1. Mapping The Future: Enhancing LTC for Older Minnesotans, 2005 to 2030
Final Conclusions and Recommendations
Nancy E. Rehkamp, Principal
James Rice, PhD., Principal
David Schuh, CPA, Principal
November 9, 2006

2. Executive Summary

3. Mapping the Future - Key Objectives
Gain an understanding of the challenges confronting long term care providers based on demographic changes
Assist member organizations prepare for the future
Develop insight into the changing customer expectations and the implications to facilities and providers
Help member organizations take advantage of the opportunities and respond to the challenges
Influence public policy to assure that the services and care required will be available for older adults
Seek resources to address the issues facing skilled nursing facilities and the communities they serve.

4. Mapping the Future - The Challenge:
Gov’t Regulations
Gov’t Investments
Bully Pulpit-Stakeholder Attitudes
How to establish a shared view of future state of LTC that equitably guides both policy formulation and the plans of older adult service providers?
Historical Patterns of Utilization, Investments, Insights
Key Conclusions?
Steady decline in demand for traditional SNF, and increase in use of HCBS to support shelter & health care needs of older Minnesotans.
Future LTC Scenarios:
* Institutional
* Balanced
* Independence
What might happen in Demand for LTC and Supply of LTC Capacity?
Re: Physical and Economic Resource Availability, not Human Resources under varying assumption sets
Public Policy Change
Service Provider Behavior Change
Drive
Informs
Care Model Designs
Care Facility Designs
Investments in:
Technologies
Skills Development
Leadership Attitudes/Styles

5. Mapping The Future: 2030 – Key Conclusions
The need for skilled care beds will decline by 7,300 beds over the next 25 years.
The investment in Home and Community Based Services & Assisted Living may delay or eliminate the need for some stays in SNF.
Increasingly, assisted living may substitute for SNF stays in the future, but over 16,600 new assisted living units will be required to achieve the estimated bed decline.
Services provided in care centers will shift dramatically as more and more residents seek short term care at care centers following an acute illness or ambulatory surgery
Admissions to SNF for short stay recovery and rehabilitation are expected to double over the next 20 to 25 years and will represent 70% to 80% of all SNF residents.
The payer mix is likely to change with Medicaid paying for less than 40% of all customer stays and Managed Care playing a larger role.
Studies are showing that Minnesotans have not saved enough for their long term health care needs. For an increasing number of older Minnesotans, this will limit their choices and increase the financial burdens on families and public programs.

6. Mapping The Future: 2030 – Key Conclusions
Capital costs to replace aging and outdated skilled care facilities are expected to be about $4.1 billion over the next ten years and almost $10 billion over the next 25 years.
Many of Minnesota’s SNFs are older, do not meet customer requirements and cannot be easily adapted for new technology.
The analysis indicates that Minnesota skilled care facilities may have insufficient financial performance and creditworthiness to fund capital and facility replacement.
A continued deterioration in the current fragile financial condition of skilled care facilities will result in a significantly greater reduction of skilled beds over the next 10 years than historical trends.
The consumer demand for SNF may not match the supply of SNF beds in certain regions of the State as beds close due to deteriorating financial performance.

7. Key SNF Customer Groups in the Future
Short stay, post-acute residents who require complex medical care, rehabilitation or time to heal & recover
End of life residents whose care needs have become greater than could be accommodated in their prior residence
Frail residents who have limited mobility, complex medical issues or who have no informal support systems & do not have the resources to pay for the support privately
Residents with cognitive impairments which make them unsafe, an elopement risk, or the disruption they create in other living settings is so significant that they need greater supervision or control in their environment, i.e., individuals with end stage Alzheimer’s Disease or Dementia

8. Preview of Future
Dramatic changes are taking place. Are we ready for speed & magnitude of the change?
Fewer SNF beds and facilities will be required. Where will they need to be located? What will be the design of their care models & facilities?
Resident types will be very different. How will our service quality, pharma systems, medical and computer technologies need to change?
Other models of housing & services will substitute for traditional SNF care. How shall we develop, compete or collaborate with these new players?
Payer mix will be radically different. How will we prepare for our new contracting knowledge and systems?
Substantial capital investment will be required to assure the SNF facilities are retooled to meet customer preferences and clinical requirements. Where will providers access the needed capital to remodel, rebuild and replace existing facilities?
The State’s role in managing LTC will change as it contracts with managed care & moves to expanded consumer choice models. How will we prepare for this new era of accountability & responsibility?

