Updates on the Healthcare Industry with the New Administration
Katherine: Hello everyone. Thank you so much for joining us on This Needs To Be Said. Our friend Paul Contris is here with us on today. He’s going to give us some updates as it pertains to his part of the healthcare industry and with this still being new in the year, I’m probably going to be, I’m going to have my mouth dropped open with what he shares with us on today. We are under a new administration and things are changing and we can’t possibly keep up with everything on our own. Friends like Paul stop by to share with us.
Hey Paul, how are you?
Paul Contris: I’m good. How are you Katherine?
Katherine: I am wonderful. Now, you have some updates for us and we know that you, in your industry, long term care, you have … Let me not try to fill it in for you. You have some updates for us in your industry. Tell us what those are.
Paul Contris: Well, it’s kind of a double edged sword. It’s an exciting time. It’s like a Tale of Two Cities. It was the best of times, it was the worst of times. Most of the senior care companies and providers are facing some headwinds as far as occupancy levels and labor challenges. That’s one of our big challenges is getting the right talent in the buildings. It’s good news in general I guess for the unemployment picture around the country. We’re definitely feeling a pinch as far as getting a lot of access to quality people. There’s a lot of competition. They’ve got options out there and that’s one of our big challenges right now.
Actually, in general, there’s, right now there’s like this like two or three year lull in the demographics. Apparently, it has something to do with the birth rate back during the Great Depression, I believe. This, 2016, 17, 18, 19, three or four year period where there was kind of a drop off in the birth rate. That’s creating some issues in itself. What everybody’s looking forward to is the big age wave that’s going to hit in 2020. Then, really our kind of target population, the 85 and over demographic just kind of takes off like. It really takes off and we believe there will be very strong demand at that point. Most of the providers right now are just kind of hunkering down and doing what they have to do to deliver quality care and stay financially viable.
Katherine: Mm-hmm .. Trying to stand out among everybody else.
Paul Contris: Right. Yeah, there’s really a lot of changes and dynamics going on and it depends on what segment of the senior care business you’re in. We’re actually in skilled nursing and assisted living and we do have a few independent living facilities and have some home health. We kind of run the spectrum in the senior care market. It’s just really kind of transforming and changing in each of those levels. What’s happening is the acuity levels are increasing at every setting. People in assisted living today, they need a lot more assistance with their daily living activities and they have a lot more complex medical needs than they did ten, fifteen years ago.
It’s the same as in our skilled nursing facility. We’re, it’s really kind of pushing the acuity levels in all levels. People are kind of again and aging in place they call it in the settings that they’re in. People who have been in assisted living maybe ten or fifteen years ago are now able to be cared for in their home with home health. The people at assisted living now, a lot of those people ten, fifteen years ago would have been in a skilled nursing facility. A lot of people in the skilled nursing facilities might have been in something closer to a hospital ten or fifteen years ago.
In our skilled nursing facilities, we have ventilator dependent units, traumatic brain injury units, post cardiac care recovery units. We’re doing things that were done really in acute care setting in hospitals fifteen, twenty years ago. That’s one of kind of the major transformations I think in our industry over the last five, ten, fifteen years is that we’ve really had to kind of develop our capabilities, our systems, our employees to be able to deliver a lot higher level, more medically complex level of care. That looks like that’s going to continue on into the future. We’ve got our work cut out for us.
Katherine: Well, sounds like you are definitely covering a lot of the specialty areas and I don’t know the whole gamut of your industry but as you’re talking and the competition to basically, keep your employees working, keeping employees, keeping patients, the whole balancing act of it because there’s so much competition for you. It sounds like you all have decided to specialize in some areas so that could put you head and shoulders above someone else who doesn’t have that specialty. They could do it but then you all specialize in a certain thing. While you have a tall order to fill, it’s definitely going to be attractive for the people who are looking for that kind of care and it’s niched down. I think that’s good news. I mean, it’s good news that there’s the need out there but it’s also good news that you all have stepped out and said okay, these are the things that we can draw people in with. It’s always a challenge to keep supply and demand and in this case, patients and employees there to meet the needs of the people that you need to care for so yeah. I think it’s a good problem to have. What do you think?
Paul Contris: Yes. Yeah, I can’t complain. We’ve got a lot of challenges but that’s what keeps it interesting.
Paul Contris: Like they say, if it was easy, everybody’d be doing it.
Katherine: Absolutely. You are absolutely, absolutely, no fun in talking about that. This is good. Now, I just want to go back and make sure I did not miss, is there anything, cause I did say we are under new administration. Is there anything since being under the new administration, President, that has changed for your industry? Has it been affected at all or is there going to be anything happening in the future that may affect it?
Paul Contris: Definitely yes. In the future, everybody’s looking at their crystal ball but yeah, it’s really too early. I don’t think there’s anything significant that has happened yet. We’re all waiting to see what happens with the Affordable Care Act.
Katherine: Of course.
Paul Contris: One is, now he’s been saying that he’s not going to touch Medicare or Social Security so well, that’s alright for me. Medicare’s a fairly large payer of ours. What they have been talking a lot about is going to block grants for Medicaid. That would have a very big impact on us and Medicaid makes up probably 60%, two thirds of our revenues. It’s, the jury’s still out on how that will flop out for us. The general feeling is that it’s probably not going to, it’s probably going to tighten things up for us. It’s not, next, when they say block grants, grants and putting a per capita limit on Medicaid that means that the states then have to make choices between well, how much are they going to spend on everything Medicaid provides?
Medicaid provides for a lot of things including nursing home care, long term care and in many states, assisted living care. Now, they’re going to, and the gist of it I think will be, it will be tightening up the funding sources. That’s going to be another challenge for us but I’ve been in this business now for over 35 years and when I got into back in ’83, ’84, there was always some looming, big change in reimbursement that everybody was kind of freaking out about, that oh, my God, it’s going to reduce our reimbursement. How can we provide the care we need to and pay the people we need to provide the care if they cut our reimbursement? It’s just something you have got to manage through and I’m sure we’ll be able to manage through that when it finally is introduced.
Katherine: Mm-hmm. Well, you’ve been there before, you can definitely get through it again. You never know. You never know what somebody’s big idea is so yeah, so waiting and see. This has been interesting, as I thought it would be. Some industries, I am with my mouth open right now because some industries you’re just thinking that like, my mind dumbly would think you always, you didn’t have a problem like keeping staff or keeping patients or having the services that a patient needs, those changes that you’re talking about or those modifications or training, everything that you would need, your balancing act.
My mind is thinking when people get older or people get sick and they need these so they just go there. Now you have competition or there’s competition. For me, I would not know that stuff without you coming on the show and sharing with us. I’m just like wow, everybody has competition everywhere.
Paul Contris: Yeah. Oh, yeah.
Katherine: Nobody’s safe.
Paul Contris: It’s a challenge. I mean yeah, I’ve yet to run into somebody that’s in a business that they get it stress free. Right. Right. It’s never smooth sailing. I think it’s like life in general. It’s kind of like a roller coaster ride.
Katherine: Sure. It absolutely is, you have got to lean in.
Paul Contris: Lean in, that’s it.
Katherine: Paul, it’s been good. I want you to let people know how you would prefer they get in touch with you or found out more information about you outside of this interview.
Paul Contris: Yeah, that would be our website, www.wellcov.com and that’s W-E-L-C-O-V, wellcov.com.
Katherine: Awesome. Until next time Paul, have a wonderful day.
Paul Contris: Thank you. Bye.