As the elderly continue to constitute the majority of hospital stays, account for the bulk of nursing home costs and consume the greatest proportion of community-based services, health care organizations are developing initiatives addressing the senior populations in their current and desired marketplaces.

STRATEGIC IMPERATIVES

Health care organizations are motivated to create senior health services programs by four key factors:

* the demographics of aging

* managed care

* reduced government spending

* the mission/margin equation.

Below is a description of each factor.

1. Demographics of aging. The U.S. elderly population is growing at a moderate pace today. Beginning around the year 2010, however, there will be an explosion. Today, one in eight Americans is over age 65. By 2050, one in five Americans could be elderly. Most of the growth will occur between 2010 and 2030, but when the baby boomers begin to turn 65--between now and 2010--the older population will grow at a rate of 1.3 percent every year (Table 1).

Senior health services programs serve the elderly population by focusing on the needs of the elderly cohorts that comprise their marketplace: the young-old, age 65 to 74; the middle-old, age 75 to 84; and the old-old, age 85 and over. The old-old are the most rapidly growing elderly age group, constituting 10 percent of the elderly today. By 2050 the old-old cohort could make up 24 percent of elderly Americans and 5 percent of all Americans (Table 3).

Considering that chronic care needs increase significantly with the aging process, health care organizations are compelled to pay attention to these projections. As more people become part of the old-old cohort, they face chronic, limiting illnesses or conditions such as arthritis, diabetes, osteoporosis and senile dementia. Fifty percent of people age 85 and older need assistance performing activities of daily living such as bathing, mobility within the home and meal preparation. While 1 percent of those in the young-old cohort lived in a nursing facility in 1990, nearly one in four age 85 or older did.¹

2. Managed care. Despite the recent press bashing of HMOs and withdrawal of Medicare risk HMOs from certain rural areas, Medicare risk HMO membership is continuing to grow, particularly in urban areas (Table 2). As some payers remove themselves from Medicare risk, providers are viewing opportunities to fill the void.

Health care organizations that are attempting to position themselves as "managed care friendly" realize that payers require geographic coverage, a comprehensive delivery system, cost-effective delivery and a single contact point. But the Medicare population requires a much more interventional approach than the commercial population. Health care organizations that are most successful in managing the Medicare population employ intervention strategies such as high-risk identification, geriatric care managers, geriatric assessment teams and disease management programs. All of these initiatives are components of a senior health services program. So is continuum of care case management.

Health systems that have several years of experience with their own Medicare risk plans have, for the most part, been able to effectively manage hospital days per thousand. Their major focus today is on managing subacute and skilled nursing facility days per thousand, a task that requires integration and management oversight of the entire continuum of post-acute care. For example, successful integration of home health with discharge planning from the acute hospital, rehabilitation unit as well as skilled nursing facility allows for optimal decisions that translate to cost effective, quality care.

3. Reduced government spending. The Balanced Budget Act of 1997 was the U.S. government's latest attempt to control Medicare spending. Changes contained in the BBA are expected to reduce the growth of Medicare outlays by $115.1 billion between 1998-2002. Medicare's rates of increase in payments to hospitals will be reduced by more than $40 billion; physician payments, by $5.3 billion; managed care plan payments, by $21.8 billion; home health agencies (HHAs), by $16.2 billion; and SNFs, by $9.5 billion. The BBA also will reduce the growth of Federal Medicaid outlays by $10.1 billion.²

The BBA has forced health systems to manage their costs efficiently and to rely on an increased volume of business in order to offset declining margins. A senior health services strategy is essential for achieving a larger marketshare of elderly services.

4. Mission/Margin Equation. The recent Columbia/HCA public debacle has caused not-for-profit, mission-driven health systems to reexamine their values and operating philosophies. Among many religious health systems, there is an enhanced awareness of their mission, which may include service to the elderly. For example, the ministry of the Benedictine Health System is to serve the poor and powerless, many of whom are elderly.

However, managers of mission-driven health systems also are aware of the importance of achieving adequate margins on health care services to accomplish their missions. Actualizing a mission of service to the elderly requires a carefully crafted strategic plan intended to result in fiscally sound initiatives for senior health services.

