For the eight years that she led operations at Diversicare, Leslie Campbell was all-too-aware of the impact triple-net leases and rent escalation had on the public company’s facilities.
That’s one of the reasons she’s embraced real estate ownership in her current role as chief operating officer at Touchstone Communities, a growing skilled nursing provider based in San Antonio. Earlier this month, Touchstone acquired three skilled nursing facilities and a related assisted living community in a deal that brings the company’s total holdings to 31.
In all but four of those buildings — the Veterans Homes Touchstone operates for the state of Texas — Touchstone either owns the land or has an option to buy it.
“We have an overarching strategy to own our real estate, and that’s one of the guiding principles when we’re evaluating acquisition opportunities,” Campbell told McKnight’s Long-Term Care News last week. “You have more command about upkeep of the properties and are able to really build a brand consistent with the vision and in the standards that you’ve set for the organization.”
Campbell’s team worked for more than a year to acquire its latest properties, which she categorized as distressed. The four operations, officially purchased May 1, included Hill Country Heights, Indian Oaks Living Center and Rosewood Retirement Community, which has both SNF and AL buildings. They’re now operating under Touchstone’s Heights brand, which emphasizes the company’s intention to become the provider of choice and the employer of choice in a given market.
Though not a nonprofit, the company has strong Christian roots and is motivated by CEO Carl Fellbaum’s exaltation to “glorify God” in all the company does. The resulting commitment to stewardship is attractive to sellers and partners, Campbell said.
Still, Touchstone’s latest deal took more than a year to unfold.
“Timing is everything right and it just so happened that timing over a year ago wasn’t right,” she said. “As time passed, dynamics changed, the opportunity began to look a little bit different and when it actually came to fruition, we were the first choice because of our perseverance and patience and I think the demonstration of the ability to be a good steward, to be a quality provider in the state and just a good steward with assets.”
One way it proves that stewardship is through monthly measures monitoring using Centers for Medicare & Medicaid Services data. Campbell said that, among providers with density, Touchstone is the No. 1 ranked provider when considering Five-Star aggregate ratings.
“We leverage that with customers in a way that provides confidence that they’re placing their loved ones with a provider that, number one, understands quality, delivers quality and tracks quality,” she said. “And then it’s a big opportunity for us to leverage with payers, as payers are beginning to narrow their networks. They’re looking for quality providers and what better way to demonstrate that than with objective measures. It’s not about being boastful, but it’s about demonstrating ourselves as good stewards again and best in class providers of care.”
Aligning clinical outcomes with payment
The latest purchase brings the company’s total bed count to 3,981 and adds density in a new area of Texas. Within that expanding footprint, Campbell explained, Touchstone uses a largely centralized approach to meet federal regulations but hands over some control to local leaders on more local needs or issues.
“Those things are what enable us to grow quickly, to be very nimble without having undue organizational risk,” she said. “We look at, for instance, our skin system is the same across every community, our event-reporting system, things of that nature. … But there has to be some state specificity, so we expect and empower our local leaders to make those local decisions that are relevant to their member base, relevant to their market demand, relevant to their payers in the market. That’s where you begin to get clinical niche specialties. You begin to get scheduling practices that may look a little bit different in the central Texas market for instance than in the Rio Grande Valley.”
The company is rallying behind one systemwide initiative that it announced last fall: Touchstone formed an independent provider association with Longevity and Humana to offer residents an Institutional Special Needs Plan.
It launched this year, with plans for Touchstone to continue rolling it out at all of their facilities through 2025.
Campbell sees the venture as a way to get ahead of the continuing departure from Medicare fee-for-service coverage and to create more opportunities to add to existing clinical capabilities.
“We know by offering the I-SNP, we put ourselves at risk and when we do well and have great outcomes, we’re going to get paid more. When we don’t do as well and our outcomes aren’t as good, then we don’t get paid as much,” she said, noting that the motivation to exceed benchmarks is a win for residents.
“We believe that we have the opportunity to impact care with this model and then also, get paid for the quality results that we wouldn’t ordinarily get paid for,” she added.
With Longevity, Touchstone has added clinicians working alongside their own nurse practitioners and developing care pathways to address specific patient needs. The company also selected a new therapy provider to work, underscoring that therapy would play a bigger role in producing successful outcomes. The idea is to get therapists involved when a decline is detected, not just at admission or a new diagnosis. Campbell, a therapist by training, calls the new I-SNP supported approach “liberating.”
“Before there’s a problem, we’re intervening around some leading indicators to prevent problems in a much more economical fashion rather than scrambling to respond to problems in a less-economical fashion. How cool is that?” she asked. “We approached it much differently, taking a very hands-on role in developing the roadmap for success.”
Touchstone has also invested in wellness directors and other new positions and programs to streamline processes and better manage the company’s healthcare spend, shifting it to be proactive where possible. Better outcomes fueled by the I-SNP could also help the provider qualify for more Medicaid dollars under Texas’ new quality incentive payment model.
“It’s a good time to be creative with resources,” Campbell said.
