Interoperability can be a point of frustration for health care professionals considering the difficulties it can impose. If you’re not familiar with it, the term refers to the ability of various health care providers to collect and share patient information electronically through an electronic health record (EHR), also known as an electronic medical record (EMR). EMR also can refer to internal electronic records that are used for diagnostic purposes but not intended for distribution outside the private practice.
Buyer Type Activity in the Second Quarter
As I described in Part I of this two-part series on transactions volume in the second quarter of 2016, the decrease in transactions volume was due to a decrease in all buyer types: the public type (any publicly-traded company), the private type (not publicly traded, such as a private REIT, single owner, or partnership), and the institutional type (equity funds that manage pension money or other types of institutional money).
The public companies continued to remain quiet in the second quarter as public buyer volume stayed under $1 billion for the second quarter in a row. It was only the third quarter this happened in the past 10 quarters. The last time was back in the first quarter of 2014. The public buyer volume dropped 26% from $952 million in the first quarter of 2016 to $707 million in the second quarter of 2016. The volume dropped 87% when comparing to the second quarter of 2015.
The second quarter of 2016 marked a significant drop in volume for closed seniors housing and care property sales transactions. Volume in the second quarter registered $1.6 billion. That includes $1 billion in seniors housing and $600 million in nursing care. The total volume was down 61% from the previous quarter’s $4.3 billion and down 81% from the second quarter of 2015, when volume came in at $8.7 billion.
Although the volume decrease was more noticeable in the second quarter of 2016, the trend in decreased volume really started back in the third quarter of 2015, when the public buyers (namely, the publicly traded REITs) significantly decreased their activity. This time around, the private buyers (including private REITs) have joined the public side in remaining quiet. Part II of this blog, being released on August 17, will go into greater detail about the buyer types.
HCP Exec Previews Fall Conference Session
Amid increased competition and pressure to boost revenue, dynamic pricing strategies can help building operators capture dollars that might have otherwise been left on the table.
“We need to think differently as an industry about pricing,” said Kai Hsiao, executive vice president, senior housing asset management, HCP, Inc., a large REIT based in Irvine, Calif. “Operators who don’t, will be left behind.”
The first Friday of the month at 8:30 EDT is widely anticipated by market participants as the Labor Department presents a fresh gauge of the most recent economic performance in its release of the labor report for the prior month. Today’s number was even more closely watched since recent data releases on the economy (such as the second quarter GDP report that showed an expansion of only 1.2% at an annualized rate) suggest sluggish overall economic growth. The Federal Reserve will next meet on September 20 and 21 to assess the strength of the economy and decide if it should raise its benchmark interest rate. Last week, it decided to leave rates unchanged.
Managed care is an all-encompassing term that covers a variety of methods to pay for healthcare outside the norm of fee-for-service. Medicare Advantage (MA) plans are a form of managed care, as are Managed Medicaid plans. Accountable Care Organizations (ACOs) also fall under this umbrella. With the exception of MA, managed care is a relatively new idea in terms of health care financing. Generally, with managed care, payments flow through a risk-bearing third-party company to health care providers. The third party’s goal is to manage a patient’s total cost of care so that the total payment made by the third party is smaller than the initial bill. How this system is regulated is still evolving; CMS is committed to moving away from traditional fee-for-service payments, and managed care has a role to play in attaining that goal.
The burden of caring for a loved one has been in the news recently. Last year, AARP reported that in 2013, an estimated 40 million people acted as caregivers, assisting with at least one activity of daily living (ADL) and providing $470 billion in uncompensated care over 37 billion hours. That’s a sum greater than Belgium’s GDP in 2015. In fact, the total value of uncompensated care exceeded the total Medicare spend in that year by over $20 billion. And these figures don’t even begin to touch upon the emotional price of being a caregiver.
All Medicare-certified skilled nursing facilities are subject to the Five-Star Quality Rating System and Nursing Home Compare, which were established, implemented, and maintained by the Centers for Medicare and Medicaid (CMS). Both programs use metrics to judge the quality of skilled nursing properties. Nursing Home Compare is a website where consumers can gather information about quality metrics for every eligible skilled nursing property to use for comparison shopping. Most of the quality metrics displayed on Nursing Home Compare are used as part of the input to establish a skilled nursing property’s Five-Star rating, with five-star facilities considered the highest quality.
The second quarter 2016 data release marks another milestone for NIC and the NIC MAP® Data Service. With this release, we’re excited to officially launch our coverage of 41 additional metropolitan markets. The Additional Markets expand NIC MAP’s coverage from 99 to a total 140 metropolitan markets. Approximately 71% of U.S. households headed by someone age 75 and older are situated in these 140 markets.
Home health, which provides post-acute medical services directly in a patient’s home, increasingly plays two interesting roles in the post-acute industry: as skilled nursing competitor and potential ally. And as the Centers for Medicare and Medicaid (CMS) pushes for care coordination and value-based purchasing, skilled nursing providers increasingly are forming relationships with home health agencies.
As prospective competitors, home health agencies are seen as providing post-acute care at lower costs than long-term acute care hospitals or skilled nursing properties. As a result, hospitals and risk-bearing payors are incentivized to refer patients needing post-acute care directly to home health agencies, bypassing skilled nursing. When home health is viewed as a prospective ally, if the skilled nursing property is the risk-bearer in a bundled payment program, it, too, has an incentive to discharge patients to the lower-cost home health agency.