AHCA/NCAL 58th AnnualAHCA/NCAL 58th AnnualConvention and ExpositionConvention and Exposition

October 7-10, 2007October 7-10, 2007Boston, MABoston, MA

Effective Packaging of Effective Packaging of Personal Care Services in Personal Care Services in

Assisted LivingAssisted LivingNCAL Day – October 7, 2007NCAL Day – October 7, 2007

2:15-4:15 pm2:15-4:15 pm

Presenters Tom Melchior, Manager, LarsonAllen

Minneapolis, MN

Rosemary Brandt, RN, Assisted Living Nurse Consultant, Tealwood Care Centers

Bloomington, MN

Dennis Acrea, Senior Vice President, Benedictine Health System

Cambridge, MN

Susan Taylor, Vice President, Health Service Innovations

St. Paul, MN

Learning Outcomes

Understand the various approaches to service delivery and the pros and cons of each.

Learn how diverse organizations custom designed service packages to meet residents’ needs.

Recognize the revenue implications of flexible approaches to service delivery.

Introduction and Background

Assisted Living and the Senior Care Continuum

Types of Senior Housing

Few/no services Age-restricted townhomes & single-family homes,

for sale or rental; may be part of a campus Senior ownership, usually very limited services “Active adult” single or multi-family, own or rent

Housing with services Independent/congregate housing – some services

(i.e., meals, housekeeping) may be included in the rent or all services may be optional

Assisted living – basic services (meals, housekeeping) usually included in the rent; some also include personal care services in the rent (often the case with memory care); others have all personal care as an option

Assisted Living – Services and Housing

Variety of definitions of “Assisted Living” “Assisted Living” refers to housing AND

care The care can be delivered in a variety of

settings Key is that supportive services are

provided: Meals, housekeeping, laundry, supervision Assistance with ADL’s Possibly activities/socialization, transportation

Growth in Demand for Assisted Living

Persons Age 85+ 2.2 million in 1980 4.3 million in 2000 9.6 million in 2030 15.4 million in 2040

In 2004: 36,000 assisted living residences Serving 900,000 persons

Types of Services

Real Estate (the “Room” of “Room and board”) Housing unit (includes management,

building maintenance, etc.)

Basic Services Meals Housekeeping Laundry (may be provided as part of a

personal care package) Linen service (may be provided as part of

a personal care package)

Types of Services - Continued

Personal care - assistance with ADL’s/IADL’s ADL’s include: assistance with bathing,

dressing, toileting, etc.

IADL’s include: assistance with housekeeping, shopping, medication

Persons with dementia (memory loss) may have additional needs such as redirection or special needs related to behavior

3 Methods of Service Delivery

All-inclusive A la carte Packaged plans

Fixed-service packages Flexible-service packages Time-specific packages

Packages offered for services other than “room and board” (room and board includes housing, meals, housekeeping, activities, and transportation)

All-Inclusive

All personal care services, including escorts, medication management, etc. is included along with “room and board” (housing unit, meals, utilities) for one fixed monthly fee

Tends to attract very frail seniors, due to level of services provided

Usually applies to smaller units, typically studios and often in shared units

Costs typically $3,500 and up, typically $4,000+

A la Carte All personal care services provided on an

individual basis, “pay as you go,” billed monthly to the resident

Housing and meal costs (two to three meals per day) usually bundled, including utility costs

May provide the highest level of revenue, since “full price” attained for each service, but billing can be cumbersome

Services may be provided and charged 1) for each use (i.e., each medication reminder or per bathing assist) or 2) by time only (i.e., per 15-minute increment)

Packaged Plans

Most housing with services buildings provide services in packages; easier for residents/families to comprehend; easier for billing purposes

Packaged plans are a compromise between all-inclusive service plans and totally a la carte services

There are many ways service packages are organized. The categories of packages are: Fixed-service packages Flexible-service packages Time-specific packages

Fixed-Service Packages

Packages include specific services: package A consists of bathing assistance 2

times per week and one med reminder per day; package B consists of package A plus morning

and evening cares (dressing and grooming assistance) and 2 med reminders per day, etc.

