The Sky is Not Falling for SNFs: Providers Thrive Even After 11.1% MedicareCuts
by CaringForward.com
We recently looked at how the 11.1 percent Medicare cuts from October 2011 affected top-3 U.S.SNF provider Kindred Healthcare. The short answer—probably not in the ways, or nearly to the extent, that you’ve read about in the press. But what about other major providers? At least among big public SNF companies, the sky seems securely in place. Although all providers cite the challenges posed by the Medicare cuts, have most reported positive financial results and outlooks, some quite remarkable. Let’s look at a few other financial filings for public SNFcompanies*:
Ensign Group (103 SNFs, based in Mission Viejo, California): Ensign opened its 2011 report citing the “unprecedented 11.1% reduction in Medicare rates to skilled nursing facilities,” but that was in reference to its “better-than-expected operating results.” “The fourth quarter marked the most daunting challenge to Ensign’s facility-centric leadership structure and operating model to date, and perhaps the best test of our flexibility, responsiveness and resilience that we will ever experience,” said Ensign CEO Christopher Christensen. Even with the calculated actual Medicare rate cut impact of 14% for Ensign (much higher than many SNFs likely encountered), facilities performed well. Christensen cited the fundamentals—improving census and skilled mix. “Our facilities were able to make up much of the loss in the form of increased skilled days, as our skilled mix continues to shift higher,” he said. We’ll say it again—the same things that made business sense for SNFs on Sept. 30, 2011 made sense on Oct. 1, 2011. The strategy and performance has carried over into 2012, with Ensign reporting record financials in Q1 2012. By the numbers for 2011:
2011 consolidated revenues up 16.7% to $758.3 million2011 net income climbed 17.6% to $47.7 million. Bullish on growth, acquiring six new SNFs in Q4For Q1 2012:
Record revenues of $202.2 million, up 10.5%Record EBITDA of $30.3 million, up 5.4% over Q4 2011 and an increase of 19.1% over Q42011Facility census was up 4.4% over Q1 2011 and by 1.7 percent over Q4 2011, too 83.6%, with Medicare days increasing by 3.6% over Q1 2011 National Healthcare Corporation (NHC, 75 SNFs, based in Murfreesboro, Tennessee): NHC seems to say only the minimum with its financial reporting, providing less management perspective than most of the other public SNFs. So we’ll jump right to the numbers:
2011:
Net income to shareholders up 25.8% to $55.4 million from $44 in 2010. Annual operating revenues up 7.3% to $773 million from $723 million Q4 2011 0perating revenues increased 0.5% to $192 million over Q4 2010, with net income for shareholders increasing by 12.2% (adjusted to exclude a one-time asset recovery gain from Q4 2010). Advocat/Diversicare (Est. 50 SNFs, based in Franklin, Tennessee): Advocat reports some interesting performance numbers, with its Medicare reimbursement rate increasing 11.9%, even with the 11.1% cuts effective October 1. That supports our analysis from last year that some providers could see average rates increase depending on case mix. “This rate increase is a direct reflection of our efforts to deliver high quality skilled nursing and rehabilitation services,” said Advocat CEO Kelly Gill. Some of the other numbers bear out strong top line growth for thecompany:
Revenues increased 8.5% over 2010, from $290 million to $314.7 millionSkilled census (Medicare and managed care) up 11.9% to 16.3% of total censusMedicare Part B revenues up $2.1 million Q4 2011 Highlights:
Overall census up 17% over Q4 2010. Revenue increased 3% over Q4 2010, to $77.8 million compared to $75.5 million. For Q1 2012, revenues were almost identical to Q1 2011, despite the Medicare cuts—$77.1million.
