Visitors to the eighth floor of Illinois Masonic Medical Center's skilled-nursing facility in Chicago step off the elevator to the bustle of paperwork at the nurse's station. Residents grasp protruding handrails as they walk under bright fluorescent lights down cream-colored linoleum to their rooms, painted in the same neutral colors.
But four floors below, the elevator opens onto a very different scene.
A mirror and a table with a vase of flowers have replaced the central nurse's station, now at the back of the floor and visible only through white- framed windows. The lighting is softer, the handrails blend into patterned wallpaper, and the floor looks like stained hardwood.
The price tag for the new decor: $1 million.
The medical center has similarly redone two other floors of the 294-bed facility, called Warren Barr Pavilion, and plans to give all nine a new look over the next eight years at a total cost of more than $7 million.
Administrator Karen Kraker says the investment will help Warren Barr meet consumer demands and face increasing competition from new entrants in the senior-care market, such as assisted-living companies.
"The expectations of the public are higher," she says. "They know the right questions to ask, and they have many choices."
The gray wave. Hospitals across the country, like 645-bed Illinois Masonic, have been busy bolstering their senior services.
The following is a look at the efforts of larger acute-care hospitals and health systems in three cities representing different regions and population centers.
Major hospitals in cities as diverse as Chicago, Phoenix and Richmond, Va., want a share of the growing senior-services market, which has estimated annual revenues of more than $124 billion when the assisted-living, skilled-nursing and home-care industries are combined. As the baby boomers age, more than 20% of the population is expected to be over age 65 by 2030, compared with 12% today.
The hospitals MODERN HEALTHCARE profiled all say they feel pressure to lure new patients into their systems, to meet the cost-control expectations of managed-care plans by offering more preventive services and to prepare for the graying of America.
But hospitals in Phoenix, which has high numbers of seniors and Medicare managed-care enrollees, have moved faster than others to innovate.
Those in Richmond, which has a large senior population but less of a Medicare managed-care presence, are not far behind.
Although Chicago's numbers are low for both seniors and Medicare managed-care enrollees, the area's hospitals have found they cannot ignore the looming changes in their own evolving market.
Beyond traditional care. "We are starting to see more of a focus on coordinating care based on population rather than on individual illness planning," says Leland Peterson, president and chief executive officer of Sun City,
Ariz.-based Sun Health Corp. "The baby boomers have created a strong demand factor in many areas, and healthcare will not be an exception."
The increasingly discriminating tastes of seniors have pushed hospitals beyond the more traditional and common offerings of skilled nursing, subacute care and Medicare-certified home care. They now place a higher priority on partnering with assisted-living and other senior housing developers, opening senior health centers, offering Alzheimer's and adult day-care programs, and centralizing the management of their senior-care services.
For example, Santa Barbara, Calif.-based Tenet Healthcare Corp., a national for-profit hospital chain, has opened 12 outpatient senior centers and plans to open 10 more by spring 1998. The centers provide primary care in addition to wellness and health education programs.
"Seniors are the fastest-growing segment of the population and the ones who most often need medical care, so it makes sense for healthcare providers to offer programs and services to meet their needs," says Michael Focht Sr., president and chief operating officer of Tenet. "Senior healthcare is certainly part of the continuum of care at Tenet and represents a growing area for us."
According to the American Hospital Association, the number of acute-care hospitals operating adult day-care centers shot up 113% to 683 in 1995 from 321 in 1990. Based on the latest figures available, the AHA says the number of assisted-living facilities operated by hospitals rose 5% to 363 in 1995 from 346 in 1994. The number of hospital-based geriatric assessment programs rose 4% to 953 in 1993 from 918 in 1990.
"We're positioning ourselves now to help the baby boomers struggle with taking care of their parents, and then we want to be ready to respond to them when they turn 65," says Kathryn A. Beall, vice president of continuing care for Bon Secours Richmond (Va.) Health System.
Phoenix magnet. Perhaps not surprisingly, hospitals serving the retiree magnet of Phoenix have established a variety of sophisticated ventures to reach seniors.
In their surrounding service area of Maricopa County, whole towns are dedicated to retirement living and more than 13% of the population is older than 65. The Medicare managed-care penetration is about 53% in the county, and some 222,000 have enrolled in Medicare risk plans statewide.
The primary service area of Sun Health includes retirement communities in the Arizona cities of Sun City, Sun City West and Surprise that are restricted to residents age 55 and older and have a combined population of close to 100,000.
Sun Health operates 189-bed Del E. Webb Memorial Hospital in Sun City West and 307-bed Walter O. Boswell Memorial Hospital in Sun City.
Some 90% of all payments to the not-for-profit system are through Medicare, and Sun Health provides care to more than 15,000 enrollees in capitated Medicare managed-care plans.
"We see helping seniors make healthcare choices on an informed basis as one of our primary goals," Peterson says.
