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Can Health Care Savings Drive a New Funding Model For Affordable Housing?. Shifts in Health Care Industry Provide Opportunity for a New Funding Model. Industry moving from “pay for volume” to “pay for value” Shift from access to “sick care” to health care” and “well care”

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slide1

Can Health Care Savings Drive a New

Funding Model For Affordable Housing?

slide3

Shifts in Health Care Industry Provide Opportunity for a New Funding Model

  • Industry moving from “pay for volume” to “pay for value”
  • Shift from access to “sick care” to health care” and “well care”
  • Public Purchasers are shifting their patients to managed care plans
    • Capitated rates with cost savings and risk potential for health plans
    • Better potential for aligning costs and savings
slide5

Proposed Health and Housing “Products”

  • Care Management services: generallyfocused on increasing services and improving outcomes for existing residents or in new properties using traditional HUD/LIHTC deal structures
  • Supportive Housing– service-enriched housing, typically for formerly homeless individuals, including seniors, veterans and/or disabled
  • Service-enriched senior housing: Unlicensed housing with support services that do not reach the level of care and supervision of assisted living or skilled nursing
slide7

Funding Model Options

  • Traditional approach (current): Reliant on public funding for capital, services, and operations. Health and housing integration and innovation occurs at project level with some philanthropic support
  • 2) Fee for service (proposed approach): directly contract with a health plan or provider for a monthly fee that covers health and housing costs in an integrated payment that is not dependent on health outcomes.
  • 3) Pay for Success: Seek contract with public agency to pay fee in return for specific outcomes (e.g.. avoided hospitalizations, lower costs, etc.). Would require partnership with investor that would pay for the up-front costs of the housing and services in return for share of savings.
slide8

Factors that influence revenue potential

Access: what is the process by which residents gain access to apartments

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

Annual Medicaid Expense

Alignment / Access Control

slide10

Opportunity #1: Care Management

  • service-enriched housing communities are a platform for comprehensive health promotion and risk reduction
  • On-site staff can deliver targeted care coordination services in a
  • community-based setting
  • Coordinators also facilitate access to residents for third party services such as health screenings
  • Mercy Housing has the expertise and opportunity to reach individuals
  • who elude clinic-based case management
core wellness practices and programs
Core Wellness Practices and Programs
  • Health and Wellness Interview
  • Preventative and Primary Health Care
  • Behavioral Health Care
  • Health Benefits Acquisition
  • Health Education and Risk Reduction
  • Food
  • Physical Activity
  • WellBeing Checks
  • Activates for Daily Living Screening and Support
  • Transition Plan to and From Hospitals/Institutions
slide12

Examples of Third Party Services Coordinated by Mercy Housing

  • Health screenings and immunizations
  • Services to promote healthy pregnancies and help children
  • with special needs
  • Hospice
  • In-home Support Services/ Adult Day Health
  • Food services: Meals on Wheels; Food Bank
slide14

Hot-spotter approach:

Small percent of “high cost” individuals

drive 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
slide15

Problem: Traditional “medical” solutions are unlikely to avoid key cost drivers of highest cost enrollees

  • Nursing homes or other long-term care represent 77% of cost
  • attributable to elderly “high-cost enrollees” of Medicaid
  • There is currently no affordable alternative to skilled nursing
  • Homeless individuals and other extremely low-income individuals are
  • often difficult to treat for illness and/or discharge from hospitals
  • because they lack stable housing and often fail to access behavioral
  • health supports.
slide16

“Market Failure”

  • 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” the dual eligibles in their $1,000/night beds
slide17

Case Study:

Mission Creek

Senior Community

San Francisco

  • Service-enriched independent living alternative to nursing home beds
  • at Laguna Honda
  • 50 of 140 units direct referral of SF Dept of Public Health from skilled
  • nursing, hospitals and shelters
  • SF DPH pays $700/month operating subsidy for exclusive access to
  • those units.
slide18

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 Interview
  • Health Education Food banks
  • Physical 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
slide19

Study Findings:

San Francisco

Department of Public Health

  • Medicaid/Medicare costs of the 50 original DPH referrals shrank
  • from $1.7 million per year to $253,000
  • Per capita, $29,000 annual savings, Medicaid and Medicare
  • Savings: reduced hospitalizations and skilled nursing stays
slide20

Value Proposition:

Estimated Total Costs & Savings

Health

care cost

$65k-100k

per year

Net Savings

Impact of Independent Long Term Care

Fee

Ongoing health cost

Pre-Intervention

With Independent

Long-Term Care