Residents take the package that best meets their needs based on the services included

2 to 5 levels are usually offered (possibly more), 3 to 4 are typical

Often a resident can fit into one package with a limited a la carte service added to satisfy a specific need

Flexible-Service Packages

Resident’s care plan based on a staff evaluation; services are based on resident’s individual needs

A point system is used to determine fees This method provides the most individualized plan for

residents and relates costs to specific needs Billing is easy, since the cost falls into a specific

service level based on the point total 3 to 5 levels are typical, but some organizations have

8 or more The greater number of levels often relate to a higher

level of service provided (i.e., incontinence care) as well as more refined package distinctions

Time-Specific Packages

Services provided within specific blocks of time, i.e., one-half hour per day, one hour per day, etc. or perhaps by the amount of time per week required

Residents provided with whatever specific services needed within the time frame of the package… bathing assistance, dressing assistance, escorts, etc.

Medication reminders often provided separately

Costs determined based on time

PRE-ADMISSION ASSESSMENTThe Stepping Stone to Services

Why Do A Pre-Admission Assessment?

Services Needed/Wanted Services Available Facility Criteria Alternative Sources of Care

When Is The Assessment Done?

Prior to Admission Prior to Initiation of Services

How Is The Assessment Done?____________________________ Communication Observation

What Is Assessed?

Physical Status Functional Status Cognitive Status

Where Does the Assessment Take Place?______________________________________ Home Hospital Long Term Care Facility Other Senior Living Facility

Who Contributes To The Assessment?

Potential Tenant Family Members Facility Staff (if in another facility) Medical Personnel

What Tools Are Used In The Assessment?

Pre-Screening Questionnaire Mental Status Questionnaire Assessment for Self-Administration of

Medications

The Assessment

Home Environment Communication Personal Hygiene Needs Nutrition/Diet Needs Mobility Needs Elimination Needs Mental Needs

The Assessment - continued

Physical Needs Social Support Needs Medications Vulnerability

Service Charges Based on Assessment

Ala CartePay only for services needed/wanted

Determination of cost

Based on regionTime needed to complete task

Packaged Services

Memory Care

Three Levels

All-inclusive

Incidental Charges

Based on time involved

Non-scheduled services

Tenant requested

Case Study

83 year old gentleman Recently widowed Lives at home Daughter lives in area Very supportive family

Case Study - continued

House in disarray Urine odor Wheelchair folded up in corner Difficulty hearing Cat

Case Study - continued

Incontinent care Bathing assist Medication assist Assistance with hearing aid

Assisted Living Service Packages – Alternative Plans

AHCA Annual Convention and Exposition - 2007

Key Elements of Success

Management is up to the task Ability to project revenues and expenses Know operating efficiencies Clear value for monthly service fee(s) Careful monitoring of Aging in Place Active monitoring of resident profile Tracking Local Occupancies of Assisted Living Up-to-date data regarding service delivery

models Integration with referral sources/spectrum providers

Physical Location of the Facility

Attached to an existing SNF

Stand alone facility, on-site of SNF

Stand alone facility, off-site

6.03

CASE STUDY - Metro

29 Independent Living Units

30 Assisted Living Units

Assessment MethodologyI. Care Management Care management related to health or psychosocial needs, includes communications with physician or other health care professionals and relaying information to the resident &/or responsible party, coordinating orders, lab work, follow-up, scheduling, and/or transportation arrangements. No need for staff involvement Staff to intercede regarding health care with responsible party &/or physician 1-2 times per year Staff to intercede regarding health care with responsible party &/or physician 3-4 times per year Staff to intercede regarding health care with responsible party &/or physician almost monthly Staff to intercede regarding health care with responsible party &/or physician almost weekly Staff to intercede regarding health care with responsible party &/or physician almost daily II. Behavioral Support

