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How to reposition dated LTC assets

February 5, 2013
by Randy Bremhorst and Chad Ulman, AIA, LEED AP
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Ensuring that our long-term care (LTC) facilities do not become a thing of the past requires careful consideration and monitoring of industry trends, an understanding of cultural changes, and a willingness to shift positions, mindsets, employees and assets. Facilities once considered cutting edge often become outdated or antiquated, requiring re-evaluation to determine how to maintain their relevance in a changing marketplace.  

Lutheran Life Communities (LLC), an Illinois-based senior living organization, has a mission to empower vibrant, grace-filled living across all generations. LLC serves individuals of all faiths, strives to design superior programs and exceptional care, and trains its staff to provide a very high level of personal attention for each resident. But age has a way of removing the luster, and LLC’s Lutheran Home in Arlington Heights, Ill., was experiencing just that. Once the catalyst for their growth as a major senior living system, Lutheran Home was becoming an aged asset and was limited in its ability to respond to customer expectations. LLC’s leadership realized the facility had reached a crossroads, and that its future hung in the balance.

What followed was critical scrutiny of Lutheran Home and the ever-evolving senior living market. LLC’s leaders needed to develop strategies to win clients and respect in this competitive arena.

The dialogue grappled with some tough questions:

  • What do we need to do to compete effectively and to serve older adults better in the community?
  • What are the capital requirements for competing in the marketplace?
  • What is the best strategy to secure and sustain the premier position for senior services in the local market?
  • What are the likely financial, clinical, organizational, operational and cultural consequences of actions taken?
  • What is the right solution for us?

LLC’s leadership decided that the ideal solution was to reposition Lutheran Homes’ skilled nursing facility, Olson Pavilion. Providing a reconfigured and expanded footprint, the renovation would transform the existing 252 beds with shared toilet rooms into 162 private rooms with private baths. The plans also included a new transitional care, 78-resident room addition, which will connect to Olson Pavilion, along with a single-story addition to accommodate expanded resident wellness and therapy programming.

LLC’s solution centered on an operational and design shift from the “resident-for-life” mentality to the concept of a short stay in a hospitality setting. This mindset and direction signaled the beginning of transitional care on the Lutheran Home Campus, offering the latest in healthcare innovation for its residents.

WHAT CHANGED?

In recent years, healthcare reform has had some level of impact on nearly every business in America. These changes, coupled with changes in the traditional healthcare model, have impacted the LTC industry dramatically. The custodial care model was the backbone of the industry for many years. But now, rehab-oriented post-acute care is growing significantly because of advances in medicine, alterations in Medicare Part A and changes in the demographics and mindset of our society.

These changes have created a sizable opportunity for those who seek to capture this market by focusing on the replacement of hips, knees or shoulders—especially among baby boomers. Many hospitals no longer consider it cost-effective to provide the rehabilitation needed after these surgeries. It is in the best interest of these hospitals to form partnerships with skilled nursing facilities they trust. Additionally, recent healthcare reform has implemented penalties for hospitals based on readmissions, increasing the need for reliable allies.

PARTNERSHIPS REQUIRE CULTURAL EXAMINATION

Relationships are more important than ever as LTC providers seize the opportunity to partner with hospitals and other healthcare entities. Many patients will begin their journey in one setting for their medical procedure before moving to another to heal, recover and participate in their rehabilitation. Patients will rate their rehab experience based on their overall success and wellness, and both hospitals and LTC facilities will play a critical role.

While exploring the idea of partnering, it is critical that the two organizations understand each other’s business cultures. In many cases, the healthcare industry has very patient-centric, mission-driven non-profit organizations coexisting with for-profit institutions. While both care about patients and watch the bottom line, how those cultures are carried through the multitude of decisions that must be made—both business and medical—can vary greatly. The mission and values of the two entities must be discussed, evaluated and ultimately respected for a strong and consistent partnership that effectively serves the needs of the patients. Potential partners also should discuss their differences, define each entity’s roles and responsibilities and discuss likely scenarios and how to handle them.

If LTC providers choose not to form recognized partnerships, they will want to be certain to connect and network with the hospital discharge planners to ensure the successful ongoing care of patients with post-acute needs. As nursing homes further develop in the market, they will likely differentiate themselves by specializing in rehabilitative services, physical therapy or sizable rehab gyms with both quality staff and equipment. Some providers are likely to focus on certain acute-care conditions, like stroke or heart rehab, while others will likely specialize in caring for those recovering from orthopedic procedures.

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