Even with healthy revenue measures, Advocat reported modest net losses in Q4 2011 and Q1 2012. Interestingly, CEO Gill cites several reasons for the losses, primarily related to strategic growth investments in facility remodeling, marketing and sales, and EHR implementation. Gill does not identify Medicare rate cuts as a reason for the losses. Skilled Healthcare Group (74SNFs, based in Foothill Ranch, California): Chairman and CEO Boyd Hendrickson commended his company’s ability to “focus on high quality patient care while navigating through dramatic changes to Medicare,” noting that Q4 performance remained strong and that the company has “been able to see results from our mitigation efforts more rapidly than we expected.” This positive performance reflected the following:
Revenue up 6% in 2011 to $869.7 million from $820.2 in 2010. Adjusted EBITDA up 8.1% to $131.3 million from $121.5 million. Skilled mix up 0.5% to 23.2 percent Skilled Healthcare Group did report overall losses, but similarly to Kindred, those losses were due to a one-time charge for impaired assets of about $270 million. So what does all this mean? Clearly, many major SNF providers are thriving, not just surviving, in the face of 11.1% Medicare cuts. Other nursing homes can emerge from self-imposed retreat from strategic projects and investments and start to reconsider the things they may have put on hold in September 2011. We close with links to the five recommendations from the “11.1% Survival Guide for SNFs,” perhaps more relevant now than when we first posted them back in October 2011:
Arm Yourself with the Right Tools for Battle: Outmaneuver Your Competitors While They Stand Still, Know Your Situation and Surroundings: Capture Business Intelligence to Support Smarter—And Bolder—Strategies, Master the Mix: Optimize Your Payer Mix—It’s More Important Than Ever, Replenish Your Resources: Focus on Generating Revenue to Overcome Reimbursement Cuts, Choose Fight Over Flight: Stay On Course with Sound Strategies, Especially for Sales and Marketing
Fatigue Tied to Landing in Hospital for COPD
By Todd Neale, Senior Staff Writer, MedPage TodayPublished: June 16, 2012Reviewed by Robert Jasmer, MD; Associate Clinical Professor of Medicine, University of California, SanFrancisco and Dorothy Caputo, MA, BSN, RN, Nurse Planner
Patients with chronic obstructive pulmonary disease (COPD) who report high levels of fatigue appear to be at increased risk for being hospitalized, a small Australian study showed. Compared with the one-third of patients that reported the least fatigue, those reporting the most had an 11-to 14-fold greater risk of being hospitalized within the next 20 months, Johanna Paddison, PhD, of Repatriation General Hospital in Adelaide, Australia, and colleagues reported online in European Respiratory Journal. Hospitalization “is itself an important driver of impaired qualityof life, negative impact on self and family, escalation of personal and societal costs, and ongoing instability and mortality,” they wrote. Behind dyspnea, fatigue is the second most common symptom among patients with COPD. But the clinical significance of fatigue in this patient population is unclear, according to the researchers. To explore the issue, they looked at data from 100 consecutive patients who were undergoing assessment before starting pulmonary rehabilitation. The average forced expiratory volume in 1 second (FEV1) — 53% of predicted –indicated moderate disease. Fatigue was measured using the Identity-Consequences Fatigue Scale, which assesses five domains:
Feelings of fatigue, Feelings of vigor, Impacts on concentration, Impacts on energy, Impacts on daily activities. The “fatigue experiences” summary score averages scores for the first three domains and the “fatigue impacts” summary score averages scores for the last two.
Fatigue was significantly associated with COPD severity, as measured by the BODE score,which incorporates body mass, level of airflow obstruction, disablement due to dyspnea, andexercise capacity. During a follow-up of 20 months, six patients died and 24 were hospitalized atleast once. Of those with a hospital stay, 58% were admitted more than once. Compared withpatients with the least amount of fatigue, those with the most fatigue were more likely to behospitalized during follow-up. That relationship was significant for both the fatigue experiencesscore (HR 11.4, 95% CI 2.6 to 50.5) and the fatigue impacts score (HR 13.6, 95% CI 2.5 to74.2). The researchers found that the average intensity of fatigue among the patients with COPDwas similar to that for patients with colorectal cancer and those with HIV. “The occurrence ofchronic inflammation that is common to these three situations may help to explain thisobservation,” the authors wrote. “Other common explanations may include fear and otherpsychological reactions to potentially or ultimately fatal diseases or factors such as sleepdisturbance and disruption to circadian rhythms.” They acknowledged some limitations of thestudy, including the inclusion of more symptomatic patients with COPD who were startingpulmonary rehabilitation and the lack of information on admissions to private hospitals or tohospitals other than the patients’ local tertiary centers. The results require replication, they added.