9. Preview of the Future…lots to do….
A reduction in skilled care bed demand relies on:
An addition of Home & Community Based spending on about 2,500 to 4,400 people each year at $8,000+
Acute care utilization per 1000 population remaining constant. Even with a constant utilization rate the admissions from acute care will increase from 31,700 to 60,000 or more per year by 2030
An additional 16,649 Assisted Living units constructed by 2030
Those 65+ living alone will grow from 184,500 in 2005 to 347,000 of which about 100,000 will be 85+ by 2030 and many will not have family or others to provide informal care
Each year up to 90,000 individuals 65+ whose resources are inadequate may need assistance
Part of what you will hear from us today is that based on our analysis of future demand for skilled care, there might be a need for few skilled care facilities and skilled care beds. However, this assumes that we, the collective we, can garner enough staff, economic resources and ingenuity to create ways to provide all the other services that will be required to assist our elders live in the community or other senior housing venues. This list is our estimate of the additional services that need to be developed and provided in order to reduce the total skilled beds required state wide to 27,881, the low estimate of skilled care beds needed by During our presentation we will take you through the assumptions that the Imperative reached to create the model and estimate the number of beds required.
LTC Imperative Demand Modeling 2030

10. Where is SNF bed capacity expected to change?
The analysis of SNF beds required in 2030 produced the following estimates of beds required by region. This is the lower estimate of beds:
Model Base 2005
2030 Low
Scenario 
Bed Change
 % Change 
4,801
4,046
(755)
-15.7%
2,806
2,339
(467)
-16.6%
1,615
1,526
(89)
-5.5%
5,554
4,494
(1,060)
-19.1%
4,078
3,992
(86)
-2.1%
13,684
8,642
(5,042)
-36.8%
3,000
3,147
147
4.9%
35,538
28,186
(7,352)
-20.7
East Central
Northeast
Northwest
Southeast
Southwest
Metro Twin Cities
West Central
Statewide

11. Strategies for Change: A New Compact
The key conclusions suggest that the time may be right for a fresh look at the issues facing the State, its providers and its residents. The overarching goals of this “fresh look” should include:
Capital availability for tomorrow’s facilities and technology
Oversight that reinforces quality while allowing creative options for care delivery and resource allocation
Moratorium exception process that protects necessary access
Property reimbursement that supports creditworthiness and access to capital
Availability of sufficient year to year funding to support efficient and effective care delivery to older adults
Collaboration with key stakeholders to ensure that other housing venues required by older adults will be available when needed
Transition of care delivery systems, facilities and payment models to meet the needs and challenges of customers of the future

12. Capital Demand Executive Summary
LTC Imperative Demand Modeling 2030

13. Timing Considerations: Nursing Facility Replacement
When Will Today’s Nursing Facilities Need to be Replaced
Based on the current average age of plant of respondents to the Imperative survey, approximately 58% of nursing facilities will likely need to be replaced or significantly renovated in the next 10 years.
Source: Imperative Survey.
Average Age of Plant = Accumulated Depreciation / Depreciation Expense

14. Capital Requirements: Facility Replacement
Based on the discussions with architects and recent facility replacements, the estimated replacement cost per bed for a skilled nursing facility “of the future” in current dollars is as follows:
Replacement Cost / Bed
($000s)
Construction and Related $140,000 - $175,000
Equipment & Technology $15, $30,000
Financing and Related $10, $20,000
TOTAL PER BED $165,000 - $225,000

15. Capital Required to Create Future Required Capacity
Using the replacement horizons from the Imperative survey combined with the mid-point replacement cost per bed estimates, the table below depicts projected future capital requirements based on the Low scenario.