Need for support or intervention due to mental health concerns, anxiety, depression, or with personal interactions. No evidence of need for behavioral support Occasional need for behavioral support (1-4x wkly) Frequent need for behavioral support (5 or more x wkly) Extensive need for behavioral support (more than daily)

Assessment Methodology – continuedIII. Cognition/Orientation

Deficit Areas: 1.Minor forgetfulness; 2.Short attention span; 3.Difficulty processing & organizing information; 4.Not always able to make informed decisions; 5.Needs occassional reminders/cues; 6.Easily confused Is oriented. No cognitive deficits. Aware of surroundings. Occasional deficit: has 1-2 of the above deficit areas Partial deficit: has 3-4 of the above deficit areas Moderate deficit: has more that 4 of the above deficit areas Confused and/or disoriented much of the time, needs staff monitoring during waking hours

Confused and/or disoriented much of the time, needs additional staff monitoring during night time hours IV. Medication Management - includes eye drops, inhalers, etc. Independent with Medication Management if any Weekly medication set-up

Medication Assistance up to 3x daily

Medication Assistance up to 6x daily Medication Assistance more than 6x daily

Assessment Methodology – continuedV. Mobility Independent in all mobility, with or without assist device Needs occasional reminders/cues/safety instructions 1-2x wkly

Needs stand by assist with frequent verbal reminders or occasional hands on by 1 staff membor for technique or support Is dependent, needs one person assist for transfers and/or safe mobility VI. Stability/Falls Does not fall (0-1x a year) Rarely falls, less than 3x a year (2-3x a year) Occasionally falls, 3 to 6 times a year (4-6x a year) Falls frequently, more than 6 times a year VII. Bathing

Independent in scheduling or using shower/tub, control water, get in/out, obtain/replace necessary bathing items w/o assist

May need reminders/cues to bathe. Or needs assistance of 1 shower or tub, control water, get in/out, obtain/replace bathing items. Or hands on assist of 1 with washing back and/or lower legs. Aide may leave room. Stand by of 1 while resident bathes independently. Aide does not leave room. No hands on assist. Stand by of 1 and assist with partial bathing. Aide does not leave room. Staff of 1 provides total bathing. Lengthy bathing assist required or tub bath or requires more than 2 showers a week.

Assessment Methodology – continued

VIII. Dressing Able to dress/undress independently Needs occasional reminders to dress/undress, change clothes, fasten/unfasten clothing Needs frequent assist in selecting clothing, minor assist with buttons/shoes, etc. Requires assist in dressing and/or undressing upper OR lower body Requires assist in dressing and/or undressing upper AND lower body Requires staff to dress/undress more than daily Needs assist with TED hose IX. Grooming

Grooming tasks: 1.Wash face, 2.Comb hair, 3.Brush teeth, 4.Shave, 5.Apply deoderant, 6.Clean/care for fingernails, 7.Clean/care for toenails, 8.Clean/responsible for own dentures. Independent with grooming Requires occasional reminder to initiate any grooming task Requires staff intervention for set up/cues/ or assist with 1 or 2 of the 8 Requires staff intervention for set up/cues/ or assist with 3 or 4 of the 8 Requires staff intervention for set up/cues/ or assist with 5 or 6 of the 8

Totally dependent for grooming needs which may involve set up/cues or assist with more than 6 grooming tasks

Assessment Methodology – continued

X. Toileting (Incontinence products to be provided by tenant) Independent with toileting needs

Needs occasional reminders or assistance with hygiene, toileting, or to change incontinent products (weekly or less) Needs regular assistance with incontinence management* XI. Eating (Score all applicable items) No special diet and independent at meals Special diet required Special diet teaching or reminders from staff regarding diet benefits or to increase fluid intake Needs thickened liquids

Needs assist from staff to cut up food, butter/bread, open cartons, arrange or locate food or to provide supplement

Package Plan Methodology

Heavily dependent on relationship with clients and families

Easy to Explain No surprise bill Consumer friendly Assessment tracks increased services Allows negotiated risk Staff has flexibility