Lonely, Alone: Predictors of Poor Health
By John Gever, Senior Editor, MedPage TodayPublished: June 18, 2012Reviewed by Robert Jasmer, MD; Associate Clinical Professor of Medicine, University of California, SanFrancisco
Many older people living alone, or those just feeling lonely, are at heightened risk for death and disability, researchers said. Among nearly 45,000 individuals 45 and older either with or at risk for atherothrombosis, those living by themselves were at significantly higher risk for all-cause and cardiovascular mortality, according to investigators in the so-called REACH study. And in adifferent longitudinal study involving some 1,600 people 60 and older, those reporting feelings ofloneliness — irrespective of their actual household status — were about 60% more likely to experience declines in the ability to perform daily tasks (adjusted risk 1.59, 95% CI 1.23 to 2.07)and were 45% more likely to die (adjusted hazard ratio 1.45, 95% 1.11 to 1.88). Both studies were reported online in Archives of Internal Medicine. In an accompanying comment, two Yale University researchers cautioned that “social support” — presumably the thing missing from the lonely and the alone — is a squishy concept, especially as a contributor to improved health outcomes. Emily Bucholz, MPH, and Harlan Krumholz, MD, SM, of the Yale University School of Medicine, observed that neither of the new studies shed much light on mechanisms by which social support could help people stave off death and disability. They suggested that future research look more carefully at how social support is defined and measured — though, in the meantime, “scientists examining social support should build on studies such as those published in this issue and be challenged to investigate mechanisms as well as practical interventions,” Bucholz and Krumholz wrote. The REACH study (REduction of Atherothrombosis forContinued Health), reported by Deepak L. Bhatt, MD, MPH, of the VA Boston Healthcare System in Boston, and colleagues, was a registry project involving 44,573 people in 44 countries. Participants either had doctor-diagnosed cardiovascular disease or at least three risk factors for it and were followed for 4 years after recruitment. In this cohort were 8,594 individuals who reported that they lived alone. The raw data indicated that these participants had higher all-cause mortality (14.1% compared with 11.1% for participants with other household members, P<0.01)and cardiovascular death (8.6% versus 6.8%, P<0.01). Age appeared to mediate some but not all of this effect. Living alone was not a risk factor for mortality for those older than 80. But itremained significant for all-cause mortality in younger participants:
Age 45 to 65: adjusted hazard ratio 1.24 (95% CI 1.01 to 1.51)Age 66 to 80: adjusted HR 1.12 (95% CI 1.01 to 1.26)
Gender, race/ethnicity, and geography did not affect the associations between living alone and increased mortality. But curiously, employment status did. The increased risk of death among those living alone was mainly seen in those who were employed either part time (adjusted HR1.50, 95% CI 1.05 to 2.14) or full time (adjusted HR 1.56, 95% CI 1.07 to 2.27). In contrast, living alone did not make a difference in mortality among the retired, unemployed, and incapacitated — a finding for which Bhatt and colleagues offered no explanation. The other study examined 1,604 participants in a psychosocial portion of the Health and Retirement Study that began in 2002 with follow-up through 2008. It was reported in Archives of Internal Medicine by Carla M. Perissinotto, MD, MHS, of the University of California San Francisco, and colleagues. Mean age in the study was about 71. As part of this substudy, participants were asked three questions about feelings of loneliness (“left out,” “isolated,” or “lack companionship”). Those responding “some of the time” or “often” to any of these questions — 43% of the sample — were categorized as lonely. Only 27% of those considered lonely were living alone, the researchers noted. Loneliness was significantly associated with the following negative outcomes (expressedas adjusted risk ratios):
-Decline in activities of daily living: 1.59 (95% CI 1.23 to 2.07)-New difficulties with activities using the arms: 1.28 (95% CI 1.08 to 1.52)-Decline in mobility: 1.18 (95% CI 0.99 to 1.41)-More difficulty with climbing: 1.31 (95% CI 1.10 to 1.57)
When Perissinotto and colleagues treated loneliness as a scalable variable, depending on the frequency or number of different lonely feelings, they found that increasing loneliness was associated with increasing risk of disability. “On the basis of our findings, we hypothesize that health outcomes in older people may be improved by focusing on policies that promote social engagement and, more importantly, by helping elders develop and maintain satisfying interpersonal relationships,” the researchers wrote. “These findings suggest a need to look into interventions that explore strategies of mitigating loneliness, such as diverse living arrangements and telephone support.” Bucholz and Krumholz suggested that, to some extent, interventions maybe worthwhile simply because loneliness is unpleasant. “Loneliness is a negative feeling that would be worth addressing even if the condition had no health implications,” they wrote, even as they argued that more research is needed to validate the effectiveness of interventions.