16. How Will Required Capital be Financed?
Long term financial models projecting the future financial performance of Imperative facilities based on a continuation of current State reimbursement policies were evaluated. The table below reflects the projected financial performance of the “surviving” facilities (> $0 cash reserves at 2015) with replacement need in the next 10 years.
Imperative Financial Modeling Dashboard
This long term analysis indicates that facilities in the Imperative survey may have insufficient financial performance and creditworthiness to fund capital and facility replacement.

17. Provider Demand – Availability of SNF Beds
LTC Imperative Demand Modeling 2030

18. Capital Demand Based on Financial Viability
Hypothesis:
Financial Health and Viability of Nursing Facility
“Capital Demand” for Skilled Beds by Owner/Operators

19. Factors Impacting Demand Modeling Process Overview  Capital Demand
2005 Imperative Data used as basis
Breakouts include Freestanding vs. C&NC and Regions (Metro, Northeast, etc)
Financial Performance Groups created to model future financial capital requirements

20. Factors Impacting Provider Demand
Future Operator Capital Demand?
(2015)
Current Condition
(Financial Position Groups)
Current
2005
Facilities with
Financial
Facility
Beds
Long Term
< $0 Cash Reserves
Condition
Count
Debt
Facilities
Beds
Distressed 48
4,588
$70.4 M 48
4,588
Estimated
Negative 40
3,774
$134.4 M 40
3,774
Impact of 10 Year
Continuation of
Watch 67
6,378
$131.0 M 17
1,332
State MA Rate
Stable 77
7,642
$258.6 M
C&NC 32
2,737
$52.1 M 28
2,413
Totals
264
25,119
$646.5 M
133
12,107
50% of Facilities at risk by 2015 from weak revenues and cash flows
Imperative Survey Respondents Only

21. Provider Demand – Estimated Bed Availability
2015 Projected Beds Available
State Projection 28,000 – 29, (80% of Current)
Imperative Financial Modeling 17,000 – 18, (50% of Current)
Potential Gap in Available Beds 11,000
Based on Historical Trends
Continuation of Current State Reimbursement Policies
OBSERVATION
Current financial condition of nursing facilities with continuation of state reimbursement policies will result in a significantly greater reduction in available beds over the next 10 years than historical trends.

22. Provider Demand - Fiscal Vulnerability
Current Condition
(Financial Position Groups)
Future Operator Capital Demand
2005
Facilities with
% of Beds
Regions
Facility
Beds
Long Term
< $0 Cash Reserves
Not
Count
Debt
Facilities
Beds
Viable
Northeast 22
2,103
$63.3 M 16
1,445
69%
Northwest 16
1,016
$23.7 M 11
708
70%
Estimated
East Central 32
3,150
$121.8 M 22
2,067
66%
Impact of 10 Year
West Central 24
2,001
$56.7 M
Continuation of State 6
373
19%
Reimbursement
Southeast 49
3,933
$79.3 M 24
2,094
53%
Policies
Southwest 37
2,530
$42.5 M 20
1,372
54%
Twin Cities Metro 84
10,386
$259.3 M 34
4,048
39%
TOTALS
264
25,119
$646.5 M
133
12,107
48%
Imperative Survey Respondents Only

23. Where will excess capacity occur?
OBSERVATION
A continued deterioration in the already fragile fiscal condition of nursing facilities in all regions may create significant shortfalls in available beds vs. demand by 2015.

24. Understanding Today’s Demand The base & context for planning among members of The LTC Imperative
LTC Imperative Demand Modeling 2030

25. Understanding Today’s Use
Distribution of skilled nursing beds is not even across the state. The beds per 1000 in Minnesota includes Board and Care beds which are not counted in all states.

