Ignite Medical Resorts CEO: The Time Is Now For Value-Based Care, Industry Must Start Taking Risk

July 9, 2021, Alex Zorn, Skilled Nursing News - Ignite Medical Resorts, a short-term rehabilitation and nursing care provider that reimagines the traditional post-acute experience with “luxury resorts,” opened three new buildings during COVID-19 and has no plans of slowing down.

The Illinois-based provider will look to build more respiratory programs and invest in in-house dialysis units coming out of COVID as it remains focused on high-acuity short-stay patients, CEO Tim Fields recently told Skilled Nursing News.

Ignite operates a portfolio of 10 short-term rehab facilities in Wisconsin, Illinois, Missouri, Kansas and Oklahoma.  The company opened its second facility just a few years ago as its growth is thanks in part to its ability to become the best partner for the hospitals in its health systems. 

While the pandemic forced the industry to push the pause button on the evolution of value-based care, Fields expects further growth of ACOs, bundled payments and Medicare Advantage (MA) will push higher-acuity patients to SNFs like Ignite.

SNN got the opportunity to chat with him about Ignite’s business strategy moving forward and more in a conversation that’s been edited for length and clarity.

How have you managed through the pandemic up until now?

We are very unique in the space in that the majority of our census is short-stay. 

When COVID hit and there was a shut down of elective surgeries, hospitals started to dry up of traditional rehab patients like orthopedic, pulmonary and stroke patients, and instead had COVID in their emergency rooms.

We pivoted pretty quickly to putting up COVID units.  We pride ourselves on our great relationships and great partnerships with our hospital systems and we had them on the phone very early on asking what we can do to help.

They said they needed help with people who are stable enough to leave a hospital [when] they have COVID.

Early on we recognized that we had to build COVID units in partnerships with our hospitals and we did that in a way that was able to weather the storm during COVID.

What we ended up doing was building these units [and continued to be] rehab providers that take patients from the hospital.  We worked with their physicians and infectious disease doctors and medical directors and during the height of the second wave, we had three buildings that were only accepting COVID admissions because that’s how busy the hospitals were.

We decided we were going to make those buildings entirely COVID recovered.

For us, that really strengthened our partnerships with the hospitals.

It also allowed us to have revenue coming in where I think other people saw big dips.  Our occupancy actually went up during COVID because of how busy the hospital systems were.

I think at the end of Q1, beginning of Q2 this year we pivoted to what we called our new normal and we were able to really talk with our hospital markets about what’s next.

What is next?

Our model has always been high-acuity.

I think for the most part we’re talking with our hospital markets about how can we take their high-acuity patients, how can we lessen LTAC and acute rehab type patients that they’re getting because most of our hospitals are in some form of an ACO or bundled payment arrangement and they want providers that can help them lower the total cost of care.

If I can do the same type of care in a skilled nursing environment and get paid a third or fourth of the cost as an LTAC or acute rehab, I’m saving them money and am a better, faster alternative.

We went back to the hospital to talk about how we continue to increase acuity, which means building more respiratory programs for patients now post-COVID.

People have survived COVID but they have all these respiratory issues like fibrosis, they’re on higher levels of oxygen and they have less lung capacity.  [If] they get sick with a cold or allergies, it can really flare up their respiratory symptoms and make them have difficulty remaining at home.

Dialysis has become a huge thing so we’ve put a bunch of dialysis units in and we’re actually just about to open one and break ground on construction of another so we see that as a huge piece of getting these high-acuity patients who need dialysis.

We want to be a better alternative for them so that we don’t have them go and transfer out to outpatient settings.  Instead of doing dialysis on the same day that they’re getting rehab in the same facility.  We see that as a patient satisfier.  That’s what I’d want, I wouldn’t want to be transferred out on a medical stretcher every three days.

There’s more control.  Our nurses know their baselines and they’re not going to the hospital for having a small blood pressure issue and they’re going to maximize therapy time which is why they’re with us.  They want to maximize therapy times so they can get back home.

Those are some of the things we’re really focusing on now is that next step with our hospitals to continue to push the boundaries of medical acuity because the easy-breezy stuff is going to go home with home health care, but that’s not something we’re focusing on.  We’re really focusing on how to continue to push the acuity boundaries and lessen LTAC and acute rehab.

What was it like opening three new buildings during COVID?

We opened our Milwaukee facility, which is Ignite Medical Resort Oak Creek in April of 2020.  We opened Ignite Blue Springs, which is in a Kansas City suburb in September.  And we opened Ignite McHenry, which is outside Chicago in December.

