Affinity Pushes Innovation, Sees Assisted Living as Next Big Frontier for Value-Based Care

One of the largest senior living providers in the nation is making a push to also have the most innovative assisted living care model.

Hickory, North Carolina-based Affinity Living Group hired Dr. Kevin O’Neil as its chief medical officer (CMO) about eighteen months ago. O’Neil is no stranger to the senior living world. He served as CMO for the largest for-profit provider, Brookdale (NYSE: BKD), from 2006 to 2016. He then did a stint as CMO for one of the largest nonprofit providers, Ascension, before joining Affinity.

With Affinity, he is leading an effort to implement innovative care practices across a portfolio of nearly 160 communities, concentrated in the Southeast. Creating an “integrated care” model is a crucial part of Affinity’s overall strategy to position itself for success as assisted living begins to play a larger role in value-based care frameworks being pursued by major health systems and payers, O’Neil told Senior Housing News.

“Assisted living is considered the next big frontier in geriatric care,” he said.

While Affinity’s approach might not work for every senior living provider in the country, O’Neil does foresee the industry becoming “bifurcated” between providers that view themselves foremost as care providers versus those that stick to a hospitality-based approach. And he warns that giving short shrift to care will result in referral and occupancy challenges down the road.

Creating innovation hubs

O’Neil departed Brookdale when it became clear that innovation would be tough to pursue in the midst of the troubled integration with Emeritus, but he learned from experience what it takes to drive change across a sizable portfolio.

Trying one new approach at a time takes too long, so he’s building “innovation hubs” across Affinity’s various markets to pilot a variety of new approaches at once.

“Basically, what we’re doing is incubating multiple different care models simultaneously,” he said. “We figure out what’s working, what isn’t, fail fast and move forward.”

To create the hubs, O’Neil and his team are identifying a few communities with strong leadership and stable staffing. There, they assemble an innovation team that drafts a charter and identifies what its aims are, creating goals that are precise, measurable, feasible, and with a timeframe.

So far, a variety of new approaches are being tested. These include a fall prevention initiative and an effort to implement checklist-based protocols utilizing the INTERACT tool, similar to a project O’Neil led at Brookdale. 

Affinity has also updated its medication pass methods at two pilot communities that had a high rate of med errors. One change was to eliminate faxing of prescriptions, making that process entirely electronic. Inspired by health system Kaiser Permanente, which did something similar in California, Affinity worked with pharmacy provider Omincare to create special sashes for medication aides to wear during med pass.

These sashes indicate that the med aides are doing an important task and are not to be disturbed. Prior to wearing the sashes, the aides would get “deluged” with requests and questions from family members and other associates, leading to errors.

In the first three months after the sashes were introduced, med errors at the two pilot communities went down to zero. Furthermore, all of the med aides involved stayed on the job through that whole period. These are typically positions that turn over frequently, O’Neil noted.

The sashes helped them do their job more effectively and gave them a well-deserved sense of pride in the importance of what they do, he believes.

In addition to creating the innovation hub model, O’Neil is hiring a corps of medical directors. These are physicians who are skilled in geriatric care, who will each oversee about five communities to ensure high-quality care, as well as support and lead innovation efforts.

“They will basically be a force multiplier for me, actively engaged in each of these communities,” O’Neil said.

Even though he is focused on starting small with most innovations, O’Neil also has implemented some company-wide changes since coming on board. Notably, Affinity this year became the first assisted living provider in the nation to mandate the flu vaccine across its entire workforce. This required a huge communication effort to dispel misinformation about the dangers of vaccines, O’Neil said.

“We will lose a few [staff members] but not nearly as many as we thought we might have,” he said, crediting the education efforts.

Referral, payment benefits

Hiring medical directors and experimenting with multiple care innovations is not a cheap undertaking, O’Neil acknowledged. And Affinity is not a high-end provider operating with cushy margins.

The company’s model is enabled in large part by North Carolina’s Medicaid system, which allows for coverage of assisted living care. Affinity essentially collects rent from residents’ Social Security and taps Medicaid reimbursement for care services.

This model makes it all the more critical for the company to invest in care innovations, O’Neil said. Affinity is staking its future on being a provider of choice for health systems and payers.

The basic premise is that hospital systems and insurance companies — and hybrid “payvider” entities — increasingly have been incentivized to furnish value-based care. That is, rather than getting paid on a fee-for-service basis, their payments are tied more to keeping costs down and outcomes high for their patient or beneficiary populations.

In this environment, health systems and payers should increasingly see the value of assisted living communities as sites where many high-risk patients and beneficiaries reside. By fostering resident wellness and cutting down on expensive health care interventions, assisted living providers should win more referrals.

For O’Neil, the referral benefits of being a preferred provider are summed up in this stat that someone once shared with him: About 1 in 100 people convert to a move-in through a general marketing process, versus 1 in 3 that come to a community through the referral of a hospital, doctor, nurse or other health care professional.

Referrals are not the only potential benefit of having a robust assisted living care model — there is also the potential of earning financial upside from payers for keeping costs in check.

Like several other providers across the country, Affinity is actively pursuing options to enter into Medicare Advantage arrangements, with the ultimate goal being to take financial risk. That means the company would earn payments based on how much savings it drives to Medicare Advantage health insurance plans that it is affiliated with — although, it could also lose money should it fail to meet cost and quality benchmarks.

Medicare Advantage involvement should further bolster Affinity’s model not only through these potential risk-based payments, but by becoming a more important payer for services rendered in assisted living as the federal government continues to allow for more flexible benefits packages.

Affinity’s care model is not quite where it needs to be to take on risk, O’Neil said, but it’s in the cards as certain metrics such as hospitalization rates continue to improve.

Not every senior living company has a similar model as Affinity’s, but O’Neil does believe that pure-play hospitality models of assisted living will see their health system referrals dry up and could struggle to maintain competitiveness in the years ahead. He points not only to the rise of value-based care but to the acuity levels within assisted living, where residents are older than in the past, and multiple co-morbidities and cognitive impairment are commonplace.

Given these facts, he believes that every assisted living provider would do well to consider how they can blend social benefits with health benefits to create an “integrated model” in the vein of what Affinity is doing.

“I think we’re going to see those providers who get it,” O’Neil said. “… The reality is that most of our residents in assisted living are Medicare and/or Medicaid beneficiaries, and if I was a CMO of a hospital or CMO of managed care organization or an ACO, I’d be directing those residents to those providers are going to help me address the needs of that population.”

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