26. Why is Minnesota higher than nation in SNF?
Mn DHS Report to Legislature June 2006 Status of LTC in 2005

27. Understanding Today’s Use - Leading the Way
There are a number of reasons utilization of skilled care is different in Minnesota than in other states.
More women work outside the home than any other state at 66.4% in 2004
Minnesota has the second longest life expectancy in the USA with a large segment of the population over 85 years.
The percentage of older Minnesotans, 85+, living alone is about 62.4% in 2002.
Minnesota ranks #1 in the per capita spending for Home & Community Based Services (2004) shifting people from SNFs to other community settings.
Minnesota has substituted SNF with HCBS by shifting the number of non-A case mix clients to HCBS. This number has grown from 35.7% in 2000 to 42.3% in 2004.
Minnesotans use SNF care following an acute care stay about 150% more frequently than the national average for older adults and more frequently for the 45 to 64 age cohort.
Sources: Kaiser Family Foundation Research, DHS Report to the Legislature on Future of Long Term Care; MHA Discharge Reports for through 2004; CMS Website accessed summer, 2006, & Mn. Transformation 2010 & DHS Staff.

28. Understanding Today’s Use
This now represents about 82% of all discharges
Total discharges from SNFs are increasing, but the discharges for the residents who stay one year or less are increasing faster. Additionally, the number of residents whose stays are one year to three years are about the same and those with lengths of stay longer than three years are declining.
Based on the data we analyzed we believe the significant decline in average daily census is attributable to residents who had lived in nursing facilities for more than 3 years who are not being replaced by similar long stay residents.

29. Estimating Future Demand
LTC Imperative Demand Modeling 2030

30. Timely exploration of our issues and strategies:
Recent State Report will Guide Policy Debate during upcoming election and policy cycles
It is comprehensive and thoughtful

31. The State forecast continued decline to 2025
Mn DHS Report to Legislature June 2006 Status of LTC in 2005

32. Key Assumptions Included in Demand Analysis
Some factors that significantly influence skilled care utilization were not included in the demand model because they are not expected to change materially by 2030.
The following assumptions are currently included in the model.:
Population growth
Hospital demand & discharge rate to SNF
Changes in Wealth/Income of 65+ population
Changes in funding for Home & Community Based Services
Changes in Support from Family/Community Caregivers
Availability of Assisted Living options in the market

33. Regional Variation Matters: 1.3 million Over 65 in 2030
Pop: 90,780
Beds: 2,339
Pop: 45,270
Beds: 1,526
Pop: 200,480
Beds: 4,046
Pop: 30,777
Beds: 3,147
Metro has majority of older Minnesotans in 2030
Where will the gap be in facilities for older adults in 2030?
630,290
Beds: 8,642
Pop: 79,880
Beds: 3,992
Pop: 174,120
Beds: 4,494

34. Changes Impacting Demand: 85+ Population Growth
Population
85+
Change
 Geographic Area
2000
2010
2030
Absolute %
East Central
10,880
14,260
24,910
14,030
129.0%
Northeast
7,170
8,744
12,190
5,020
70.0%
Northwest
3,788
4,340
6,150
2,362
62.4%
Southeast
13,221
16,480
23,400
10,179
77.0%
Southwest
9,004
9,920
11,780
2,776
30.8%
Twin Cities Metro
32,870
46,090
75,040
42,170
128.3%
West Central
6,196
6,920
9,860
3,664
59.1%
Total
83,129
106,754
163,330
80,201
96.5%

35. The Data Tells Much….

36. Decreasing Role of Family Pushes up SNF Demand
Percentage of Family Caregiving:
97%
95%
91%
Caregiver Ratio
Elderly Dependency Ratio
The Caregiver Ratio is a comparison of the number of 85+ adults to 100 women aged 45 to 64. The Elderly Dependency Ratio is the number of 65+ to 100 workers aged 15 to 64. The higher the ratios the fewer the number of caregivers or workers. Each 1% drop in family care giving requires approximately $30M in additional public funds.
Source: Transformation 2010 published on the DHS Website. Accessed 7/06.