All three were development projects that were scheduled to open around those times, but obviously, it was all done, we broke ground, and had everything in motion before COVID was even a thing.

It was challenging because you couldn’t do big grand openings and show them off to the community.  We couldn’t have a lot of our vendors come in who are normally on-site helping us with pharmacy labs and all this other stuff.  We had to get very creative with how we opened the buildings.

What went well?

I think we picked very good markets.  We did our due diligence to make sure we had the right partnerships.  We’re near three major hospitals.  Our Milwaukee building is right by Aurora St. Luke’s, which is Milwaukee’s largest hospital, our Blue Springs building is by Centerpoint Medical Center, which is I think the second-largest hospital in Kansas City, and our McHenry facility is basically across the street from Northwestern McHenry.

All three of them had good relationships, good partnerships and we were able to utilize those and got creative with interviewing and virtual tours.

How were you able to build good relationships and partnerships with the hospitals?

For us it starts with the day we decide to take either over an acquisition or build a new building.

It’s our conversation with the hospitals about who’s the best people to work with because it’s kind of a top-down and bottom-up approach.

And then in the same regard, what do we know about their goals and how do we make sure that their goals are being met and how do we make sure that we are aligning ourselves with their goals.

Some people are focused on rehospitalizations, some are really focused on length of stay, some have advanced programs like BPCI and ACOs and it’s a matter of how we can make sure that our operation is tailored to be a downstream partner to them.

We want to be seen as a partner and that comes with a lot of communication.

Do you think your track record through COVID helped?

Yes. I think our track record for quality and I think our relationships, I think both [helped].

Is there any change for Ignite’s strategy coming out of COVID?

I think that a lot of people right now are getting back on the value-based care bus so to speak.  It’s hard to manage ACOs and bundled payments at peak COVID time.

A lot are starting to reboot their program or preferred network and we’re seeing that continuing to be a focus, which means we need to make sure our operations are matching that.

A business strategy for us right now is our focus on Medicare Advantage (MA) and our managed care company.  We’re seeing double-digit growth in MA plans for all of our states.

It’s becoming more and more a piece of our business and we have to get close with those decision-makers at those plans to start looking at creative contracting and taking risks.

What we do is short-term rehab and taking high-acuity patients and helping them back home as quickly as possible.  We have a unique environment where we can start to take risk because we have control over it.

We don’t contract out any of our services and so we have in-house therapy where if we have to give patients more therapy to get them out quicker, and we’re in a risk-based arrangement to be able to do that, then we’re starting to talk to our hospital systems and our managed care companies about how do we start taking risk and be at the table with them with skin in the game.

Are you seeing any partners willing to share risk with you today?

There’ve been some good conversations, nothing that I think we’re ready to announce.  The other part is that we operate in the Midwest primarily and I think that you see most of the arrangements right now that are taking risk are on the coast.

We have a lot of stuff in California, Arizona, a lot of stuff in New York, New Jersey, Florida, but you don’t see a lot of stuff in the Midwest yet.

I think we’re definitely jumping on that trying to be bleeding edge.  We’ve got some good relationships with our payers and I think we’re continuing to have conversations [in regards to] how we can do that.

When do you think going at risk will be more common for SNF operators?

Right now. If you’re on the coast, if you’re in California, Arizona, or you’re in New York, New Jersey or Florida I think you’ve already got opportunities to start to do that.

I mean there are some people already talking about it out there, but they’re not in the Midwest. A lot of the managed care companies are all driven state-by-state right now.

If short-term rehab is going to be a business that you want to be in, whether it’s because of your relationship with the hospital systems or because of the market you’re in and the type of patients you serve, I think you have to start looking at risk.

When you look at what the healthcare landscape is going to look like in the next couple of years, us taking risk as an industry is going to have to be one of those big things.

You’ve been pretty bullish on new payment models like MA in the past and said the industry needs to take on more risk with these types of agreements.  Do you think we’ve made some good progress there?

I don’t think yet because I think it moves slow and steady and we’re only at the mercy of the managed care companies.

If I had it my way, we’d be moving much faster and much quicker.

I think that we’re at the mercy of them and I think that we’re open to the conversations, we’re open to putting agreements and contracts together and we’re in the process of multiple conversations regarding that.

We’re not at a point right now where I could say here’s a model we have and here’s how it works.

What about the need to diversify into new service lines, could you see Ignite making a play in the home?

Possibly, I think one of the things that we’ve prided ourselves on has been trying to do one thing and do it well.  Instead of being a large organization that has long-term care, memory care and short-term stay and all this other stuff, we’ve tried to focus our efforts on one thing and do it really, really well.