Perspective: Financial Forecasting for MediCaring Communities

July 24, 2018

Anne Montgomery

Imagine a meeting in your community — perhaps later this fall or next year — where you assemble a group of like-minded peers: health care providers, organizations offering supportive services, advocates, local leaders, policymakers and other interested stakeholders. You are calling them together because they all have an interest in improving the health and well-being of older adults in the area. Now, further imagine that at this meeting, you are aiming to craft a strategy that will establish, using current programs, a more efficient system of service delivery that reduces spending — in a way that keeps any resulting savings in the community.

If this sounds like something you may want to consider, keep reading! Altarum’s Program to Improve Eldercare has created a financial simulation model that contains essential data, and which can be used to benchmark costs for creating community-anchored eldercare systems. We call this tool “Financial Forecasting for MediCaring Communities.”

Here’s how the tool works:

First you’ll need to know (or create a good estimate for) how many older adults live in the area and require a mix of calibrated services – usually including medical care and supportive services delivered at home. Then you need to examine the improvements that evidence shows are likely to keep them more stable and out of medical crisis more of the time. Next you need a willing group of providers in the area – inclusive of hospitals, physicians and supportive services providers – who are interested in creating a more coherent system for older adults who are living with advanced illnesses and functional limitations. Interested parties you may want to talk to include PACE organizations, Emergency Room clinicians, long-term care providers, Medicare Advantage plans that offer expanded supplemental benefits (which have recently been enabled to look at supportive services in the context of expanded supplemental benefits), home-based primary care programs, and other service arrangements.

Using the tool, you can construct baseline cost estimates for each major service category, from inpatient hospitalization through lab services, durable medical equipment, vision, dental, long-term services and supports (LTSS), and more – on a per-person basis. Then your team projects expected changes in spending over several years, which will come from shifting the mix of services to focus more on primary care, skilled home health care and supportive home care, as well as supportive services (e.g., home-delivered meals, adapted housing and transportation. Because a rapidly expanding body of evidence shows that when lower-cost geriatric care and supportive services are emphasized, utilization of costly inpatient hospitalization and long-stay nursing home placements decline, this then yield targets for reduced overall spending.

After that, the tool will calculate projected savings, taking into account projected enrollment targets. Next you estimate start-up and ongoing administrative costs to implement that changes and to cover an entity (possibly comprised of some of the individuals at your meeting) that will monitor and track how well providers in the area are doing in delivering cost-effective services to frail elders. That entity, which we’ll call an “eldercare council” will be sustained from the savings that the improvements generate, so your team will need a plan for capturing and using at least part of the savings in your community.

Intrigued? We invite you to click on this link and watch the 14-minute video demonstration — https://youtu.be/K8rKW48Felw -– and send us an email if you’d like us to help you create a simulation for your own community: Anne.Montgomery@altarum.org

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Altarum is a nonprofit organization that works with federal and state agencies and foundations to design and implement solutions to advance the health of lower-income individuals and those underserved by the health care system. We achieve measurable results by combining our expertise in public health and health care delivery with technology, workforce training and continuing education, applied research, and technical assistance. Our innovative solutions lead to better health for beneficiaries and better value for payers.
Financial Forecasting for MediCaring Communities

Perspective

Anne Montgomery

Anne Montgomery  - MS

Director, Eldercare Improvement

Areas of Expertise
  • Older Americans Act
  • Medicare and Medicaid
  • Long-Term Services and Supports

Anne Montgomery develops policy and research initiatives that improve long-term services and supports and medical care for older adults receiving services from Medicare, Medicaid, the Older Americans Act, and other programs. She is leading efforts to implement and evaluate comprehensive culture change in nursing homes, and is working with colleagues to develop a new volunteer-based Community Care Corps program at the national level.