37. Retirement Income Minnesotans lack retirement income:
14.4% of over 65 in 2030 will have a retirement income gap
Approximately 24% of the 65+ age cohort will have a retirement income gap in 2020 (This could be as high as 44%)
60% are women (32% are married and 28% are single)
40% are men (24% married and 15% single)

38. Estimated Demand For Services

39. Incremental State Spending in 2030 Incremental $’s Per Person 65+
State Investments in HCBS (Low Bed Scenario requires substantial HCBS additional investments by State)
Assumption: $20 million additional each year w/ COLA at 3.5% per year
Regions
Incremental State Spending in 2030
Population 2030
Incremental $’s Per Person 65+
Funds (millions)
Percent
65+
Metro
$501
43.9
630,290
48.8
$795
East Central
$163
14.3
200,480
15.5
$813
Northeast
$94
8.2
90,780
7.0
$1,035
Northwest
$46
4.0
45,270
3.5
$1,016
West Central
$73
6.4
69,790
5.4
$1,046
Southwest
79,880
6.2
$1,177
Southeast
$171
15.0
174,120
13.5
$982
Statewide
$1,142
100
1,290,610
$885

40. Incremental AL Demand by 2030
Expected Need for Assisted Living Units 2030 (If these not available, need for SNF goes up)
Region
Incremental AL Demand by 2030
Units/1,000
65+
Units
Percent of Total
Metro
8,765
52.6
13.9
East Central
2,833
17.0
14.1
Northeast
1,062
6.4
11.7
Northwest
514
3.1
11.4
West Central
781
4.7
11.2
Southwest
669
4.0
8.4
Southeast
2,025
12.2
11.6
Statewide
16,648
100.0%
12.9

41. Changing Business Model – Low Demand
Residents’ needs are changing significantly. Many more residents will be shorter stays and will have higher clinical care needs. This will result in facility changes, different equipment needs, and specialization. It may result in new competitors and changes in market thinking.
Actual 2005
2030 Imperative Recommendations
% Change
2005 to 2030
Short Stay
0 to 90 days
3,148
16%
10,990
39%
249%
Moderate Stay
91 to 365 days
2,990 8%
7,330
26%
145%
Long Stay
> 1 year
29,400
76%
9,866
35%
-66%
Total Beds
35,538
28,186
-21%
The residents that stay one year or less will probably represent about 85% to 90% of all resident admissions by These will be residents transitioning from acute care to home.
LTC Imperative Demand Modeling 2030

42. The Low Demand Scenario in 2030

43. Low Scenario Results in 2030
Scandinavian countries
Have gotten the ratio
To 22 beds/1000

44. What if these scenario assumptions were different?
Low Bed Scenario:
2005 Base Year : 44,925 Admits, 35,538 Beds
Add for 2030:
Aging Population at past rates 37,661 admits or 31,563 Beds
Constant rate of hospitalization Little or no impact
Decline in Personal Wealth 29 admits or 78 Beds
Fewer informal caregivers 6,197 admits or 4,902 Beds
Subtract for 2030:
Expanded State HCBS Funding (4,374 admits) or (16,174 Beds )
High move to Assisted Living (11,654 admits) or (28,026 Beds)
Net Demand is ,785 Admits and 28,186 Beds
What if these scenario assumptions were different?

