Independent Long Term Care:Creating Consumer Choice and Cost Savings

Problem: Small percent of “high cost” individuals drive nation’s health care costs

• High-cost Medicaid enrollees (over $25,000 annual spending)

are 4% of all enrollees, 49% of all spending

• 49% are elderly and 43% are disabled.

• nursing homes or other long-term care represent 77% of cost attributable to elderly “high-cost enrollees” of Medicaid

Cost-Savings from Health Care Can Create the Revenue for a New

Model

1. Reduced hospitalizations (average price per hospitalization is $18,000)

2. Helping seniors avoid unnecessary nursing home stays ($66k-$95k/year costs)

3. More efficient delivery of community-based services

a) IHSS b) Adult Day Health c) Wellness/health promotion services

Case Study:Mission Creek Senior Community San Francisco

• Service-enriched independent living alternative to nursing home beds

• SF DPH pays $700/month subsidy for exclusive access to units

• $29,000 per capita annual savings to Medicaid and Medicare

Case Study:Mission Creek Senior Community San Francisco

• Mercy’s on-site team provides a holistic “blended” approach to services and property management

Service Coordination Health InterviewHealth Education Food banksPhysical Activity Well-being Checks Transition Plans Benefits Acquisition

• SF DPH also provides access to a roving team that can meet the “medical” needs of residents

Market Inefficiencies

• Medicaid will pay for skilled nursing or residential care facilities at three to four times the monthly cost of Mission Creek

• Medicare will pay 20X the daily cost of Mission Creek for hospital beds for patients that lack a home to be discharged to.

• Once the patient’s medical needs have been met, hospitals pay the cost of “housing” in their $1,000/night beds

Value Proposition:Estimated Total Costs & Savings

Net Savings

LTC Fee

Health care cost

$85k-100k

per year

Impact of Independent Long

Term Care

Pre-Intervention With Independent Long-Term Care

Ongoing

health cost

Factors that influence revenue potential

25% 50% 100% $-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Cost Savings Potential

Cost

Alignment / Access Control

Annual Medicaid Expense

Alignment:

Degree to which the residents are members, enrollees, patients of the health partner.

This is based in part on how access to the building is controlled.