdrop of the elevated risk profile in addition to poor observed outcome of care,” Yakusheva said in a statement. “So, for Black patients, the observed data are consistent with a potential failure of the healthcare system to provide appropriate care.”

Abstract/Full Text

Brookdale Senior Living has sold the remaining 20% equity interest it held in its Health Care Services unconsolidated venture and received aggregate proceeds of approximately $27 million in the process, the Brentwood, TN-based company announced Wednesday. The company did not disclose the buyer.

The country’s largest senior living provider had announced in February 2021 that it was selling an 80% stake in Brookdale Health Care Services — a provider of home health, hospice and therapy services — to HCA Healthcare for $400 million. At the time of the announcement, BHS operated 57 home health agencies and 22 hospice agencies across 26 states, along with 84 outpatient therapy locations. 

Brookdale at the time said that the move was designed in part to position the company’s core senior housing operations for sustained growth. The sale was completed in July 2021.

In September 2021, LHC Group inked a deal to buy some Brookdale Health Care Services agencies from the HCA–Brookdale venture for an undisclosed price. The deal, which was finalized in November 2021, included 23 home health locations, 11 hospice and 13 therapy agencies across 22 states. LHC Group subsequently was acquired by UnitedHealth Group for $5.4 billion in a transaction that was finalized in February 2023, and the company now is part of UnitedHealth’s Optum diversified health services division.

Brookdale’s Wednesday announcement of the sale of its remaining 20% equity interest in the venture also included news of the completion of two other transactions to refinance all of the company’s remaining 2024 debt maturities:

• This month, Brookdale obtained a $180 million loan under a 2017 master credit facility agreement and secured the principal via non-recourse first mortgages on 47 communities. Those communities also continue to secure approximately $580 million of additional outstanding mortgages with a later maturity. The $180 million loan has a fixed interest rate of 5.97% and matures in 2031. The facility includes “borrow-up” provisions that the company expects will enable it to obtain additional funding in 2024 under the loan, based on the performance of the underlying communities. At the closing, Brookdale repaid $260 million of debt under the facility, which was scheduled to mature in 2024, using proceeds from the $180 million loan and cash on hand.
• Also this month, Brookdale amended its revolving credit agreement with Capital One to provide an expanded commitment of up to $100 million that can be drawn in cash or as letters of credit. The amount represents a $20 million increase from the previously existing commitment, according to Brookdale. The amended credit facility will mature in January 2027, and Brookdale has options to extend it to March 2028 and March 2029.

Brookdale said Wednesday that it also has “made significant progress on a financing transaction involving 11 of its currently unencumbered owned communities, which it expects to complete in the coming months.”

“We believe the positive strides we have made in 2023 are reflected in these completed financing transactions, which clear our debt maturities until 2025,” Brookdale Executive Vice President and Chief Financial Officer Dawn Kussow said in a statement. “The ongoing proactive management of our liquidity position, including these completed and pending transactions, together with Brookdale’s solid improvement in operating results, support our continued strong liquidity position.”

Spending for services provided at freestanding nursing homes and continuing care retirement communities, which represented 4% of overall spending, increased by 5.6% in 2022, to $191.3 billion, after reporting a 7.8% dip in spending in 2021.

“Nursing homes consist of a lot of Medicare and Medicaid spending, and we saw a decline in Medicare spending in 2021,” CMS Economist Ann Martin, a co-author of the report, said Wednesday during a press briefing held in conjunction with the release of the analysis. “Also, what’s really driving that dip in 2021 overall is the decline in other third-party payers and programs.”

The Medicaid program, out-of-pocket payments and Medicare reimbursements accounted for more than three-fourths of total payments to nursing homes and CCRCs and, in 2022, spending for those payers had strong growth following low growth or reduced spending in 2021.

Martin noted that nursing homes also received much pandemic relief in 2020 supplemental federal funding, which declined from $22 billion in 2020 to approximately $3 billion in 2021.

Most of the decline in nursing homes spending stems from that loss, she said.

Spending for services provided by freestanding home healthcare agencies increased 6% in 2022 to $132.9 billion, accelerating from growth of 0.3% in 2021, according to CMS. Private health insurance, out-of-pocket, and Medicaid home health spending contributed to the faster growth, whereas Medicare spending growth for home healthcare services slowed. Home healthcare-related spending represented 3% of overall spending.

Overall spending growth similar to pre-pandemic levels

“The [overall] 4.1% growth in 2022 was similar to the pre-pandemic average annual growth of 4.4% over the 2016 to 2019 period,” Micah Hartman, chief statistician at the CMS Office of the Actuary and lead author of the report, said during the press briefing. “The share of the economy devoted to health was 17.3%, lower for the second year in a row and down from the peak of 19.5% in 2020.”

He added that the 17.3% figure 2022 was more in line with the average from 2016 to 2019 of 17.5%.

Medicaid and private health insurance spending influenced the overall  growth in healthcare spending in 2022. 

“Medicaid spending increased 9.6% in 2022 after growth of 9.4% in 2021 and 9.3% in 2020,” the authors noted.

In 2022, total spending for private health insurance reached $1.3 trillion, which was approximately $71 billion, or 5.9% more than the amount spent in 2021, according to Martin.

“Private health insurance enrollment grew 1.5% in 2022, and this was the fastest growth in enrollment since 2015 and reflected increased enrollment in both marketplace plans and employer-sponsored insurance,” Martin said. “On a per-enrollee basis, spending for private health insurance increased 4.3% which was slower than the growth of 5.9% in 2021.”

She said the slower growth was due primarily to slower growth in per-enrollee spending for employer-sponsored private health insurance. 

According to Martin, Medicaid spending reached $805.7 billion in 2022, an increase of 9.6%. 

“This was approximately the same rate of growth as experienced in 2020 and 2021, and the third consecutive year of growth above 9%,” she added.