45. Changing Customer Demand - The Facility of the Future
LTC Imperative Demand Modeling 2030

46. Key Design Concepts
The skilled care centers of the future will be designed to:
Create flexibility in structure, layout and use to suit unpredictable future needs
Support and encourage the development of community and welcome visitors
Incorporate technology into the facility to maximize independence and self-reliance
Allow the technology and medical equipment be brought to the resident for his/her recovery
Maximize the therapeutic role of natural light, nature and walking paths into the facility and on the campus to encourage health and healing
Encourage self-reliance in all daily activities and accommodate compromises in vision, height, and mobility
Create environments that are responsive to psychological, social & emotional needs
Be a universal design so that residents can choose to age in place
Foster safe clinical service delivery
Create a campus that is safe, easily navigated and fully accessible
Provide maximal privacy for residents for clinical services, personal care and receiving guests
Invite intergenerational programming, activities and living
Provide adequate storage to create a clutter free environment

47. Principles of Skilled Care Residential Services
The array of services and programs offered to residents in care centers of the future could have the following characteristics:
An environment that reflects the normalcy of living environment that residents enjoyed previously
The care center will reflect the positive characteristics and meaningful relationships of home for the residents
Activities that promote intellectual stimulation, physical well-being, health improvement, self-reliance and enhance self-esteem
A strong focus on health, wellness and personal well-being
End of life and palliative care will be integrated into everyday services and care
Care through the changes in health will be coordinated to achieve the highest possible outcomes for the resident consistent with their preferences
Intergenerational programming and services will be incorporated into the services offered
Technology will be routinely used to improve privacy, reduce noise levels, reduce staff workloads, communicate and record health care data and other uses

48. Appendix
LTC Imperative Demand Modeling 2030

49. Questions for Consideration:
How will SNF operations change if each bed turns over about 5 to 6 times a year, for example if a 100 bed facility had 500 to 600 admissions what would you do differently?
If 30% to 40% or more of future residents require a short stay transitional care (defined as 45 days or less), how will that change the design of care centers? How will that change the delivery of care & operational processes?
If 40% to 50% of short stay residents continue in the facility following their post-acute recovery how could we manage them differently?
How can technology be used in the future to support customer preferences, increase client/resident independence and reduce staffing requirements?
Is the neighborhood concept as it has evolved a good model for the future? What have been some of the advantages and disadvantages of the current neighborhood models that will impact future facility designs and operations?
What are the biggest challenges that face skilled care facilities? How can skilled care facilities be designed to provide an equally attractive living settings as assisted living and other senior housing venues?
How can the core competencies of SNFs be leveraged to provide other services to older adults?
What are the key initiatives SNF and other Senior Living Providers could develop that would integrate them more closely with other providers and position them as an integral part of the health care team?
Aging in place appears to be a high priority for many older adults. Is there a way to design a “universal” space that could transition residents through all the phases of aging? (CCRCs allow aging in place within the campus, but could we do all the aging in one apartment/place?) What services could be developed? How would they be provided?
Other questions?

50. Opportunities and Threats
Top 10 Opportunities:
Growth in the elderly population
Elders’ capacity and willingness to pay for choice and quality
Increased demand for wide array of health and wellness enhancement services & products
Growth in assisted living and other senior housing venues
Exploding call for Home and Community Based Services
Entrepreneurship for service and product innovations
New influence of & coordination with acute and other post-acute care providers
Forge new alliances with community economic development as well as health and well being partners
Redefining the continuum of services
Brokering and leveraging care & convenience technologies for shared use by providers & individuals

51. Opportunities and Threats
Top 10 Threats (nursing care facilities)
Demand for transformational thinking & venues
Calls for new care & facility models
Need for new medical and computer technologies
Tenuous financial condition resulting in downsizing & closures
Aging buildings
Lack of access to capital to grow, enhance, remodel and convert
Exploding demand for short stay skilled care
Restrictive regulatory policies
Shortage of skilled staff
Entry of new and non-traditional competitors

53. DHS Transform 2010 Conclusions:
Boomers are a critical human resource for state
Older adults are not preparing adequately for retirement
LTC $ will overwhelm private & government
Inadequate focus on disease prevention
Families will be less able/willing to do caregiving
Most communities not ready for Katrina Age Wave
LTC system is not ready for integrated care model
LTC workforce retiring and inadequate supply
Need more innovative LTC options
Ethnic segments small but will grow faster
Source: MDHS, MBoardAging, MDH