Most recently, Sun Health joined with Bradenton, Fla.-based Freedom Group, an assisted-living company, to develop a life-care community on the Del E. Webb campus. The community will include a 288-unit senior residential living complex, opening this month, and a 100-bed assisted-living and skilled-nursing facility, opening in July.
Sun Health will have a 49% stake in the development and provide residents with acute care and other health-related services, while Freedom will control the remaining 51% and provide management services.
Earlier in January, Sun Health completed an agreement with the developer of the area's newest retirement community, Sun City Grand in Surprise. Under the Grand Advantage program, Sun Health provides wellness and health assessment services to residents, who began moving in in mid-January. The number of residents is expected to reach 17,000.
Sun Health also opened a 12-bed residential hospice facility in May and a 36-unit Alzheimer's residence in March.
"These programs help set up a relationship with the communities we serve," Peterson says. "Hopefully, the residents will establish a comfortable relationship with the Sun Health network and continue to look to us as their healthcare resource."
Columbia's interest. The opportunity presented by seniors in Phoenix has caught the attention of Columbia/HCA Healthcare Corp.
Its 295-bed Columbia Medical Center-Phoenix plans to open in August a $250,000 senior health center and a $150,000 comprehensive outpatient rehabilitation facility.
"The two go hand-in-hand," says Tony Delgado, who oversees the development and operations of both facilities. "Older adults look for convenience. We wanted to create more of a one-stop-shopping facility where they can get their lab, physical therapy, wound care and psychological services."
Delgado joined the medical center in April, after serving as clinic development coordinator at Columbia's Nashville headquarters. He says Columbia has opened 61 senior health centers across the country in the past two years and has 80 more in development.
Delgado says Columbia views the senior programs as a new product line that will help the company increase its market share in areas with large senior populations. The company's goal, he says, is to open a senior health center wherever Columbia has a hospital and additional ones in markets with large senior populations.
"Besides leading to increased admissions, they increase the utilization of other outpatient services, including wound-care centers and labs, and generate more revenues for those areas," Delgado says.
To create the Phoenix senior center, Delgado explains, Columbia carved out part of an existing rheumatology physician practice to provide primary care to senior citizens. The physicians continue to own their practice and bill Medicare for the patients' visits, while the hospital operates the center as an outpatient facility.
Patients pay an additional $5 to $20 "facility charge" for the use of the center's special services, which include wellness and health education programs. The center offers the services of social workers who, like case managers in a managed-care plan, help patients determine and secure the services they need and deal with the psychological effects of their health problems.
Delgado says the senior center's cost per patient visit is very high-about $500-because of the level and number of services provided. As a result, he says, the center is not yet courting managed-care contracts, which typically pay only $50 to $60 per visit.
He predicts, however, that the center will be contracting directly with managed-care plans within three years, after its volume of patients increases and it has produced outcomes data.
The efforts of Phoenix-based Samaritan Health System, Arizona's largest healthcare system, have added even more competition for senior residents.
Samaritan operates 576-bed Good Samaritan Regional Medical Center and 213-bed Maryvale Samaritan Medical Center in Phoenix. Some 23% of the system's admissions are people 65 and older.
Sue Chasin, the system's director of public affairs, says Samaritan reaches seniors through a number of special programs, including a behavioral healthcare resource phone line, a physician referral line and a World Wide Web site with information on senior services.
Samaritan also provides home care for seniors and operates two skilled-nursing facilities, a geriatric evaluation center and a 40-bed Alzheimer's center providing inpatient, respite and adult day care.
"Our approach is to assess seniors' particular healthcare needs individually and then refer them to the appropriate services," Chasin says.
Richmond competition. As in Phoenix, seniors make up some 13% of the population of the Greater Richmond area, which includes Chesterfield, Hanover and Henrico counties and the city of Richmond. The Medicare managed-care penetration, however, is considerably lower, at about 2%. Medicare risk plans thus far have enrolled about 8,400 people statewide.
The demographics and an anticipated increase in the number of Medicare managed-care enrollees have prompted health systems serving the already tight and highly competitive market to re-evaluate their approaches to senior services.
In September 1996, Marriottsville, Md.-based Bon Secours Health System established a continuing-care division to oversee the senior services offered by its Richmond hospitals.
Beall and Robert Scott, M.D., head the new division as vice presidents who report to the CEO of Bon Secours Richmond Health System, which operates 88-bed Bon Secours-Richmond Community Hospital, 153-bed Bon Secours-Stuart Circle, 259-bed Richmond Memorial Hospital and 391-bed St. Mary's Hospital.
"Integrating the services sends a strong message to the medical and administrative staffs that this is important," Beall says. "We now have our financial incentives aligned to make sure patients are moving through the continuum in the most cost-effective way."