Personal Care Package A

Our Monthly Service Fee provides you with a base of support which includes our Personal Care Package A:

Noon Meal 24-Hour onsite staff 24-Hour emergency response system Weekly light housekeeping Activities and Spiritual programs Scheduled shopping transportation

Personal Care Package B

Daily Continental Breakfast & Supper

Weekly Bed and Bath Laundry Service

24-hour emergency call system response – up to 3 times per month –

($5.00/additional call)

Daily Wellness Check

Personal Care Package C All the services in Personal Care

Packages A, B and…. Personal Laundry Service–pickup, wash,

dry, fold and deliver up to 3 loads per week (does not include dry cleaning).

24-hour emergency call system response - up to 5 times per month -($5.00/additional call)

Personalized service plan with staff assistance in the areas indicated in our assessment.

Personal Care Package D

All the services in Personal Care Packages A, B, C and …

24-hour emergency system response - up to 10 times per month – ($5.00/additional call)

Medication Assistance - up to 3 reminders per day

Personalized service plan with staff assistance in the areas indicated in our assessment.

Personal Care Package E

All the services in Personal Care Packages above and…

24-hour emergency call system response - up to 15 times per month –($5.00/additional call)

Weekly Medication Set up Medication Assistance – up to 6

reminders per day Personalized service plan with staff

assistance in the areas indicated in our assessment.

Personal Care Package G All the services in packages above as

needed and… 24 – Hour Emergency Call System

Response as needed Daily Confusion Management – providing

escorts, cueing and reminders for those who require regular daily assistance and oversight

Daily Incontinence Management (tenant must provide any needed incontinence products)

Personalized service plan with staff assistance in the areas indicated in our assessment

Triggers to Higher Levels of Service Plans

ADL Assessment Non-scheduled ADL Assist Medication Management Medical Monitoring Escorts and cueing due to cognitive

needs Wander Alert Door Monitoring

Continued Stay Criteria

Able to function safely and appropriately Performs ADL with available assistance Feeds self or needs minimal assistance Mobility with devices or available

assistance Manages continence w/ available

assistance Does not endanger self or others Behaviors managed w/ available

assistance

Staffing Assumptions

o 1998 Staffing 8.00 FTE P C A 1.00 FTE RN 1.00 FTE LPN 0.50 FTE Housekeeping 0.50 FTE Maintenance 1.00 FTE Manager 12.00 FTE Total

2007 Staffing 8.88 FTE 1.40 FTE 0 1.43 FTE .50 FTE 1.00 FTE 13.21 FTE Total

Key Elements of Success Management is up to the task Ability to project revenues and expenses Know operating efficiencies Clear value for monthly service fee(s) Careful monitoring of Aging in Place Active monitoring of resident profile Tracking Local Occupancies of Assisted

Living Up-to-date data regarding service

delivery models Integration with referral sources/spectrum providers

Break in the Action

Pros and Cons of the Three Methods ofService Delivery

All-inclusive

A la carte

Package plans

All-Inclusive

Apartment, utilities, meals, building amenities and personal care services included

Is based on assessment and service plan but staff are “free to go” with providing assistance as needed

Is easy to administer and bill for Difficult to sell as it appears expensive

compared to other approaches Difficult to sell because people believe

they will not use all of the services

A la Carte Apartment, utilities, building amenities,

some meals, some services (i.e. housekeeping) included

Additional services are offered on a fee-for-service basis as determined by the assessment

Can be based on per service (i.e. med admin), and/or time (i.e. nursing care)

Requires staff training in documentation Requires clear communication with

resident/family members

A la Carte - continued

Difficult to sell as family members often underestimate the time/work involved in delivering the service (i.e. laundry)

Difficult to accurately account for all services; dependent on well trained staff and use of software

Package Plans

Includes apartment, utilities, meals, base level of services (i.e. housekeeping and laundry)

Based on assessment, typically using a point system

Points add up to levels of care and priced accordingly

Can be difficult to sell as not all services in a package are seen as needed

Easily administered for service delivery and billing

Marketing Strategies

Consider your market position: what is your competitive advantage in using a particular approach?