54. Changes Impacting Demand: Regional Variation
Population
Change
Geographic Area
2000
2010
2030
Absolute %
East Central
81,212
98,667
200,480
119,268
146.9%
Northeast
50,120
54,170
90,780
40,660
81.1%
Northwest
24,546
26,710
45,270
20,724
84.4%
Southeast
91,149
98,800
174,120
82,971
91.0%
Southwest
52,981
51,900
79,880
26,899
50.8%
Twin Cities Metro
255,245
307,060
630,290
375,045
West Central
39,013
41,670
69,790
30,777
78.9%
Total
594,266
678,977
1,290,610
696,344
117.2%
Source: Minnesota State Office of Demographer, 2005 Estimate of Population by County.

55. ©2005 Larson, Allen, Weishair & Co., LLP
Thoughtful. Independent, but …
Families have provided 91% of care needed by older adults. One third of Boomers will not have children.
Who will provide care for frail elderly in 2030?
©2005 Larson, Allen, Weishair & Co., LLP
LTC Imperative Demand Modeling 2030

56. Fewer Informal Care Givers Lead to Increased SNF Usage
Variable Impact of Changes in Future Care Giver profiles –
(Higher ratios reflect fewer potential informal caregivers available to care for elders)
Regions w/
challenges
Source: Population estimates by age – Mn. State Demographer; Ratio calculations & beds available from DHS & Transformation 2010.
LTC Imperative Demand Modeling 2030

57. Changes Impacting Demand – Living Alone
65 + Living Alone
Geographic Area
2000
2010
2030
East Central
26.5%
25.5%
Northeast
30.2%
29.1%
Northwest
29.0%
28.2%
Southeast
27.5%
26.1%
Southwest
29.7%
27.9%
Twin Cities Metro
28.5%
27.0%
West Central
28.3%
27.2%
Total
26.9%
For 85+ this is 62.4%
Source: Minnesota State Office of Demographer, 2005 Estimate of Population by County.

58. New Technologies Support Independence

59. ©2005 Larson, Allen, Weishair & Co., LLP
Active:
Disability of older adults improving now, but obesity and related disabilities could increase as 45 year olds age by 2030
Many healthy older adults will outlive their retirement income
More will be working into 70s
©2005 Larson, Allen, Weishair & Co., LLP
LTC Imperative Demand Modeling 2030

60. Demand Influencers: Future Obesity’s Impact?
65 to 74
75 & older
Indicator
Males
Females
Obesity (more than 30lbs over ideal weight)
22.8%
26.4%
32.0%
36.9%
Inactive
45.8%
57.5%
One of the growing public health concerns is the increasing numbers of adults and children who are obese and overweight. The impact of obesity on older adults is significant and results in medical conditions such as diabetes and heart disease, limits mobility and greater numbers of individuals who rate their health as fair or poor. Additionally, obese individuals are more difficult to care for in community settings without specialized equipment and adequate caregivers. Many recent studies have predicted obesity will result in greater skilled nursing facility use.

61. Demand for traditionally designed skilled nursing facilities will continue to transform into additional living and care venues that seek to optimize independence, life-style and activity choices, sharing of services, accommodating new technologies, and new forms of caregiving support
New facility designs, new capital, new staffing, new care models, new insurance, new individual savings tools needed by

62. Role of Financial Expert Panel
The LTC Imperative Leadership designed a process that incorporates the thoughts and feedback from a broad range of individuals and professionals who work with older adults. One element of the LTC Imperative project is to outline the key design principles and characteristics of the future skilled care facility.
A part of that process is to learn from financial professionals what factors would make a SNF attract to the financial markets and increase the private capital available to providers. Additionally, this panel will be asked to provide counsel on the key metrics used to estimate future capital requirements of SNFs.
The June 26th Financial Panel was a first step in the process to hear from financial experts about the attractiveness of the SNF to capital markets and the challenges and opportunities that face providers as they conduct strategic capital planning.