SENIOR HEALTH SERVICES STRATEGIC MODEL

Most health systems that have addressed senior service needs have begun with the development of a post-acute network. Their goal is to control the flow of patients through the continuum of care and ensure access to facilities and services following hospitalization. While post-acute networks constitute an essential component of a senior health services strategy, focusing on the post-acute component alone ignores the fact that 85-90 percent of a health system's senior population resides in the community and not in a long-term care facility.

Therefore, a senior health services model also must include services that are community-based. The model must address the needs of independent, non-frail elderly; independent, frail elderly; and dependent, frail elderly constituencies. The model must reflect regulatory and payment issues for health care services. Finally, it must acknowledge the cardinal requirements of continuum of care case management as well as employ a management information system that allows effective tracking of services and seniors.

The senior health services strategic model shown in Figure 1 incorporates elements within three major components:

* Geriatric Institutional Care

* Medically Oriented Community-Based Services

* Socially Oriented Community-Based Services.

These components are coordinated and integrated through a continuum of care case management system and a matrix management structure. Below is a detailed description of each component.

1. Geriatric Institutional Services. The geriatric institutional component of the senior health services plan shown in Figure 2 provides access to post-acute and non-acute facilities and services, and allows the health system to maintain control of the patient as he or she moves from service to service within the continuum of care. Venues within the geriatric institutional component include:

* Long-term acute care hospitals (LTACH), serving the acute hospital needs of special populations such as ventilator-dependent patients

* Subacute units within hospitals or dedicated units within skilled nursing facilities, serving as a step-down placement from the acute hospital or as an alternative to an acute hospital admission

* Rehabilitation units or hospitals, providing comprehensive rehabilitation programs for those in need of intensive rehabilitation in an acute setting

* Skilled nursing facilities, providing short-term medical and rehabilitative care for patients who continue to require 24-hour nursing supervision

* Nursing facilities, providing long-term care for residents who cannot live in a less restrictive setting

* Assisted living facilities, providing housing, meals and support services for people with multiple (typically three or more) dependencies in their activities of daily living

* Dementia/Alzheimer's facilities, specialty units within nursing facilities or assisted living facilities designed for people who require special programming for Alzheimer's or senile dementia.

2. Medically Oriented Community-Based Services. This component of the senior health services model includes services designed for both frail and non-frail elderly who are living in the community. Service elements include:

* Home health agencies, encompassing both post-acute nursing and rehabilitative services as well as private duty and home health aide assistance. Health systems may offer a hospice benefit as part of this service initiative and also may own--or furnish through a preferred provider--DME for seniors residing at home as well as those in geriatric institutional facilities

* Ambulatory services, which encompass outpatient rehabilitation services as well as newly emerging ambulatory infusion centers, pain clinics and chemotherapy centers

* Geriatric consultation clinics, involving a geriatric assessment team that provides in-depth evaluations as a service to other physicians within the health system

* Geri-psychiatric clinics, specialty clinics focusing on the needs of both ambulatory and institutionally based elderly. Some health systems offer a memory disorders clinic

* Geriatric physician panel, a group of physicians affiliated with the health system who are qualified by education or experience to manage the primary care of seniors

* Adult day care, providing activities for and supervision of elderly persons who cannot be left alone during the day

* Program of All-inclusive Care for the Elderly (PACE), a risk management model providing a comprehensive package of primary, acute and long-term care services to community-based frail elderly.

3. Socially Oriented Community-Based Services. The primary focus of health care is shifting from "curing disease" to maintaining the health of entire communities. Within this philosophical shift is the need to provide support necessary for frail elders to remain in their communities and enjoy an improved quality of life, thus reducing the need for high-cost services.

But while socially oriented community-based services are often lauded as valuable, the lack of third-party reimbursement has caused many health systems to defer development of this key component of a senior health services plan. However, as systems accept global capitation arrangements with HMOs and form their own Medicare risk health plans, the need for this component within a senior health services strategy will become a priority.