Diabetes May Speed Cognitive Decline
By Kristina Fiore, Staff Writer, MedPage Today Published: June 18, 2012Reviewed by Dori F. Zaleznik, MD; Associate Clinical Professor of Medicine, Harvard Medical School, Boston and Dorothy Caputo, MA, BSN, RN, Nurse Planner
Having diabetes may put older patients on a faster path to cognitive impairment, researchers found. Over 9 years, those who had diabetes had significantly worse cognitive decline on two separate tests compared with those who didn’t have the disease (P=0.008 and P=0.001), Kristine Yaffe, MD, of the University of California San Francisco, and colleagues reported online in the Archives of Neurology. The findings suggest that preventing diabetes may help maintain cognitive function in older patients, the researchers said. To assess whether diabetes increases the risk of cognitive decline, and whether poor glucose control is associated with worse cognitive performance among elderly adults, Yaffe and colleagues conducted the prospective Health,Aging, and Body Composition (Health ABC) Study at two community clinics, totaling 3,069patients whose mean age was 74.2 at baseline. Patients completed the Modified Mini-Mental State Examination (3MS) and the Digit Symbol Substitution Test (DSST) at baseline and at certain intervals over the following 10 years. They also had their HbA1c levels measured at baseline, and 4, 6, and 10 years later. At baseline, 23.4% of patients had diabetes, and 159 people, or 5.2%, developed diabetes over the course of the study. The researchers found that at baseline, those with diabetes had significantly lower scores on both tests of cognitive function than those without the condition (P=0.001 for both), and adjusting for age, race, sex, and education didn’t change the results. After 9 years, Yaffe and colleagues saw greater cognitive decline among those who had diabetes at baseline than those who didn’t have diabetes (P=0.008for 3MS, P=0.001 for DSST), and the results remained the same in multivariate models. Patients who developed diabetes over the course of the study tended to score between the other two groups, but they weren’t statistically different from the group without diabetes, the researchers said. They also found that among patients who were diabetic at baseline, higher HbA1c levels were associated with lower mean cognitive scores. Over about 3.5 years, patients with a mid-range (7% to 8%) or high (8% or up) HbA1c level had significantly lower mean cognitive scores than those with a low level (7% or less) (P=0.003 for 3MS, P=0.04 for DSST). After adjustment, the findings remained significant for 3Ms scores, but not for DSST scores, theyreported. Yaffe and colleagues said the findings are consistent with prior studies, and suggest that the severity of diabetes may contribute to accelerated cognitive aging. Some of the mechanisms linking diabetes with cognitive decline include greater inflammation and microvascular disease, as well as the fact that patients with diabetes are at risk of renal disease, depression, stroke, hypertension, hyperlipidemia, and cardiovascular disease — all of which can impair cognitive performance. Thus, delaying or preventing the onset of diabetes may be beneficial formaintaining cognitive function in older adults, the researchers wrote. The study was limited by the small number of patients who developed diabetes over the course of the study, and by a lackof information on duration or severity of diabetes for patients with the condition at baseline.Other limitations included only two measures of cognitive function, small differences on the cognitive function tests between groups, and inability to evaluate HbA1c well over time due to use of different assays during different years. Still, the researchers said further studies are needed to determine whether early diagnosis and treatment of diabetes diminishes the risk of developing cognitive impairment.