Home-care and subacute services for seniors fall under the umbrella of the new division, as do a retirement condominium village, a senior health center at St. Mary's, and a health information and wellness membership program.
The division also oversees the national system's first assisted-living facility, which is expected to open at the end of this month in Richmond. The new $6.4 million Bon Secours Retirement Community at Ironbridge is a joint venture between Bon Secours Richmond and Richmond-based Manorhouse Retirement Centers.
The two formed a limited liability company under which Bon Secours Richmond will control 75% of the venture and Manorhouse the remaining 25%. Home-care and physician services will be provided by the health system, and Manorhouse will manage the facility.
Beall says the national system plans to open additional assisted-living facilities in its other markets within the year.
"Bon Secours made a strategic decision to go into assisted living," Beall says. "It's a natural in the development of our continuum of care."
Columbia has similarly refocused its senior-care efforts in the Richmond area, where it runs 470-bed Columbia Chippenham Medical Center, 340-bed Columbia Henrico Doctors' Hospital, 282-bed Columbia Johnston-Willis Hospital and 227-bed Columbia Retreat Hospital, all in Richmond, and 150-bed Columbia John Randolph Medical Center in Hopewell.
In April, Courtney Detwiler, former director of rehabilitation services at Columbia Johnston-Willis, became senior-care product line manager for the Columbia Richmond division.
Toni Rice, the division's vice president for business development, explains that the position is part of Columbia's national effort over the past 12 months to organize its services along product lines, such as senior care and oncology.
"Senior service is very central to our long-range planning," Rice says. "The product line managers look at the entire local market and make sure we don't duplicate services and that we offer the appropriate ones."
The newly aligned team last month opened a senior health center, similar to the one planned for Phoenix. The center is on the north side of Richmond, an area where seniors tend to shop and settle. It will offer patients 50 and older primary-care, laboratory, radiology and referral services. Their health assessments will include advice from geriatricians, rehabilitation therapists, nutritionists and geriatric psychiatrists.
Detwiler says the team is evaluating other senior projects for Richmond, including adult day-care centers and assisted-living facilities.
The same population needs spurred Virginia Commonwealth University's 698-bed Medical College of Virginia Hospitals in Richmond to develop a new plan to reach seniors last year.
In July 1996, the medical college contracted with five nursing homes to provide the services of two physicians and a nurse practitioner. They rotate each week among the facilities, providing routine checkups and managing acute-care needs.
Then in November 1996, the medical college opened a 15-bed chronic-care unit and began using case managers and social workers who specialize in long-term care to screen seniors admitted to the hospital.
Chicago momentum. The momentum driving senior-care changes in Phoenix and Richmond is beginning to hit hospitals in Chicago, where seniors make up 11% of the population. The Medicare managed-care penetration in the surrounding Cook County area is 13.7%, with about 111,000 enrollees in Medicare risk plans statewide.
Some providers are holding back on projects because Illinois regulators, unlike those in Arizona and Virginia, have not clearly defined newer care options, such as assisted living, and the services that must be provided in each category.
Besides renovating Warren Barr, Illinois Masonic added a dementia unit in April and a subacute unit in October 1996. Kraker says the units are designed to meet the needs of today's residents, who are more likely to have taken advantage of assisted living, home care or other options before coming to the skilled-nursing facility. As a result, she says, they tend to be much older and sicker than residents in the past.
Other area hospitals similarly offer enhanced services.
The Alzheimer's Family Care Center operated by 816-bed Rush-Presbyterian-St. Luke's Medical Center, 323-bed Veterans Affairs West Side Medical Center and the Chicago Chapter of the Alzheimer's Association made a $1.2 million move to a new location in February 1995.
In 1987, the center began offering an adult day-care program for seniors with dementia in a single large room with three clients. It moved the first time in 1988 to accommodate steady growth in the demand for the program. In its new location, the program serves about 60 clients per day at a cost of $43 per client.
Jane Stansell, director of the center, says the Chicago market is "way behind the curve" when it comes to adult day care. She says only 14 centers now serve the area and predicted that number will double or triple within the next five years as proprietary chains move in and the percentage of Medicare managed care grows.
"Day care is on the brink of an enormous sea change," Stansell says. "Adult day care 20 years ago was a place for Mom to play bingo. Now it's seen more as preventive care to help keep people functioning and out of the emergency room."
The 730-bed Northwestern Memorial Hospital received in July 1996 some $4 million in funding over five years from the National Institute on Aging to establish its own Alzheimer's Disease Care Center.
"We're beginning to get into other avenues for seniors," says Adrienne Casanova, president of Northwestern Memorial Home Health Care/Services.
The home-care agency, for example, has signed a letter of intent with Chicago-based Renaissance Realty to provide home-care services in a new 100-unit assisted-living facility targeting the Medicaid population.
"It would be an opportunity for physicians to extend into this area," Casanova says. "It represents a market share that Northwestern may not have already."