Socially oriented community-based services include a wide array of programs that facilitate independence and quality of life for seniors, including:

* Senior membership program, an umbrella for various health and social services provided to program members that builds loyalty among seniors to a health system and its services

* Senior data bank, which provides the means to establish high-risk identification programs and tracking of seniors, service utilization and outcomes across the continuum

* Senior information referral, which serves as a one-stop resource center for referrals for any type of service required by seniors to maintain independence. Such centers may include referrals to geriatric institutions, physicians, ambulatory services and other community-based services, e.g., home maintenance, friendly visitor, lifeline, at-home chore service, legal and financial assistance

* Health/wellness education, including health screening and health education, frequently offered in conjunction with medically oriented community-based services, such as a geriatric consultation clinic or outpatient rehabilitation or adult day care

* Senior fitness programs, which may be provided through a health system's wellness center or in concert with an existing fitness center, such as the YMCA, with special programming and times for seniors

* Transportation, a service that may be provided through vans operated or funded by the health system, or in conjunction with other community initiatives sponsored by not-for-profit organizations or counties

* Outreach services, which may include a wide array of support services, such as friendly visitor, at-home chore services, financial and legal services, pharmacy services and meals-on-wheels.

Health systems today typically do not seek to own all elements of the three basic components of the senior health services strategic model. Partnerships, joint ventures and preferred provider arrangements are becoming popular ways to allow the health system to obtain the advantages of a senior health services program without expending the capital and human resources required to build the services from the ground up.

MANAGEMENT CONSIDERATIONS

Whether owned or collaborative, the components within the senior health services program must be both effectively managed and successfully promoted. Management begins with a savvy senior leadership team, led by the CEO or an executive who reports directly to the CEO. The senior health services strategic model also requires two additional senior managers, one focusing on the geriatric institutional component and the other focusing on the medically oriented and socially oriented community-based services. The roles of the two managers involve coordination of the various initiatives and service elements within the senior health services program to ensure that the health system's objectives are being accomplished. Line managers for the services within the components comprise "action teams" that work with the assigned component manager, using a matrix management model.

Physicians, community leaders and other health system executives are involved through advisory councils that meet at least semi-annually to evaluate the effectiveness of the senior health services initiatives and provide input relative to future directions.

Finally, an evaluation team composed of key executives, such as the senior planning director and the chief financial officer, who have no vested interest in any of the strategic initiatives, are charged with developing and implementing an objective evaluation system for the senior health services program.

PROGRAM IMPLEMENTATION

Health systems that have a successful senior health services program have created a strategic model that reflects all three components of a senior health services program as well as a formalized management structure. Effective implementation of the model requires:

* sustained organizational commitment

* a savvy senior leadership team

* allocation of adequate resources

* a long-term perspective

* a well designed marketing and promotion initiative

* clear goals and objectives

* physician involvement

* health system staff involvement

* an integrated information system

* integration with other health system services.

By defining and pictorially describing a strategic model for senior health services, a health system has begun effectively clarifying its objectives and the scope of its senior health services program to engender commitment from all stakeholders. *

References

1. Hobbs FB, Damon BL. 65+ in the United States. Washington, DC: U.S. Bureau of the Census, 1996.

2. The Balanced Budget Act of 1997, Public Law 105-33.

Dr. Kathleen Griffin is national director, post-acute and senior services, for Health Dimensions Consulting Group, a national consulting firm and a member of the Benedictine Health System, Scottsdale, Ariz. She is also an ADVANCE editorial advisor.

Teamwork in health care usually refers to caregivers. Physicians, social workers, nurses, PTs and others fuse their specialties to give patients the best possible outcomes. But the IHS long-term care system, based in Broomall, Pa., doesn't stop there--it's seven Philadelphia facilities are using teamwork to build the strongest marketing plan yet.

Each of the 400 facilities in the IHS system offers specialized service for specific populations. The Plymouth Meeting branch, for example, works with ventilators and infusion therapy, areas that are often neglected by subacute facilities, says Kathy Glendening, administrator. But instead of each facility pursuing an individual marketing plan based solely upon its own strengths, all the facilities have joined together to present the local medical community with a complete package.

Representatives from each facility give detailed presentations to area physicians and discharge planners. They emphasize the system's wide skill base and flexibility to place patients, even if one facility is full. Individual facilities also describe their own advantages. The Plymouth Meeting unit, for example, boasts three medical directors and a pediatric pulmonologist.

"After the presentations, they know us," Glendening says. "If the first-choice facility is full, they don't have to start all over again. We will find a bed in one of our other units."

The system also offers simple referrals and admissions, another strong marketing point. Discharge planners just fax referrals to the central office, and IHS does the rest.

- Carrie L. Adkins