At length with Larry Minnix: ACOs, false economies, and Paul Ryan’s budget

At a press briefing this afternoon during the LeadingAge (formerly AAHSA) Future of Aging Services Conference in Washington, D.C., association president Larry Minnix said that this year’s show had the most registrants in a few years—close to 1,000—because people are really engaged in the

Larry Minnix

political discussion.”

“We’re incensed about it all, and at the same time know we have to have those discussions,” Minnix said, referencing the fundamental reforms that lawmakers have proposed for Medicaid and Medicare. “Whatever is going on needs to be grounded in reality, not in ideology. And if you ground it in reality, it can be based on sound principles, not just political gamesmanship.

“So we’re hoping our members will create a sense of urgency, cause I think there’s some people over there [on Capitol Hill] who need to have a corrective emotional experience,” Minnix said while chuckling, although it’s probably one of the more poignant notes he’s made today.

But that wasn’t all. As usual, Minnix was frank in his descriptions of several immediate issues for his members and other long-term care providers at large. Read below for what Minnix had to say on: Ryan’s budget, his reaction to Ryan’s budget, a “false economy” created by cutting Medicaid/Medicare, the lawmakers who push for cuts to aging services, a new Group Purchasing Organization for LeadingAge members, and the intrigue LeadingAge members feel toward Accountable Care Organizations.

Ryan’s budget proposal

Minnix: We’ve got some serious concerns about block grants because we think they will lead to lower Medicaid reimbursement for nursing homes. And we believe people ought to stay at home as much as possible, but you cannot get away from the need for really good nursing homes in this country. There are some people who cannot be cared for at home and block grants will continue to put pressure on Medicaid programs—and most of them have. We believe we can make the case that if you continue to put pressure on Medicaid reimbursement, you’ll make costs in the rest of the healthcare delivery system go up, not down.

Our basic approach is, 'Helping people is the solution, it’s not the problem.' And what [Ryan] has on the table we think is, however well-attended, going to make things worse instead of better.

Reaction to Ryan’s budget

Minnix: Our first reaction was to have our members come to town and say, this is the wrong direction. If the philosophical intent behind it is more personal responsibility—we’ve got no problem with that. The Community Living Assistance Services and Support (CLASS) Act is a self responsibility long-term care insurance mechanism. We think he ought to be for that instead of against it. He’s a smart guy and I don’t question his motivation or intent, but he’s put a stake in the ground and over the next couple of years it’s going to create some discussion.

False economy

Minnix: Let’s get down to what happens in Medicaid. Illinois—their reimbursement today is $4.67 an hour. Texas and Mississippi are not far behind. Now they already have nursing homes with quality problems because they don’t have adequate staffing or they don’t have the clinical leadership competence to keep people in nursing homes. So somebody gets sick in a nursing home and they go to an emergency room, they’re admitted to a hospital or an ICU, do you think that nursing home is going to want to take that person back when they’re getting less money to take care of them to begin with? Most of the time the answer to that is ‘No.’ So, where are those people then taken care of? Instead of good nursing home care, which is probably a couple hundred dollars a day, they are taken care of in a hospital or an ICU that is a couple thousand dollars a day or more. That’s what we mean by the ‘false economy’—and those aren’t just examples. That’s the way it works. When nursing homes can’t handle people, they call 911 and go to hospitals. The truth is they don’t have to take them back.

The other issues around say the Medicare part of it, a voucher system for Medicare tells me that I have a discount on where I can go to get services. It says nothing about your ability to price those. All that does is create tiers in the system. Now if you want to talk about ways that people can participate in incentives to not overuse the system, that’s where that conversation ought to be. Not, ‘Here’s a voucher on your premium support. Good luck.’ That creates multiple caste systems. And you not only have a false economy there, that means your poor or isolated or vulnerable people don’t have the same access to quality that everybody else does. And there’s something I believe in this country under the heading, ‘That Ain’t Quite Right.’

Lawmakers cutting Medicaid/Medicare

Minnix: I wish you knew the people who are pushing these cuts, if they’ve ever had real problems in their own families. It’d be interesting to know. If you’ve ever had a family member in a hospital and tried to navigate the healthcare delivery system, and on Friday afternoon have a hospital discharge planner say you have to have a nursing home bed by close of business Monday, you’d know something about the implications of Medicaid, why CLASS is important, and why you don’t necessarily want to give governors the authority to spend Medicaid money on something else. Or, in our case, take Medicaid money and spend it in hospitals and continue to squeeze nursing home care. I think the people making these rules, we ought to find out what their understanding of real peoples’ problems are.

New Group Purchasing Organization

Minnix: We have a pool—a number of GPOs that states had, we had—and created a corporate entity called Value First and pooled all of that together. Twenty-five of our states bought shares of it, and it can really help people with their operating costs. If you just look at things like paint, or medical supplies, you can buy for thousands of entities instead of a hundred entities. If you can have hundreds of contracts in place that are constantly being renegotiated, that has a big impact on peoples’ operating costs.

[LeadingAge Board Chair] Win Marshall said something earlier in the general session, ‘The people in this room, if you are a member of Value First today, you have purchasing power of $150 million, and if you sign up today, you already would be getting 5% off your operating costs.’ That translates to something like $7 million. Now my members don’t pay $7 million in dues, which means that the members in that room, if they join up, have already earned their dues back. And the more people that sign up, the more that will help everybody.

And it just kind of emerged. It’s going to be, we think, a real godsend to people—and it’s about value. One of the reasons you join an association is you get more being together than any of you could get separately. The buying power of members every year is well into the billions. You start trimming a little bit off a few billion dollars in buying power and pretty soon you’ve got some real money being saved.

LeadingAge members intrigued by ACOs

Minnix: We have some members that are already part of large systems. So they’re going to want to know how in the large system are they going to play a role because most of them can take care of complicated people that don’t have to be in hospital beds or ICUs. It’s going to force them to think of all that in a much more qualitative and quantitative way.

We have some saying, ‘I am going to talk to my hospitals and doctors in the area and see if I can be at the ACO table.’ Then there are other groups that are beginning to reach out to hospitals and doctors either individually or as a collection of member services that would say to an ACO, ‘We, our consortium of LeadingAge members in the neighborhood, we will take responsibility for managing those people when they leave the hospital.’

You’ve got to deliver on quality, you’ve got to deliver on value, and you’ve got to be accountable for what you do because the hospital doesn’t want these people back, and at the same time they can’t stay at home sick, so everybody’s got to be really good at what they do. Fragmented care is killing seniors, and fragmented services are killing business models, and the only way out of that is for people to work in innovative community ways together.

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