Consider your pricing position: do you appear to be the most or least expensive?

Can potential residents/family members easily compare? You may want to do it for them!

Marketing Strategies

If you are All-Inclusive

Emphasize that they will know exactly what they are getting and will be paying for.

No surprises!

“Mom will get everything she needs and you won’t be bothered with the details.”

Marketing Strategies

If you are A la Carte

Emphasize the assessment process

Constant communication with resident and family on changing health care needs

Teach staff to “up sell” when interacting with residents and family members

Marketing Strategies

If you offer Packages

Emphasize the assessment process

Suggest that although not all services are needed now, they may be and no additional charges will be made

Again, “no surprises” in billing

Marketing Strategies

Other suggestions from the audience:

If Change is Needed

Reason for change

Current system is not capturing all costs (most often seen in A la Carte)

Aging in place or greater assistance needed

Target market doesn’t understand (constantly compared to competitors who have other advantages: newer building)

If Change is Needed

Communicate, communicate, communicate

With current residents/family members (grandmother people in)

With staff With public Change all

marketing/leasing/assessment materials

Tips to Remember

Whatever you say you will do, do it Follow your admissions and discharge

criteria Be willing to be flexible if someone

“doesn’t fit” Develop an approach that works for you

Philosophically Market demand changes Staff can understand and manage it Change it if it doesn’t work

Financial Implications – Example 1

All Inclusive - $4,000 per month $2,500/month housing and basic services $1,500/month for all services 40 residents x $1,500 = $60,000 x 12 months =

$720,000 What are the care needs of your residents? Not

all will need the full level of services provided If fees are not set to equal the full level of

services, some residents with lower care needs may be subsidizing others with higher care needs

Financial Implications – Example 2

Bundled Packages (equal number of residents utilizing each package) 10 residents x $1,500 = $15,000 x 12 months

= $180,000 10 residents x $1,000 = $10,000 x 12 months

= $ 120,000 10 residents x $ 600 = $ 6,000 x 12 months

= $ 72,000 10 residents x $ 300 = $ 3,000 x 12 months

= $ 36,000 $408,000 TOTAL

Financial Implications – Example 3

Bundled Packages (different number of residents utilizing each package) 5 residents x $1,500 = $ 7,500 x 12 months

= $ 90,000 5 residents x $1,000 = $ 5,000 x 12 months

= $ 60,000 10 residents x $ 600 = $ 6,000 x 12 months

= $ 72,000 20 residents x $ 300 = $ 6,000 x 12 months

= $ 72,000 $294,000 TOTAL

Revenue Summary

Revenue: Example 1: All inclusive - $ 720,000 Example 2: Bundled packages - $ 408,000 Example 3: Bundled packages - $ 294,000 A la Carte: ? ? ? Expense: Expenses based primarily on staffing levels What level of staffing will be required to

meet the care needs of residents? A la Carte “most efficient”

Financial Considerations

If time or point systems used, expense will increase within a package plan until resident “jumps” into the next package level

Market or operational considerations may have a greater influence over package types than revenue/ expense considerations.

Presenters’ Contact Information

Tom Melchior, Manager, LarsonAllen tmelchior@larsonallen.com 612/376-4705

Rosemary Brandt, Assisted Living Nurse Consultant, Tealwood Care Centers rosemary.brandt@tealwoodcc.com 612/916-6078

Dennis Acrea, Senior VP, Benedictine Health System, dacrea@bhshealth.org 763/689-1162

Susan Taylor, VP, Health Service Innovations staylor@healthserviceinnovations.com

651/674-0654

Effective Packaging of Personal Care Effective Packaging of Personal Care Services in Assisted LivingServices in Assisted Living

NCAL Day – October 7, 2007NCAL Day – October 7, 20072:15-4:15 pm2:15-4:15 pm

Questions???Questions???