Therapy is big business today. Facilities can benefit by keeping an eye on the competition, while finding a market niche.
Therapy may be rehabilitating the image of long-term care. If you want to see how nursing homes have changed in the last few years, take a gander at their therapy programs.
Five years ago, a nursing home’s therapy program most likely was in-house, less specialized and geared to longer-stay residents.
Therapy shows a different side today: a boom in short-term residents, particularly those recovering from knee or hip surgery; sophisticated contract programs that make the most of the facility’s resources; and a strong emphasis on generating revenues.
In short, rehab today reflects a move toward short-term care, and away from long-term care.
“Today’s rehab in skilled nursing is much more focused on restoring functionality so the person can go home,” said Pat Henry, executive vice president of operations for RehabCare.
Capturing potential profits from the new therapy environment demands a new game plan. Just offering therapy no longer is an option; rather, a particular niche of therapy will set you apart and drive business. Tuning into the competition and being responsive to the needs of the community are also essential. And to compete successfully, facilities have to offer a solid program with a unified team made up of therapists, nurses and other staff.
Big bucks
Therapy is big business for nursing homes. Changes in regulations have created major financial incentives for skilled nursing facilities to invest in therapy like never before, experts contend.
New Resource Utilization Group (RUG) rules that went into effect in January have increased the number of categories. Facilities are getting more money for those residents who need both therapy and nursing care. By looking back at the nursing services that the resident required in the hospital before coming to the facility, the facility could place that resident in a new category and improve its reimbursement.
Another regulation that is pushing therapy into nursing homes is the 75% rule, which is gradually shifting the population of rehab patients from inpatient rehab facilities to long-term care facilities. The current target threshold of 60% will rise to 75% in July of 2008, though there are efforts to scale this back.
Shrinking Medicaid revenues also are indirectly boosting therapy in skilled nursing facilities because homes are relying more and more
on the revenue generated from Medicare.
Over the last few years, nursing homes have found ways to capitalize on the new regulations. Nursing homes are quickly becoming the place for recuperating from hip and knee surgery. The 75% rule is fueling a surge in short-term stays.
For example, Genesis Rehabilitation Services, a contract company and subsidiary of Genesis HealthCare, has leveraged the 75% rule to boost therapy profits. By the end of this year, it will have launched six units at skilled nursing facilities that are geared strictly for short-term stays. The units are set up apart from the rehab unit, with separate entrances and separate gyms. They also include customer service and concierge-type services that are more likely to be found at a hotel than a nursing home.
“We have taken the concept of a patient who needs a hip replacement … and are really treating the patient holistically,” said Lou Ann Soika, vice president of customer relations and strategic development for Genesis Rehab.
Nursing homes also are responding to a demand for short-term therapy services. The Los Angeles Jewish Home for the Aging, for example, is building a new state-of-the-art skilled nursing facility. Besides skilled nursing, it will offer a fitness center with an on-site trainer for group and individual classes. Currently there is a waiting list for short-stay and other residents.
“In this building, I think they’ll focus on providing the best rehab programs,” said Dr. Rick Smith, medical director for the facility.
Growing the business
The growth in therapy services requires that facilities treat their programs with a new level of sophistication, says Sean Maloney, senior vice president of clinical research development and training for RehabCare, a contract company based in St. Louis. That means knowing your audience, your mission and your goal.
“It’s big business,” she said. “It has to fall under the rubric of how one grows his business.”
Having a business means having a marketing program, knowing the competition and fostering relationships within the community.
“The reality is that most nursing homes are relatively constrained in how much they can grow their rehab program,” according to Brian Hatch, vice president of marketing for SYNERTX Rehab of Phoenix, AZ. “The number of nursing homes in their area, the relative ‘appeal’ of those nursing homes as compared to their own, and most importantly, the capabilities and priorities of nearby hospitals will determine the potential for any one facility.”
It’s always a good idea to establish a sound relationship with a nearby hospital, says Pat Henry of RehabCare. Because of the 75% rule, a discharge planner may be more likely to discharge to the SNF than the inpatient rehab unit.
Also, fostering a reputation as a SNF that offers good care but is more than a long-term care center will attract those otherwise healthy patients who need a place to recuperate after hip or knee surgery.
“They want to go somewhere that is active and has a good rehab place,” according to Henry. “The savvy nursing home operators are making that happen.”
