Foresight and flexibility the keys to COVID-19 survival, top exec says

DATE: May 4, 2020

McKnight’s Long-Term Care News | May 4, 2020

By James M. Berklan

As long-term care providers continue to struggle with the deadly implications of COVID-19, hesitation could be their biggest threat, says one of the profession’s top leaders.

With clinical, regulatory and financial conditions shifting almost day-to-day, providers must be confident enough to devise a well-educated plan and run with it. They should expect to tweak it as needed, said Phil Fogg Jr., president and CEO of Marquis Companies and Consonus Healthcare.

“We have to stay focused, always keeping our eyes forward,” said Fogg during a recent McKnight’s Online Forum session titled “Navigating COVID-19 Best Practices, Healthcare Heroes and Future Landscape.” “We’ve responded to the crisis and gotten through that. That was the first six weeks of this thing. Now, we have to be constantly thinking two to four weeks ahead. You don’t want to get four weeks ahead and wish you had done something two to four weeks ago.”

Marquis, which is based in the Northwest, had COVID-19 appear in a few of its facilities but it was tightly managed.

“What’s important to understand is you cannot expect to have everything certain when you’re making decisions,” Fogg said. “You’re going to have to make choices with your best guesses and as information becomes factual or certain, then you can change your assumptions. But don’t be paralyzed or do nothing, whether it’s managing your expenses or making an investment in something.”

A company’s top executives must respond swiftly and strongly, he added.

“Leadership really matters. All of us have seen people who have responded to the crisis and shown amazing leadership and then others who haven’t,” he explained. “I want to recognize [Centers for Medicare & Medicaid Services Administrator] Seema Verma. She has been an amazing leader in this process. She’s been a rock star in terms of trying to eliminate unnecessary regulation, help get supplies and try to get federal dollars to providers.”

Some county and state leaders, on the other hand, have not been as effective, he added. “In any environment where you find leaders not as strong, you have staff anxiety and a lot of issues.”

In general, Fogg said that the public health crisis has led to better relationships with government agency leaders.

Evolve, or else

Fogg also is the vice chairman of the board for the American Health Care Association. He said history has shown that the current wave of pandemic carnage may ease but another round can be expected. That’s why it’s important for providers to learn and change.

For example, facilities that still have three-bed rooms should count on family concerns leading them to force conversions to single or double rooms.

“Facilities are going to have to give the public confidence by doing ongoing surface testing” that may then be certified by a third party, he added. “Other environments do that today and I think we’ll have to do that. There will be other things like that that we will need to do to regain the trust of the public.”

He noted that housing models also have to continue adapting. COVID-only facilities have fared relatively well, as have those with wings to isolate COVID patients and their caregivers, but closed facilities that have been reopened haven’t been as successful, he said.

Marquis has focused on a handful of key factors for staying financially viable. They are: managing labor hours, managing census levels, making sure no COVID-19 infections are found in the buildings, and reducing or eliminating agency staffing hours.

Fogg’s team projected a handful of operational scenarios, from best case to worst case, for financial recovery. The lower that census bottoms out, the longer and harder the recovery will be, as late as October given current information, Fogg said.

Dollar signs

Providers have several things working in their favor, he noted. Federal stimulus funding has been the key to survival, literally, he said. A handful of states have increased Medicaid reimbursements through June 30. A 2% sequestration giveback is being suspended until the end of the year and Medicare pay rates will rise a little over 2% come Oct. 1 thanks to a decent market basket increase.

In addition, there should be no negative repercussions from Patient Driven Payment Model rates that went into effect last October, Fogg said.

“There will not be a budget-neutrality mechanism with PDPM. That was a risk, but while I would have said there was a 95% chance that we would have seen an adjustment before March 1, no it’s going to 95%-plus that we will not,” he explained. “Those are all good things and I think the feds have really tried to step up to help us.”

Providers still may want to use the liquidity of any extra cash in their balance sheet, while a lot of providers will be drawing on credit that’s secured by the promise of government receivables, Fogg said. He did now, however, endorse leaning to heavily on ancillary services to shore up finances.

“Ancillary providers are hurting just as badly, probably much more, than actual facility providers because medical supply companies, pharmacies, the rehabs, oxygen, labs — all of those folks are not getting stimulus money. We’re getting the stimulus money. We need to be aware that these folks continue to provide goods and services and their impact has been just as dramatic,” he explained.

Among the other key lessons learned under COVID-19, Fogg said that all employees are “essential,” including at corporate offices. “It’s an all-hands-on-deck process. We also learned that having an adequate PPE supply was probably going to be how our staff defined how we responded to the crisis, and probably be an indicator of how much we cared about them. We just had to get the stuff in because we know we would be judged at a later date.”

The third vital discovery has been that employees with flexibility are critical since challenges have “changed by the day.”

“There’s not been a lot of positive, but being able to test the grit and resilience of your leadership team in probably the worst crisis they’ll ever face, and having come through it with amazing character, has been a positive for us,” Fogg said.