63. Financial Panel - Questions to Consider
What key financial issues need to be considered related to assessing future owner/operator demand for beds?
What key policy issues need to be evaluated in determining future viability of owner/operator facilities and beds?
What is the projected impact of future policy (payment) considerations on the future owner/operator demand for beds?
Relative to future owner “demand” to own and operate skilled beds, what key economic factors will most influence your willingness to continue or discontinue operation?
Profitability  at what level?
Cash Flows
Other
Relative to the above question, what other factors would you add if a replacement facility or major capital investment is necessary
What criteria and/or metrics do you consider most useful in assessing potential capital needs?

64. Questions to Consider Financial Viability Creditworthiness Cash
What are the key environmental considerations that will impact future owner/operator performance?
What are the key metrics needed to determine…
Given the current reimbursement dynamics in the state, what policy characteristics would be most useful in increasing your confidence in assessing the feasibility of major or replacement capital?
What works best currently?
What could be changed or improved?
Cash
Profitability
Other?
Financial Viability
Creditworthiness
Debt Service Coverage
Cash
Other?

65. Role of Architect Panel
The LTC Imperative Leadership designed a process that incorporates the thoughts and feedback from a broad range of individuals and professionals who work with older adults. One element of the LTC Imperative project is to outline the key design principles and characteristics of the future skilled care facility.
A part of that process is to learn from architects, interior designers and management about what they believe should be included in the facility of the future and to develop a process to estimate the costs to construct the future facility.
The August 11th Architect Panel is a first step in the process to hear from architects and to build on the work many architects have been doing to redesign skilled care facilities to better meet customer requirements.

66. Questions to Consider
If 30% or more of future residents require a short stay transitional care (defined as 45 days or less), how will that change the design of care centers? If many of these residents require SNF care following a short stay is there a way to design their space so they do not have to move to another area of the facility?
What are the principles that should guide the design of future care centers?
How can technology be used in the future care center to support customer preferences, increase personal independence and to reduce staffing requirements?
Is the neighborhood concept as it has evolved a good model for the future? What have been some of the advantages and disadvantages of the current neighborhood models that will impact future facility designs?
What are the biggest challenges that face skilled care facilities? How can skilled care facilities be designed to compete effectively with Assisted Living and other Senior Housing?
Aging in place appears to be a high priority for many older adults. Is there a way to design a “universal” space that could transition residents through all the phases of aging? (CCRCs allow aging in place within the campus, but could we do all the aging in one apartment/place?)
Other questions?

67. Role of HCBS Panel
The LTC Imperative Leadership designed a process that incorporates the thoughts and feedback from a broad range of individuals and professionals who work with older adults. One element of the LTC Imperative project is to understand how older adults will use skilled nursing facilities and the characteristics of the future skilled care facility.
A part of that process is to learn from HCBS professionals what factors will influence individuals to choose SNFs over other available options and what will be the unique needs that SNFs can best serve.
The August 14th HCBS panel was a first step in the process to hear from key professionals and to build on the work many have been doing to redesign long term care services, programs and facilities to better meet customer requirements.

68. Questions to Consider
If 30% or more of future residents require a short stay transitional care (defined as 45 days or less), how will that change care centers? If many of these residents require SNF care following a short stay is there a way to design their space so they do not have to move to another area of the facility?
What are the principles that should guide the provision of services and the design of future care centers?
How can technology be used in the future care center to support customer preferences, increase client/resident independence and to reduce staffing requirements?
Is the neighborhood concept as it has evolved a good model for the future? What have been some of the advantages and disadvantages of the current neighborhood models that will impact future care delivery? What are the lessons learned?
What are the biggest challenges that face skilled care facilities? How can skilled care facilities be operated and designed to become the facility of choice for those who require that level of care (as opposed to the last option/least preferred option)?
Aging in place appears to be a high priority for many older adults. Is there a way to design a “universal” space that could transition residents through all the phases of aging? (CCRCs allow aging in place within the campus, but could we do all the aging in one apartment/place?)
Other questions?