Finding niches
In this new environment, niche is key, experts say. A therapy program can no longer afford to be everything to everybody, experts say. That may mean knowing your community of residents and what they need. Leigh Lachney, vice president of business development for Restore Therapy Services of Pelham, AL, suggests that skilled nursing facilities document the top five diagnoses for residents in the facility, such as osteoarthritis or Alzheimer’s. Based on those diagnoses, a facility should determine what special programs it needs to meet the needs of those residents.
“If you have Alzheimer’s, you need to make sure that nurses can care for those patients,” Lachney explained. “You might do that differently in a home that’s more acute care and is more concerned with hip fractures and knee replacements.”
“From a competitive edge standpoint, and to define yourself in your market location, you have to become more specialized,” added Sharon Prince-Moore, vice president of operations for Restore Therapy Services.
Because of the new RUGs categories, more facilities are trying to gain expertise in working with residents with cardiac and pulmonary needs, said Joe Bourne, president of Respiratory Health Services, of Towson, MD, which services facilities on the East coast.
“What we have seen is a real surge in facilities looking for increasing the competence level of their nursing staff, adding respiratory support and positioning themselves to take high pulmonary patients,” he said.
Teaming up
Rehab experts agree that the focus of a rehab program should be the residents. A good clinical rehab program will bring in revenues.
“If you develop good clinical products with good clinical outcomes, the money will come,” said Brian Pontolilo, president of Therapy Resources Management LLC (TRM), of Falls River, MA.
“We say understand that the byproduct is revenue, not the goal,” added Rob Watt’s, TRM’s vice president of business development. “If we can agree on a proficiency, if we are good at wound care, let’s make ourselves the wound care center of the area.”
A rehab program should be a team made up of therapists, nurses, dietary staff and other healthcare departments in the building.
“Communication between therapy and nursing, that makes a good therapy program,” said Jerry Yarnish, vice president of business development for PeopleFirst Rehabilitation, a subsidiary of Kindred Healthcare. “You can’t have nurses doing one thing and therapy doing another.”
Therapy has advanced beyond a slated time period during the day.
“When we look at rehab in skilled nursing facilities today, it is a much more sophisticated rehab program than we saw even five years ago,” said Henry of RehabCare. “A good program is one where both the rehab departments, nursing departments and every one else in the facility is on the same page, focused on good patient care.”
The Los Angeles Jewish Home for the Aging is planning to train certified nurse assistants to become restorative nurse assistants.
The purpose, said Haya Berci, the director of nursing, is “to maintain and continue to maintain” a level of therapy for the residents, she said.
Why outsource?
Boosting a therapy department can seem like an expensive endeavor, especially if a facility is thinking about hiring a contract company. But contract companies sell themselves as an investment.
“Therapy is still the best revenue generator in the facility,” said Jerry Yarnish of PeopleFirst Rehabilitation, a division of Kindred Healthcare. “Sometimes you want to cut therapy costs by a few cents, but it takes away from your bottom line. While contract therapy costs a few cents more, we’ll put more money on your bottom line .”
A contract company often offers a larger network of resources and is hooked into new clinical knowledge as well as government policy, he and other advocates say.
“As a therapy provider, we pride ourselves on knowing what’s going on with reimbursement,” Yarnish said.
A lack of therapists is yet another reason to turn to outsourcing, companies say. If a facility does not have enough on-call therapists, or has an inconsistent staff, “then you can actually do long-term harm to your reputation by marketing your program as ready for growth,” said Brian Hatch, vice president of marketing for
SYNERTX Rehab.
Still, not all contract companies are the same. Choosing the right one requires thoroughly knowing your therapy needs.
“The facility needs to look at the demographics and competitors in the marketplace,” said Leigh Lachney, vice president of business development for Restore Therapy Services. “Then they need to find out what their niche is to determine if contract therapy can meet that definition.”
Many rehab companies offer low Medicare A rates and high Medicare B rates, with most of their profits coming from Part B, Hatch cautioned. In these cases, a vendor may not be motivated in the growth of a facility’s Part A program because it could take away from Part B revenue.
“Instead, look for a contract that financially aligns your interests with theirs,” Hatch advises.
Elements of a sound rehab program
— Strong communication between therapists, nurses, dietary staff and administration, resident and family
— A competent, well-equipped staff of therapists
— A clear focus on the types of therapy being offered and the audience
— Awareness of the competition
— Resources to stay up-to-date on the latest clinical practices and regulatory guidelines
Source : McKnight’s Interviews with various long-term care rehabilitation service providers, 2006.