Ventas Sells 12 Communities to Assisted Living Concepts for $100 Million
Alyssa Gerace | June 18, 2012
Healthcare real estate investment trust Ventas, Inc. (NYSE:VTR) announced on Monday that it has sold 12 senior housing communities to operator Assisted Living Concepts, Inc. (NYSE:ALC)for $100 million in cash. ALC had been the tenant for these communities. Its leases with Ventas were terminated at the transaction closing, and the REIT no longer owns any assets that ALC operates. With the lease termination, Ventas’s pending litigation against ALC for lease violation has been dismissed. “Ventas stands for excellence in seniors housing. This transaction allows ALC’s new chief executive officer and its Board of Directors to focus their attention and resources on providing quality care for its residents,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said in a statement. Ventas’s total annual base rent under its leases with ALC was about $7.2 million on a GAAP basis, and $6.6 million on a cash basis. The 12 communities sold to ALC had a total of 696 units in five states. The transaction terms included ALC paying for Ventas’s expenses incurred from the lawsuit.
NEWS FROM ABROAD………………………………
Care home nurses to be taught to play board games with dementia patients to stop them being prescribed chemical cosh
By Sophie Borland, London Daily Mail
Nurses in care homes will be taught to play board games with dementia patients to prevent thembeing prescribed anti-psychotic medication. Under a Government-backed scheme, they will be encouraged to help patients with hobbies such as baking and painting in the hope it will help their symptoms. It follows concerns that thousands of the elderly with dementia are being givendrugs to sedate them and stop them wandering off. Such drugs – dubbed a ‘chemical cosh’ –have been found to double the risk of death and actually worsen patients’ symptoms leaving them unable to walk or speak coherently. Over the next few month nurses in 150 care homes in the UK will be trained to care for patients as people, rather than just a condition. They will be taught tofind out what hobbies patients used to enjoy when they were younger and encouraging them to take part in the activites in the care home.
Read more:http://www.dailymail.co.uk/news/article-2160003/Care-home-nurses-taught-play-board-games-dementia-patients-stop-prescribed-chemical-cosh.html#ixzz1ySFwtSVw
Time to face up to reality of elder abuse
The Irish Times – Friday, June 15, 2012
TODAY MARKS World Elder Abuse Awareness Day. Elder abuse is a societal issue and can occur to any older person, regardless of social class, age or dependency, although increasing age increases risk. Like child protection and domestic violence, elder abuse remains a difficult topic, shrouded in secrecy, particularly as most abuse occurs within the home environment and by family members. Thus, disclosure is mired in issues of family allegiance, embarrassment, anxiety regarding legal entanglement and if the perpetrator is the main care-giver, forced admission to a nursing home may be a fear. Defining elder abuse is challenging but there is a professional consensus that it may be perpetrated in many ways, such as physical abuse, sexual abuse, psychological abuse, financial/material abuse and neglect. Separate research undertaken by the International Network for the Prevention of Elder Abuse, Age Action Ireland and research in both the UK and Sweden indicates elder abuse is perceived by older people themselves as being influenced by societal and political realities, as well as a lack of valuing of the individual olderperson. In this regard, ageist attitudes and practices certainly contribute to abuse of older people and its tolerance by society. One significant response to ageism is the ongoing United Nations focus on consolidating the rights of older people within a dedicated convention, similar to the1989 Convention on the Rights of the Child. This will underpin a clear focus on protecting olderpeople and ensuring equal rights with other age groups. But such a convention is needed now. There is no time for delay.
Read more:http://www.irishtimes.com/newspaper/opinion/2012/0615/1224317977647.html?goback=%2Egde_134913_member_124879507
BACK HOME………………
Oxygen Devices Recalled
By Cole Petrochko, Associate Staff Writer, MedPage TodayPublished: June 20, 2012
WASHINGTON — The FDA has issued a class I recall for several models of oxygen concentrators because of a potential fire hazard. A capacitor failure in the Nidek Medical Mark5Nuvo and Nuvo Lite may cause fire and loss of supplemental oxygen, according to a statement from manufacturer Nidek Medical Products. The recall affects devices manufactured and distributed from January 2004 to May 2010 and includes serial numbers 042-10000 to102-09335. A full list of the 11 affected device models is available in the recall notice. The company had not received any injury reports at the time of the recall. The concentrators are indicated to provide supplemental oxygen in a home setting and are not considered life-supportdevices. The manufacturer said it will supply replacement capacitors for affected devices.
