INVENTION BORN OF NECESSITY: THE PROVIDER-LED MEDICARE ADVANTAGE PLAN
EVALUATING AN ORGANIZATION’S ABILITY TO PROVIDE INSURANCE TO ITS RESIDENTS
In today’s changing environment, post-acute and long-term care providers face big challenges—increasing patient and resident acuity, workforce challenges, declining admissions, and lower Medicare Advantage rates. Providers are finding it hard to capture the value of their investments in technology, primary care, and care management capabilities when they are at the bottom of the healthcare food chain.
To capture the value created by reducing hospitalizations, some providers are becoming insurance providers for their long-stay residents. While developing an Institutional Special Needs Plan (I-SNP) can be an opportunity to gain control over delivery of healthcare to residents, it requires a strong understanding of risks and challenges and organizational discipline.
We analyzed one innovative provider’s readiness and ability to form and operate an I-SNP for its residents.
We analyzed opportunities for this provider to better capture the value of their investments in delivering improved patient care and outcomes. After confirming opportunities in this market, we conducted due diligence on the I-SNP model. This included determining the provider’s pool of eligible I-SNP residents and ability to hit enrollment targets and calculated its current hospitalization rates and ability to improve through care model implementation.
In addition to modeling financial success, we prepared our client for meetings with various stakeholders, including state regulators, administrative partners, potential health plan partners, and other providers who execute against strong models of care. Market dynamics play a critical role in forming an I-SNP, so we also assessed the provider’s relationships with physician groups, health plans, hospitals, and health systems to determine any risks associated with potentially competitive relationships.
Our analysis confirmed that unique attributes of the long-term care setting enable success under the I-SNP model. While we were able to confirm this provider’s advantages and strengths, challenges exist for any provider in forming a health plan. Organizations must be committed to pivoting their internal business and care models and to overcoming external challenges as well (e.g., maintaining network adequacy).